Howmet Aerospace Inc.

Good day and welcome to the Howmet Aerospace first quarter 2023 earnings conference call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing star then zero on your telephone keypads. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then 1 on your telephone keypad. To withdraw your question, please press star then 2. Please note this event is being recorded. I would now like to turn the conference over to Paul Luther, Vice President, Investor Relations. Please go ahead.

Thank you, Andrew. Good morning and welcome to the HowMed Aerospace First Quarter 2023 Results Conference Call. I'm joined by John Plant, Executive Chairman and Chief Executive Officer, and Ken Giacobi, Executive Vice President and Chief Financial Officer. After comments by John and Ken, we will have a question and answer session. I would like to remind you that today's discussion will contain forward-looking statements relating to future events and expectations. You can find factors that could cause the company's actual results to differ materially from these projections listed in today's presentation and earnings press release and in our most recent SEC filings. In today's presentation, references to EBITDA and EPS mean adjusted EBITDA excluding special items and adjusted EPS excluding special items. These measures are among the non-GAAP financial measures that we've included in our discussion. Reconciliations to the most directly comparable GAAP financial measures can be found in today's press release and in the appendix in today's presentation. With that, I'd like to turn the call over to John.

Thanks, BT, and good morning, everyone. Hamet's Q1 results speak loudly for themselves. Revenue was $1.6 billion, an increase of 21% year-over-year, and an increase of 6% sequentially. Commercial aerospace increased 29% year-over-year and 4% sequentially. Revenue was above guidance by a significant amount, which was in itself an increase quarter over quarter. And naturally, the increased revenues require some working capital. EBITDA was $360 million, an increase of 20% year over year, and an increase of 7% sequentially. EBITDA margin was healthy at 22.5%, again, an increase sequentially. Earnings per share were up 35% year over year. Free cash flow was negative $41 million, driven by the higher revenues, and will now be followed by three successive quarters of substantial cash inflow. During the quarter, debt was reduced by $176 million from the 2024 bonds with cash on hand, and this will further reduce future interest payments by $9 million annually, and hence increasing free cash flow yield. In addition, $25 million of common stock was repurchased, During the balance of 2023, shareholders can expect further steps regarding the application of cash flows and thereby creating shareholder value. All of the above, growth, margin rate, free cash flow, and the application to create value, all speak to the business and financial model of the company. I will comment further on the outlook after Ken has outlined the growth by markets and performance by each business segment.