Howmet Aerospace Inc.

Good day, and welcome to the Helmet Aerospace third quarter of 2024 earnings conference call. All participants will be in a listen-only mode for the duration of the call. And should you need any assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star, then one on your telephone keypad. And to withdraw a question, please press star, then two. On today's call, we ask that you please limit yourself to only one question. Also, please be aware that today's call is being recorded. I would now like to turn the call over to Paul Luther, Vice President of Investor Relations and FP&A.

Please go ahead. Thank you, Joe. Good morning and welcome to the HMET Aerospace Third Quarter 2024 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, operating income, and EPS mean adjusted EBITDA excluding special items, adjusted operating income 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. And with that, I'd like to turn the call over to John.

Thank you, PT, and welcome everyone to the Hamet third quarter earnings call. Q3 was another strong quarter for the company. Year-over-year revenue growth was 11%, building on the 14% growth in the first half. Within this number, commercial aerospace growth was 17%, continuing a strong trend, including engine spares growth. Other markets will be covered later in the call. EBITDA was a record $487 million, along with a margin of 26.5%, while operating income was $419 million, with a margin of 22.8%. Operating income was up 33% year-over-year and increased 390 basis points, with engines and fasteners performing at high levels, supported by an increasingly strong result in structures. Wheels revenue was down driven by market declines, especially in Europe, which reduced double digits with extended summer vacations. However, wheels continued to deliver a healthy EBITDA margin of 26%. Earnings per share was 71 cents, an increase of 54% year over year. Free cash flow was also strong at $162 million, improving year-to-date free cash flow to approximately $600 million. The quarter end cash balance of $475 million is after deploying $282 million to debt pay down, $100 million to share buybacks, and $34 million to dividends. Overall, Hammett had a healthy set of results with EBITDA, EBITDA margin, earnings per share, and free cash flow above expectations. Let me comment on revenue, which was fractionally light of our guide. In September, we restricted our aerospace parts supply to Boeing, pending further understanding about the duration of the strike. Naturally, we are pleased that the Boeing strike is now over and the business can gradually return to normal. The other notable shortfall was in our wheels business. Wheels revenue was approximately $30 million below Q2. principally due to notably weaker European market conditions, resulting in an 18% decrease in revenue. North America revenues were down 10%. I'll now pass the call to Ken to provide additional details by end market and business segments before I return to cover the outlook for the company.