Hello everyone and welcome to ATI's Third Quarter 2024 Earnings Call. My name's Lydia and I'll be your operator today. After the prepared remarks, there'll be an opportunity for you to ask questions. If you'd like to ask a question today, you can do so by pressing Star followed by one on your telephone keypad. I'll now hand you over to Dave Weston, Vice President Investor Relations, to begin. Please go ahead. Thank you. Good morning and welcome to ATI's third quarter 2024 earnings call. Today's discussion is being webcast online at atimaterials.com. Participating in today's call to share key points from our third quarter results are Kim Fields, President and CEO, and Don Newman, Executive Vice President and CFO. Before starting our prepared remarks, I would like to draw your attention to the supplemental presentation that accompanies this call. Those slides provide additional color and details on our results and outlook and can also be found on our website at atimaterials.com. After our prepared remarks, we'll open the line for questions. As a reminder, all forward-looking statements are subject to various assumptions and caveats. These are noted in the earnings release and in the accompanying presentation. Now, I'll turn the call over to Kim. Thanks, Dave. Good morning, everyone. Let me start by saying our team is motivated by our mission to support our customers, consistently providing the highest quality product even as we navigate market and supply chain turbulence. As you saw in our earnings release, the third quarter represents mixed results for ATI. While there are positive highlights and accomplishments achieved, the team and I are disappointed by the shortfalls to our financial guidance. Our performance was not what we strive for. We can and we will do better. On today's call, I'll walk through the challenges we encountered this quarter and how we are responding to them. For the third quarter, our adjusted EBITDA was approximately $186 million, up from our Q2 EBITDA of approximately $183 million. However, it was below our guided range of $189 million to $199 million. Adjusted earnings per share was $0.60, below our guided range of $0.63-$0.69 per share. We've adjusted our expectations for the coming quarter and the full year 2024 to account for ongoing headwinds related to supply chain uncertainties and one remaining operational challenge. We anticipate sequential growth for the fourth quarter, and we are continuing to pursue opportunities to exceed the guidance ranges that Don will walk you through today. We will be transparent in what these changes in business conditions could look like through the end of the year and what has been incorporated into our guidance. While our total growth fell short of expectations, the quarter did include several bright spots showing momentum in key focus areas. Segment-adjusted EBITDA margins met or exceeded our expectations. In HPMC, we saw over 200 basis points of sequential improvement in segment EBITDA margin, moving closer to the mid-20s range that we see as achievable in the near term for this core A&D segment. In AA&S, our segment EBITDA margin was approximately 15%, consistent with our expectations as our mix of A&D work continues to build in this segment. Our consolidated EBITDA margins increased by 100 basis points as we continue to improve price and mix and take operating costs out of our business. Our A&D mix remains greater than 60%, and our backlog remains stable as we continue to book new business across both segments. These achievements underscore that the underlying fundamentals of our strategy are working to expand margin and drive value creation for the future. So why did this quarter's results fall short of our guidance? Let's set the foundation. Our ranges for guidance are intended to cover our high and low-end expectations based on customer demand and operational performance. They contemplate variables like supply chain performance and operating efficiency, as well as non-operating items. This quarter, the impact of market volatility and operational performance issues exceeded what we had anticipated. Most notably, much of this volatility materialized late in the quarter, limiting our options to offset the risks that were realized. These risks were evenly split between customer demand changes and operational challenges. Let's touch on customer demand first. We've all witnessed the demand bumpiness of the commercial aerospace ramp. While backlogs and demand for commercial aircraft remain quite high, both aircraft OEMs are ramping more slowly than the industry expected. These delays worsened when Boeing's work stoppage began on September 13th. While some customers in Boeing maintained their orders and shipments, others in the supply chain reacted quickly, managing orders around their production schedules and year-end inventory targets. Even ahead of the work stoppage, they began pushing out planned deliveries into 2025, canceling orders or not placing transactional orders. Looking closely at our results, we believe these rapidly emerging adjustments in demand for commercial airframe materials served as one of the key drivers for our quarter shortfall. This impact extended to the transactional business as well, which historically has been a significant contributor on top of our LTA contracts, enhancing growth over the last three years. Comparatively, our jet engine customers have worked to maintain supply chain momentum and limit disruption. While new engine deliveries are delayed from build rate reductions, continued MRO activity drove ongoing demand for our products. However, MRO demand can be less predictable. Demand variations for specific parts on specific platforms cause operational disruptions as customers reordered priorities and pushed out excess parts not immediately needed to complete an engine overhaul. While less pronounced than with airframe, engine shipments were impacted over the last three weeks of September, reflecting accelerating supply chain dynamics. This rapidly pivoting customer demand led to increased changeovers and smaller lot sizes in our operations and ultimately decreased what was actually available for us to ship. Beyond underlying demand, customer program changes can create bottlenecks in our operations. That's what we experienced as we significantly increased production levels for our key engine program. These requirement changes caused bottlenecks in our testing and inspection areas and impacted our shipment rates. We are working with the customer to implement improvements for testing outcomes and to decrease testing time. These efforts, along with our investments to triple testing capacity, will support the rapid increase in part production and reduce bottlenecks. We expect output to increase as our testing capacity expands. What is clear? Underlying demand for new planes remains strong. These fundamentals support long-term growth for the commercial aero market and for ATI. The current turbulence will likely continue until the Boeing work stoppage is resolved and the supply chain realigns to consistent demand signals. Over the next two quarters, we anticipate modest growth as the supply chain readies for the next build rate increase, which we believe will come in the back half of 2025. The other half of our miss is related to operational challenges during the quarter. Since the pandemic, our sales have grown approximately 45%. To achieve this significant growth, we've pushed production to record highs. These record production levels leave little room for missteps. With that said, operations are most efficient with level, stable product flow. Disruptions create bottlenecks and inefficiencies. When unexpected outages occur, surging capacity and emerging bottlenecks can be difficult to overcome, especially when they occur in the last few weeks of the quarter as they did in Q3. One example that highlights this: as we pushed performance levels, a long-standing design flaw was discovered in our HPMC nickel melt shop. Last quarter, that part flaw allowed molten metal to escape and damage the equipment, causing an operational outage. Our team took action immediately to restore operations, and once they identified the issue, they re-engineered the part, effectively eliminating this risk going forward. Today, the operation is achieving the melt targets needed to deliver our Q4 anticipated growth. But as we were executing our recovery plan in Q3, transitory bottlenecks began to emerge due to the surging material. This, as well as transportation delays related to Hurricane Helene, restricted our ability to fully offset the impacts to the quarter. Each issue on its own was not significant, but aggregated, they were difficult to overcome. In the AA&S segment, we experienced an outage of our vacuum anneal furnace in Oregon due to a failure caused by a new water pump we recently installed. This asset serves as the final step in a proprietary operation that primarily serves the space industry. While restoration is underway, the team is working to rapidly qualify other assets in parallel to protect our customers and mitigate sales impacts. This will continue as a headwind into the fourth quarter. Let me emphasize: progress has been made. Our quarterly sales exceeded $1 billion for the ninth consecutive quarter, and our expanding margins demonstrate that our strategy is on the right path. This continuing improvement throughout 2024 showcases momentum in key areas: increasing melt capacity, reducing finishing bottlenecks, and improving mix and pricing. We continue to invest in reliability and de-bottlenecking of our production footprint. Our entire team is focused on the most vital priorities as we operate our business safely, efficiently, and reliably. The productivity and leveling work we're doing is building momentum. Already this quarter, we see encouraging progress. That gives me confidence that our performance will continue to improve and that our strategy is directly aligned with the growth we believe is ahead for ATI. What hasn't changed? The future for ATI is strong. The market fundamentals are clear. Aircraft production and maintenance will increase. The need to protect U.S. and allied troops continues. Critical customers in specialty energy, electronics, and medical depend on our materials for the differentiated performance they need. We didn't expect this ramp to be a straight line. We are confident the current market turbulence and our operational challenges will resolve. Aero and defense growth will re-energize in 2025. The end users of our products need us more than ever, and we are focused on delivering for them every single day. With that, I will turn it over to Don for his comments. Thanks, Kim. Sales volume is the foundation of our growth and performance. Many of the impacts incurred this quarter emerged as the quarter ended. As a result, sales, earnings, and cash flow were lower than we anticipated three months ago. As Kim highlighted, roughly half of this impact was driven by customer demand, timing, and requirement changes. The other half was due to operational challenges. Total sales were down 4% sequentially, up 2% from Q3 in 2023. We do not guide for sales, but it is reasonable to estimate that our view of the shortfall this quarter is approximately $90 million. This impact in sales timing brought our earnings below our guided ranges for adjusted EBITDA and adjusted earnings per share, even with inclusion of benefits such as reduced incentive compensation and a $3.7 million gain on the sale of oil and gas rights. I think it is fair to say that we performed well on the materials we did deliver this quarter. I anticipate that trend to continue as volume increases. We expect growth to return in the fourth quarter. Looking specifically at adjusted EBITDA, our midpoint of guidance was $194 million. We delivered approximately $186 million, $8 million below midpoint. Net consolidated adjusted EBITDA margins were 17.7% of sales, up 100 basis points from Q2. This allowed us to partially offset the impact of reduced sales. We believe the realized efficiencies of this performance are sustainable for the future. From a segment perspective, HPMC margins increased sequentially and year over year, closing at 22.3%. A&D content remains at 86%. We estimated that AA&S margins would approach 15% in the second half of 2024, and we posted 14.8% this quarter. The sequential 160 basis points decrease in EBITDA margin is consistent with our previously announced expectations. While sales in the segment declined sequentially this quarter by 7%, year-over-year sales were up 3%, even with the volume impacts we've explained. A&D content for AA&S was 36%. The consolidated margin expansion for ATI, up 100 basis points this quarter and up over 300 basis points from Q1, is underscored by an enduring mix of A&D and aero-like end markets. Q3 revenue in those markets totaled 79% of our overall revenues, with sales in those markets up 6% year-over-year. Let's turn to cash flow and managed working capital. Reduced sales and delayed inventory liquidations resulted in cash usage in the third quarter. Operating cash flow was $24 million, offset by $61 million in capital expenditures. This resulted in a $37 million use of cash when netted for free cash flow. Year to date, our free cash flow usage is $152 million. That is $50 million better than our year-to-date position at this time last year. However, our managed working capital increased to 40% of sales from 35.5% in Q2. Delays in sales as we continue to melt and produce to meet customer requirements, along with accelerations in timing of capital expenditures, contributed to the year-to-date use of cash. We continue to execute our balanced capital deployment strategy as we invest for growth, reduce debt, and return capital to our shareholders. This quarter, we proactively redeemed our convertible notes, almost a year ahead of their maturity date. We retired nearly $300 million in outstanding debt and reduced 2024 interest expense by approximately $2 million. In parallel, our board of directors, based on our strong balance sheet and anticipated future cash generation, authorized up to $700 million in future share repurchases. This quarter, we used the first $40 million of this authorization to begin reducing share count. We estimate that this authorization will be fully expended by early 2027, delivering significant value to our shareholders. Now, let's talk about our guidance to close out 2024. With growth expected in the fourth quarter and continued operational efficiencies, we expect earnings to build upon our Q3 results. Our estimate for adjusted EBITDA has ranged from $181 million-$191 million, which equates to an earnings per share range of $0.56-$0.62 for the quarter. We believe there are opportunities to exceed that range as we monitor how the industry responds to the Boeing work stoppage and we restore vacuum anneal capacity in AA&S. Overall performance of the business in the fourth quarter will also be a key driver. We are also tracking non-operational opportunities that could increase our Q4 EBITDA by as much as $10 million- $15 million, but have not included that potential in our guidance. The range for fourth quarter equates to a full-year adjusted EBITDA range of $700 million -$710 million and an earnings per share range of $2.24-$2.30. This represents a $30 million reduction to our previous midpoint of adjusted EBITDA, with $10 million of the shortfall in Q3 and $20 million of adjusted expectations for Q4. While we still expect cash generation to be strong in the fourth quarter, we have lowered the high end and low ends of our free cash flow range by $40 million. This accounts for near-term risks in sales timing and inventory flow. This $40 million reduction includes $30 million of earnings timing. It also considers a $10 million increase in our CapEx guidance due to accelerating targeted investments to improve reliability and asset performance. Free cash flow guidance now ranges from $220 million-$300 million. Q4 is expected to be a strong quarter for cash generation, consistent with our cash cycle. This reflects a meaningful reduction in managed working capital. We expect to end the year with managed working capital in a low 30% range. This is above our original year-end target of 30% or less. We continually look for opportunity to efficiently deploy capital. That includes divesting assets that create little or no operational value, such as oil and gas rights. In the fourth quarter, we anticipate monetizing as much as $40 million of non-core assets. We'll likely redeploy proceeds to support improved reliability, de-bottlenecking, and growth as an element of our existing capital investment plan. As we react to the timing of the impacts to 2024, we are left with at least one more important question. What does this reduced year-end exit rate mean to our 2025 and 2027 targets? Consistent with past practice, we will not provide formal guidance for 2025 until we report fourth quarter earnings. Let me offer some initial insights now. It is reasonable to assume that 2025 performance, particularly in the first half of the year, will reflect adjusting supply chains. Our views at this time suggest that we will be within the range of the original targets we issued last year, which was adjusted EBITDA between $800 million -$900 million. Supply chain headwinds are expected to largely offset the impact of new sales commitments announced earlier this year. Our performance within this range will be affected by how quickly the Boeing work stoppage is resolved and the aerospace market ramp recovers. As for 2027, we remain confident. Despite a reduced second half 2024 and pressure heading into 2025, we believe the revised near-term build rates and sustained demand for aircraft production support the range we suggested last year. ATI is still on track to be above $5 billion in sales, above $5.2 billion, to be more specific, and above $1 billion on adjusted EBITDA by 2027. For the near term, we are focused on supporting our customers, taking full advantage of operational opportunities to deliver our fourth quarter and full-year 2024 guidance. On that note, I will turn the call back over to Kim. Thanks, Don. This has been a unique quarter for ATI. Uncertainties with our most critical customers and unexpected obstacles within our own operation left us short of our goals and our commitments to you this quarter. We are taking action across the enterprise to deliver on those expectations now and every quarter going forward. What gives me confidence in our future success? Our end markets are strong, and our products lead the industry. Our strategy is on point, delivering growth and margin expansion. And most of all, our team is focused on delivering value for our customers and shareholders. With that, let's open the line for your questions. Thanks, Kim. Please press Star, followed by the number one if you'd like to ask the management team a question, and ensure your device is unmuted locally when it's your turn to speak. We kindly ask that you limit yourself to one question and one follow-up. And if your question's already been answered, you can withdraw your question by pressing Star, followed by the number two. Our first question today comes from Richard Safran with Seaport Research Partners. Your line is open. Please go ahead. Kim, Don, good morning. So I just wanted to follow up on the comments, Don, you just made about 2025. And I wanted to ask you a bit more about how you recover from these unplanned outages. For AA&S, is there risk the repair and restoration efforts impact your 2025 results? And for both of these issues, is the revenue recoverable? Do you expect a bump in 2025, assuming the strike ends in a reasonably short period of time and production resumes? Thanks, Rich, and good morning. First of all, for our thoughts around 2025, we would expect that, number one, when it comes to, for example, the vacuum anneal outage that we experience and will continue to experience in Q4, we would not expect that to create a headwind into 2025. When it comes to the titanium demand, I know it's not quite what you asked about, but just to touch on that, when we think about the work stoppage that is a key driver in that titanium demand disruption, the Boeing work stoppage, we have anticipated will be with us through the end of this year and will be resolved in either late this quarter or early 2025, and that the industry and the related demand will get back on track. In terms of the ability to recover what we saw as missed revenue in Q3 and anticipate in Q4, it would be nice to believe that, but we are not increasing our 2025 targets under that assumption. Okay. Thanks for that. And just quick here, I think we're going to agree that you're more dependent on the engine manufacturers and the airframers. I just want to know if you could maybe go into a bit about what GE, Rolls, and Pratt are saying that's a bit different from the airframers, Boeing and Airbus, trying to get what's embedded in your outlook now and the differences between what you're getting from the engine and airframe manufacturers. Sure, Rich. I'll give you some color here, and if Don wants to jump in with any numbers that help give you more clarity. From an engine standpoint, everyone is, I'm sorry, everyone is continuing to assume that Boeing is going to get this work stoppage settled sometime, hopefully, by the end of this quarter. So from an engine demand standpoint, they've also stated that they're making sure that they're protecting the supply chain. So we're seeing steady orders. We're not seeing big drop-offs, I'd say. There was some aligning that happened kind of mid-quarter, end of August timeframe with some of the build rates that weren't lining up exactly or with the call down that the other with Airbus did as well. So we saw some, I'd say, aligning to that earlier in the quarter, but it's been steady. They're continuing to buy. And let me be clear, our sales are going to continue to grow with jet engine going forward, assuming the labor dispute, as Don just said, gets resolved at the end of this quarter, early next quarter. There is strong MRO, and that's continuing across all of the OEMs. They're each addressing their individual design challenges, upgrades, and engines that are driving shop visits. But we're also seeing that we're continuing to gain positions with Pratt in support of the GTF. We did have a milestone in September where we hit 2x the shipments, double the shipments that we've done in the first half-year run rate in September. And then we're going to be working towards a meaningful increase towards the back end of this quarter, targeting something in the 15%-20% increase going into next year. All of that lines up to strong demand, growth that we're expecting, and their continued support and pull both for the MRO as well as maybe a little bit of shifting to support on the LEAP-1A engines, and continue to support that growth that's going to be continuing. Thank you. Sure. Our next question comes from Andre Madrid with BTIG. Your line is open. Good morning. Thanks for taking my question. I guess if we look into the near term, you mentioned pretty extensively the impact of MRO demand. Do you think, though, that broadly this is enough to offset the pressure on airframe? And could you maybe just talk broad strokes about the margin differential between those two end markets? As we look at it, what we've seen, most of the engine OEMs have shared in their public comments, they're running much higher MRO. So anywhere from 40% to one of the OEMs even shared 60% of their current demand is coming from the MRO standpoint. So that's continuing. I would say, as we look at their support and how they're thinking about the build rates, they're continuing to build to make sure that they can keep up once the work stoppage is over, Boeing's back on track. They want to make sure that they're not impeding that growth on either Boeing or Airbus side to the point where some of them have shared they're protecting the supply chain and continuing to buy at level stable demand levels. I would have to say, if we looked forward, there'd have to be, I think, a different assumption around the work stoppage that may have them revisit that. But today, they're pretty assuring us that they're going to continue along this path. As far as margins, that's a little bit harder to define. Airframe, yes, goes to the two big air OEMs, but it also goes through distribution. It goes through machine shops. There's multiple channels and multiple products that go into that. I'd say our position on engines is more accretive to our business than airframe, but they're both very positive from a margin standpoint. Don, do you want to share something? Yeah. If you don't mind, I think what I'll add is, if you think about the profile of our revenue, so it's about 60%-65% of our revenue is aerospace and defense. And as you unpack that, what you see is jet engine is about 2x what our airframe revenues are in a given period. So while, yes, we would expect jet engine would be a positive offset to headwinds in the airframe side, we don't see it as a one-for-one offset or a significant tailwind that would fully overcome an airframe, a sustained airframe slowdown like we would say has happened at the end of Q3 and will probably be with us through Q4. But the good news is we do have offsets that certainly dampen the effect of it. Another offset area that we have is defense. Defense has been and we expect will continue to be a good area of growth for us for a sustained period of time. Now, that represents about 10% of our revenues, and if you compare that to our airframe, it's more than half the airframe, so again, it's a separate set of drivers around that demand and those revenues. It's a very good bucket of business for us, but it will help to offset, not necessarily fully offset, the effect of airframe headwinds like we saw this quarter and anticipate seeing next quarter. Thank you. I appreciate the color there. And if I could throw in one more. I mean, you guys talked extensively about how titanium shipments being pushed out on the airframe side was more due to, obviously, demand signals shifting. But on the defense side, it seems like it was more operationally driven. I mean, just to clarify, sorry if I missed this, but could you explain if that's the case, if it was more operational challenges? No, Andre. On the defense side, what I would say is it's more timing of where the orders and frankly, there is a bottleneck in the supply chain at Aberdeen with their ballistic testing, which is impacting and slowing shipments on some of that armor plate that we provide. So we're working with the Army to get that resolved and look at their testing capability or capacities. But I'd say we're at the AUSA show, the Army show just at the beginning of the month here. And there's quite a bit of activity, both domestically and through foreign military sales around this rebuilding of the ground defenses over in Europe. And so there is a lot of upside opportunity. And as Don said, there is opportunities for us to offset any softness that we see from an airframe standpoint with our titanium. Excellent. Thank you so much. Sure. Our next question comes from David Strauss with Barclays. Please go ahead. Good morning. Thank you. Wanted to ask about the-- Good morning, David. Hey, good morning. Wanted to ask about maybe helping us walk to the Q4 EBITDA guidance. You're calling for relatively flat EBITDA sequentially in Q4. I would think the supply chain impacts would be worse. You're talking about it sounds like your assumption is the Boeing strike goes on through the end of the quarter. It sounds like, at least on the AA&S side, you're still going to have this operational issue there. So just, Don, if you could help us walk from Q3 to Q4 in terms of the EBITDA forecast. Sure. I'll try to basket this in a way that I'm not dragging you through minutia. But the way to think about it is, first of all, we ended the quarter with about $186 million of EBITDA in Q3. That included almost $4 million of gain related to an oil and gas sale that I don't expect is not expected in our Q4 guidance. Then when you take a step back and you think about the things that we've shared, some of those things are going to be with us in Q4, to your point, things like that vacuum anneal outage that is going through a repair process that'll probably last the bulk of Q4. And then we're not expecting a magical solution to the titanium demand reduction that we saw. So those will be with us. But there were some things that were in Q3 that shouldn't repeat. We had some headwinds around, for example, shipping during the hurricane. No surprise when you're in the middle of a hurricane, it's kind of tough to load trucks and get them moving. But good news is we did not forecast a hurricane in Q4. We think that's probably a pretty good assumption. So that should not repeat. Then we had just some other anomalies. We talked a bit about the VIM outage, right? Well, that VIM outage, it was impactful to last quarter. We don't expect it to be impactful for this quarter. So that impact is behind us. So you go through those pluses and minuses, the things that were hits in Q3, rather, that we don't expect to repeat in Q4. Think of them in terms of, they're probably a total of about $10 million net good. If you back into the revenues, it's about $30 million of revenue, the bad guys in Q3 that won't repeat in Q4. Then I would reduce that $10 million of EBITDA by the non-repeated good guys like the oil and gas gain sale, for example. What you really get to is, hey, there's about $5 million of bad guys in Q3 that shouldn't be there in Q4. What that indicates is, when you look at our current guide for Q4 EBITDA, it's $181-$191. Midpoint $186 looks like kind of a flattish Q3 to Q4. Don just explained it should be better in Q4 by a few million dollars. One thing that you already raised is that, hey, we're going to have a full quarter effect of the titanium and the back and yield. That will be something we're dealing with. And then I will be quite frank. When you look at our Q4 guidance, we do not plan on missing. And so as we looked at the risks that we see in Q4, we tried to be very, very thoughtful on how that affected our guidance. You can probably say fairly that we view the Q4 as conservative, but that would probably be with all the volatility and change that's going on in the market at the moment with the stoppages and all that good stuff, it felt like a prudent thing to do. So that's in the math as well. Does that help, David? Yep. That's helpful. And just as a follow-up, I know sometimes it's hard for you guys to know exactly what rates you're shipping at. But any help to kind of level set us, particularly on the titanium side, on the airframe side, where your ship rate may be to the major platforms, where you've been shipping and where you're shipping right now, what rates? David, as I think about titanium, the effects that we talked about coming from the supply chain reacting, some of it before even the strike began as they were hearing the rhetoric, that has mainly subsided. I think it's stabilized from a shipping rate. And to be honest, we've seen some spot transactional business, I think, as some have come back in and said, "Oh, we do need this product or some titanium," or, "We missed this demand signal that we've got to put back into the order book." But I do anticipate from the titanium side that we'll see level shipments that as we go into the fourth quarter, flat to maybe slightly up on the titanium side. Hopefully, does that answer your question? Yeah. I mean, I was just looking at it. I don't know if you can boil it down to kind of where you're shipping, for example, on the MAX or A320, what kind of rates you think you are today relative to maybe where you were a quarter or two ago or what you were expecting Q3, Q4 to look like and where it actually is. So if I think about those programs on the Airbus side, I do think those rates have continued. There are a few, I think, suppliers in their supply chain that they were adjusting their build rates to. We did talk with them. We aren't seeing any impacts in this year of that. I would call that almost smoothing for them. They are continuing to build titanium supply to be ready to move away from VSMPO as we go into next year. And so we've got pretty close alignment from that standpoint. On the LEAP side, as I mentioned, we have seen some shifting over to the 1A versus the 1B. Those parts are similar, but they're not exactly the same. So again, that whole idea of bottlenecks and material getting caught up as they shifted and said, "Okay, we want more of these 1A parts," which might have been sixth or seventh in line, and we kind of had to push one and two out. And so that created some bottlenecks and inefficiencies. But from an overall shipment standpoint, working with the engine OEMs, it's been fairly stable. And I anticipate that in our guidance going through Q4. Now, as I look to 2025, that's where we're spending some time with our assumption that the work stoppage at jen]. How long does it take Boeing to bring their folks back, get them requalified and certified, and then get back to the rates they were at in August? We would anticipate that probably takes a couple of months to get that worked on and get back up to that rate. But there could be some opportunities because I do think some of the supply chain with the distribution or the machine shops reacted very aggressively as their concern around cash flow and being stuck with inventory as the end of the year came up. So I do think that as they come back to work, we could see some emergent opportunities that come from that. Okay. Thanks very much for the color. Sure. Next, thank you. We have Phil Gibbs with KeyBanc Capital Markets. Please go ahead. Hey, good morning. Good morning. Good morning, Phil. Question in general about the backlog. I think you mentioned as an enterprise, it was fairly stable. But any texture you could provide between your segments in terms of direction of backlog after Q2 and then relative to Q2? And then also, Kim, in your prepared remarks, you had mentioned some push-outs, some cancellations. Where have you seen that, I guess, in the specific products? From a backlog standpoint, as you said, that's been fairly stable, around $4 billion. As I'm looking at it, about three-quarters of that is in the HPMC segment, and the other quarter is in the AA&S segment. That, again, as you said, is pretty stable. We're continuing to see strong, steady demand across those two. As far as I think you asked about push-outs, where did we see that and what products? Yeah. You had mentioned some push-outs, and then I think you had also mentioned some cancellations as well. And so I'm curious where those fell. So those were mainly related to the airframe. Titanium probably took the biggest hit as we look across the portfolio. As I said, the engine folks, one, they're still buying very steadily. They're planning on Boeing getting back to work and getting back to rate. And obviously, we've got Airbus that's continuing to produce and are building to their stated build rates as well. So we did see it with some titanium. A lot of it was canceling or swapping, saying, "Okay, we don't need titanium for that product. We'd like to pull this product in." And so there was a lot I'd say of noise like that that came in where they said, "Let's switch orders around and switch the timing of those orders." So those push-outs that went out, there were some from a cancellation standpoint, there were some mainly in the distribution space, a little bit in the machine shop, but mostly distribution. As they are looking at buying speculatively, either when they think demand's going to rise or they think demand's going to fall. And the whole supply chain, everyone's been buying to continue to make sure they stay ahead of the ramp. One particular customer I can share, give you a little bit more color around landing gear. I think we're running well ahead of what the build rates were, again, to make sure that they were not the slowest part of that supply chain. And with some of these slowdowns, said, "Okay, look, we're over-inventoried. We need to correct that inventory level, and we're pushing this into 2025. Thank you, Kim. And then, Don, just a question for clarification. I think you mentioned that there's going to be about $40 million of divestiture-related inflows in Q4. Is that within your free cash flow framework, or is that outside your free cash flow framework? Yeah, it is within. It's part of how we've historically defined that calculation. So we include the cash proceeds from discrete asset sales or from asset sales in general. The logic there is if you're including your CapEx as an element to your free cash flow, if you turn around and sell one of those assets, wouldn't you include that proceeds? So short answer is yes. Thank you. Our next question comes from Timna Tanners with Wolfe Research. Your line is open. Yeah. Hey, good morning, Don and Kim. Wanted to circle back first off just quickly on the $40 million, that divestiture. Assume those are lower-margin businesses. That doesn't change your outlook for your targets for 2025 and beyond. You are 100% correct. Those are non-core assets. Sometimes they're discrete assets, which there's little to no margin attached, like oil and gas rights. Sometimes they're non-core operations. They would be immaterial from a top-line standpoint. They would almost always be dilutive from a margin standpoint. So we unlock that, and it improves the metrics and gets us cash to redeploy. I think the one thing I'd add to that is, in this case, with these assets, that we will be able to continue to supply material to the buyer. So we will get the benefit of that material supply while aligning that business with another owner who this is their strategic focus. And we anticipate they're going to invest, and they're going to grow that business. So as Don said, it's not accretive, but I think it does provide us an opportunity to continue to support it with growth potential. Okay. Got it. Thanks. I wanted to follow up on things that you said in the past. On the Q3 call, you said some of the lost volumes to the A&D segment could be sold into other segments and talked about industrial. So maybe if you could give us an update on kind of how the industrial markets are working. And then similarly, in the past, you've talked about, and this maybe goes back too far, but Boeing, you had min-max contracts, so they would keep taking the minimum even when they didn't need it, like when they were on work stoppages in the past. And that ultimately led to prolonged periods of low margin and lighter volumes. So I'm just wondering, is there a risk that that repeats itself? So I guess that's two questions. Thanks. Yeah. I'll start with the industrial question. So we are not heavy in automotive or housing. So those aren't really markets that we have that are very impactful. We have a small part of our business. I think Don shared that in the past, 10%-15%, mainly in the AA&S segment. I'd say as I look across our other strategic segments, the aero-like, you'll see in our results that medical and electrical, specialty electrical took a step down. Those are really related to order timing, inventory, realignment, not really due to underlying core demand. We're still seeing very strong demand in specialty energy as well as medical, with elective surgeries are starting to catch up. I heard there's a shortage of saline. I think some of those things are creating a little choppiness in that medical market. But we are seeing, again, those aero-like markets are still very strong demand. And as you're saying, give us an opportunity to sell our products into those when we see any openings. On Boeing contract, so those contracts, like most of our other aerospace contracts, were renegotiated during the pandemic. And so we are currently at a share position now with them, with min-maxes. As I've shared before, all of our contracts have maxes, one, because they contemplate what is our total capacity to make sure we can continue to support these customers. But then it also, when demand starts to ramp quickly, it does give us an opportunity to participate on the transactional side as their demand starts to exceed what that contract is. So as we're thinking about this, we are working closely with Boeing. Unfortunately, they've had just a series of setbacks here coming out of the pandemic, and so they were starting to work towards that build rate, get to rate 38, to talk with the FAA to kind of move past that, but they had not been up to, I'd say, full power from a build rate standpoint since the MAX crashes, frankly, so a lot of our growth, if you look at our portfolio, we've shared this in the past. We have a very diverse customer base now, so we're supporting both of the airframes and all of the engine programs in a meaningful way, and so, unfortunately, Boeing continues to have some issues, but we anticipate they're going to get to build rate. But the rest of the industry is very robust at trying to meet the airlines' demands and their needs for new planes and before the new planes get there to keep those engines in the air. So that's how we're managing. That's how we're thinking about those markets and the dynamics that we see, at least through the end of this year and into the first quarter, first half of next year as Boeing gets back to that August rate. Don? Thank you. Yeah. One thing I would add, just to go back to, I think, part of the question you asked about industrial demand. We've talked about the anticipation that industrial demand would be coming back throughout this year. And it hasn't returned like we expected it would. And in this particular quarter, we did see industrial sales down sequentially. And I think that was one of the things you were looking for, Timna. And as you look at, to kind of echo some of the things that Kim had said, where we saw some headwinds from an industrial sales standpoint quarter over quarter, we're in areas like automotive, construction, and mining, as well as our food equipment materials that we provide. So we're not anticipating, when you think about our Q4 guidance, we're not anticipating that those industrial sales are going to come roaring back in Q4. We certainly would expect, as we look out to 2025, a more normalized sales level. But this year, that would be, I would say, a sales group that's generally disappointed us from a sales level. Thanks again. Thanks, Timna. The next question comes from Seth Seifman with J.P. Morgan. Your line's open. Hey, thanks very much, and good morning, everyone. Hey, Seth. Good morning. Wanted Wanted to ask. Hey, morning. Wanted to ask, on the airframe side and some of the challenges you're seeing there, generally think of that end market as being more tied to wide-body production. And on the Boeing side, that's more 787, which is not really subject to the work stoppage in quite the same way. But wondering if you're seeing unevenness there in terms of demand just because of some of the delays that they've had in being able to deliver aircraft due to FAA certification and other issues. And then on the 777X also, how you think about the push-outs there affecting the growth trajectory that you guys have expected over the next couple of years. Yeah. That's an interesting question. As we're looking at, like you said, there's a lot going on in the Boeing portfolio. On the 787, to your point, we do see growth opportunities. That is a bright spot as we're looking at 2025, talking with Boeing. They are moving forward. They're making planes. Those wide-body planes used, if we shared the statistic before, about five times the titanium as the single aisle. We are seeing increased demand coming from Boeing for that aircraft. They've already set up their forecast with us for next year. We anticipate seeing that growth. As they get those planes and that production ramped up, seeing that continue to grow through 2025. On the 777, yeah, that was disappointing, that push-out on the entry into service. That plane does have a very heavy titanium load. I believe that there's a design issue that they're working through that's not related to our material or us. But we anticipate that as they design and engineer that, hopefully, working on that, even with the furloughs and other challenges they've got going on, that we'll see some improvement in that timeline as we go into 2025. But we didn't have that, I would say, substantially built into any forecasts or estimates as we looked at 2025, as that was still really early in the production ramp. Okay. Great. And then just maybe as a follow-up, you mentioned the opportunity to drive margin being more significant in periods when production is stable. And so maybe now, with some of these challenges kind of persisting into the early part or the first half of next year, does that provide some opportunity to really drive efficiency through the operations and also to be prepared for the next ramp now that they're maybe not always running so hard to be in line with rising demand? So Seth, I'll take that one. The short answer is you're absolutely right. And it's great. It's very insightful that you picked up on that. But it doesn't mean that we're slowing down in terms of the delivery of margins toward our targets. So let me take that part of the answer first. So when you look at our margins, this quarter, we delivered 17.7% on a consolidated basis. If you strip out the oil and gas rights sales, I think you're in the low 17%. So it's still above that threshold. We would expect our EBITDA margins in Q4 to be in that 17% range, a little bit lighter than what we had anticipated when we last talked last quarter, but not much of a surprise being the reduction in production with the lower guide brings some inefficiencies around absorption and those kinds of things. But still, the business is going where we wanted to from a margin standpoint. But there's also significant opportunity. We have this line of sight to get to our 18%-20% range in 2025. Feel very, very good about that. But if there is any sort of pause in the ramp, of course, we'll take full advantage of that by accelerating our actions to improve efficiencies and yields and all those good things that are part of our plan and take full advantage of the resources that might or might not be available. Okay. Great. Thank you very much. The next question comes from Scott Deuschle with Deutsche Bank. Your line is open. Hey, good morning. Kim, on the engine side-- Morning, Scott. Demand changes primarily on forged? Yeah. Kim, on the demand side, were the demand changes on engines primarily on forged products, or were there any customer push-outs in products like nickel alloys as well? The demand changes hit both of the HPMC businesses, I would say, based on Airbus updating their build rates and then people realigning. And this was earlier in the quarter, realigning to where Boeing's build rates were at. They were, I would say, small, and they were pushing quarter to quarter, not cancellations or pushing out of even this year. So the majority of them, I would say, it's probably split between Forged Products and SM. A lot of the material that goes to Forged Products we produce. And it did hit both of the OEMs. I will say the GTF is a unique situation, right? So we're continuing to ramp and work with them. So there was no impact from that program. Okay. Then, Don, does the guidance for 2025 and 2027 leave meaningful cushion for things like you've experienced over the last several years, like demand disruption, operational challenges and outages, or weather-related challenges? Yeah, generally, it does. But let me drill in a little bit, okay? So when you think about 2027s, let's get that off the table. Our 2027s, yep, it includes a number of scenarios, and those scenarios drive the range of our guidance, and so we believe we've been pretty thoughtful in that, then let's look at 2025, so as you think about 2025, we gave an original guide of $800 million-$900 million. And as we talked about that, and we gave that guide in November of 2023, as we talked about that guide, we said, "Hey, the range is it's driven by what we expect revenue is going to be and our margin profile," and felt really good about that range. I still feel good about that original range. As we think about the headwinds that will probably carry into or the early part of 2025, even though those headwinds will be there, we are still expecting modest growth, and certainly in the first half, and accelerated growth in the second half of 2025. That's driven by our underlying end markets are strong, regardless of the work stoppage with Boeing and some of these growing pains in the supply chain. We're seeing significant positive signals in jet engine and defense in the aero- like that we talk about. We anticipate the business will do well and be within that original range. Now, we had announced some additional sales commitments at the Farnborough Airshow. That would add about $40 million of EBITDA to the original range. That is an area where we believe, with these headwinds, we're probably in 2025 not going to see the full effect of that incremental $40 million. But this business, being able to deliver $800 million to $900 million, obviously, $850 million is the midpoint there, is, I think, a pretty good indicator of how positive we feel about this business. Did that help answer your question? Thank you. Yeah, it did. Thank you. And Don, just to clarify, were the asset sales in the prior free cash flow guide as well? So yeah, some were. So these are discrete asset sales. You never quite know what you're going to get. We really do kind of go through our asset portfolio on a regular basis and identify if there's any capital in there that we could redeploy through a sale process. So it's in a normal course for us to do that. I would say $40 million in a given quarter is on the high side. We wouldn't have expected that much, but there would have been some element of cash generated through this process. And as we think about the capital guide that we've given that, on average, we expect to spend about $200 million of CapEx each year. As part of doing the calculation for that kind of spend, we take into consideration things like customer-funded CapEx. We don't, somebody's going to give us $20 million for putting in an asset on their behalf. Hey, we'll take it. We don't put it into our spending calculation because they're paying for it. Same idea here. As we think about cash proceeds from asset sales, we'll typically tuck that in as a net offset funding source for our CapEx program. Not huge dollars, typically, but helpful in getting the returns that our shareholders deserve. Thank you. Thank you. This concludes our Q&A session. So I'll pass you back over to Dave Weston. Thank you. As we move to close our call, I'd like to thank everyone for their time and invite everyone to reach out to our investor relations teams with any other questions. With that, I'll pass it over to Kim for some closing remarks. Thanks, Dave. So let me just reiterate before we wrap up here, one, thank you for all those questions. The fundamentals in the aero and the defense markets are strong. And we're seeing quarter-over-quarter growth and margin expansion. ATI is well-positioned with differentiated products where there are only a few companies in the world, and in some cases, only us are able to make the materials that we do. Our customer relationships are growing and getting stronger every day because we are delivering for them when they need it. We are producing the highest quality products, and they can rely on that. And we are developing new solutions for tomorrow's design challenges. So again, appreciate the time, and thanks, everyone, for joining the call. This concludes our call today. Thank you for joining. You may now disconnect your line.