• Corporate expenses in the first quarter 2020 were $12.8 million, or $3.8 million lower than the prior year period, primarily due to lower incentive compensation expense based on expected performance versus targeted metrics.
• An $8.0 million restructuring charge for a voluntary early retirement program to eligible salaried employees was recorded in the first quarter 2020. Costs for this program are expected to be paid through mid-2021 based on the timing of the benefits provided.
• Closed operations and other expenses in the first quarter 2020 were $6.6 million, or $3.5 million higher year-over-year, mainly due to legal-related costs.
• ATI had a 31% year-to-date effective tax rate for the first quarter 2020, higher than initially expected due primarily to higher overall state taxes based on income apportionment. Due to ongoing global economic uncertainty, the Company was unable to project a full-year effective tax rate for Q1 2020. No significant income tax benefit is expected to be realized from the recently enacted CARES Act. ATI does not expect to pay any significant U.S federal or state income taxes for the next few years due to net operating loss carryforwards.
• Cash on hand at March 31, 2020 was $639.0 million, which included $300 million of borrowings under the revolving credit portion of the Company's asset-based lending (ABL) credit facility. Those first quarter ABL borrowings were repaid in April 2020. At March 31, 2020 available additional liquidity under the ABL was approximately $260 million.
• For the three months ended March 31, 2020, in line with prior years' seasonal patterns and our expectations, cash used in operating activities was $115.4 million, including $134.7 million for managed working capital. ATI contributed $27.9 million to the U.S. defined benefit pension trust during the quarter. Cash used in investing activities was $25.2 million, primarily related to capital expenditures of $29.1 million.

Outlook

“Looking ahead, we anticipate challenging and uncertain economic conditions to continue due to the ongoing COVID-19 pandemic and its impact on the global aerospace industry. We are taking significant steps to help mitigate the negative impacts on our financial results while ensuring the safety of our employees. We are confident that more normalized business conditions will return over time and we stand ready to support our customers' recovery efforts," said Wetherbee. In light of current market uncertainty, the Company is withdrawing its full year 2020 guidance, but will provide additional information regarding its 2020 outlook on the first quarter earnings call.

Allegheny Technologies will conduct a conference call with investors and analysts on Tuesday, May 5, 2020, at 8:30 a.m. ET to discuss the financial results. The conference call will be broadcast, and accompanying presentation slides will be available, at ATImetals.com. To access the broadcast, click on “Conference Call”. Replay of the conference call will be available on the Allegheny Technologies website.

This news release contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Certain statements in this news release relate to future events and expectations and, as such, constitute forward-looking statements. Forward-looking statements, which may contain such words as “anticipates,” “believes,” “estimates,” “expects,” “would,” “should,” “will,” “will likely result,” “forecast,” “outlook,” “projects,” and similar expressions, are based on management’s current expectations and include known and unknown risks, uncertainties and other factors, many of which we are unable to predict or control. Our performance or achievements may differ materially from those expressed or implied in any forward-looking statements due to the following factors, among others: (a) material adverse changes in economic or industry conditions generally, including global supply and demand conditions and prices for our specialty metals; (b) material adverse changes in the markets we serve; (c) our inability to achieve the level of cost savings, productivity improvements, synergies, growth or other benefits anticipated by management from strategic investments and the integration of acquired businesses; (d) volatility in the price and availability of the raw materials that are critical to the manufacture of our products; (e) declines in the value of our defined benefit pension plan assets or unfavorable changes in laws or regulations that govern pension plan funding; (f) labor disputes or work stoppages; (g) equipment outages and (h) business and economic disruptions associated with the currently ongoing COVID-19 pandemic or other similar widespread public health crises that may arise in the future and (i) other risk factors summarized in our Annual Report on Form 10-K for the year ended December 31, 2019, and in other reports filed with the Securities and Exchange Commission. We assume no duty to update our forward‑-looking statements.

Solving the World’s Challenges through Materials Science

ATI (NYSE: ATI) is a $4 billion global manufacturer solving the world’s most difficult challenges through materials science; advanced, integrated process technologies; and relentlessly innovative people. We serve customers whose demanding applications need to fly higher, dig deeper, stand stronger, and last longer— anywhere on, above, or below the earth. We partner to create new specialty materials in forms that deliver ultimate performance and long-term value in applications like jet engine forgings and 3D-printed aerospace components. We produce powders for forging and additive manufacturing; rolled materials, and finished components. Our specialty materials withstand extremes of temperature, stress and corrosion to improve and protect human lives every day. Learn more at ATIMetals.com.