ATI

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How ATI rewrote its risk factors

10-K ITEM 1A · FY2024 → FY2025

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Principal competitors in the HPMC segment include: Berkshire Hathaway Inc., for nickel-based alloys and superalloys and specialty steel alloys, titanium and titanium-based alloys, and precision forgings through its ownership of Precision Castparts Corporation and subsidiaries; Howmet Aerospace Inc., for titanium and titanium-based alloys; Carpenter Technology Corporation for legacy nickel-based alloys and superalloys and specialty steel alloys; and Aubert & Duval for precision forgings.
Advanced Alloys & Solutions Segment Our AA&S segment produces nickel-based alloys, titanium and titanium-based alloys, and specialty alloys in a variety of forms, including plate and sheet products.
The major end markets for our flat rolled products are aerospace & defense, specialty and conventional energy, automotive, medical and electronics markets.
The operations in this segment include our Specialty Rolled Products and Specialty Alloys & Components businesses in addition to our Shanghai STAL Precision Stainless Steel Company Limited (STAL) PRS joint venture in China, in which we hold a 60% interest.
In fiscal year 2025, approximately 50% of our stainless sheet products by volume were sold to independent service centers, which have slitting, cutting or other processing facilities, with the remainder sold directly to end-use customers.
In fiscal year 2025, approximately 40% of our plate products by volume were sold to independent service centers, with the remainder sold directly to end-use customers.
Principal competitors for nickel-based alloys, superalloys, and specialty alloys produced by AA&S include Haynes International and VDM Metals GmbH, a subsidiary of Acerinox S.A.
The following is a summary of the primary source countries of raw materials that play an important role in our products: • Nickel: Canada, Norway, Japan, Finland, and South Africa. • Zirconium: U.S. and China. • Hafnium: U.S. and China. • Cobalt: Norway and Japan. • Chromium: the United Kingdom (U.K.), South Africa, Germany and Turkey. • Niobium: Brazil. • Molybdenum: U.S., Brazil, and China. • Titanium sponge: Japan, Kazakhstan, Saudi Arabia, and China Some raw materials, such as nickel, titanium sponge, cobalt, and ferrochromium, are mostly available from foreign sources in countries that may be subject to unstable political and economic conditions, which could disrupt supplies or affect the price of these materials.
Certain key supplies used in melting and other processing operations, such as graphite electrodes and industrial gases including helium and argon, are from time-to-time limited in availability and may be subject to significant price inflation.
Export Sales and Foreign Operations International sales represent approximately 42% of our total annual sales, with direct export sales by our U.S.-based operations to customers in foreign countries accounting for approximately 34% of our total sales.
Backlog, Seasonality and Cyclicality Our backlog of confirmed orders was approximately $3.7 billion at December 28, 2025 and $3.9 billion at December 29, 2024.
We expect that approximately 70% of confirmed orders on hand at December 28, 2025 will be filled during fiscal year 2026.
Our HPMC segment’s backlog of confirmed orders was approximately $3.1 billion at December 28, 2025 and $3.3 billion at December 29, 2024.
We expect that approximately 70% of the confirmed orders on hand at December 28, 2025 for this segment will be filled during fiscal year 2026.
Our AA&S segment’s backlog of confirmed orders was approximately $0.6 billion at December 28, 2025 and December 29, 2024.
We expect that approximately 90% the confirmed orders on hand at December 28, 2025 for this segment will be filled during fiscal year 2026.
Historically, we have experienced modest seasonal weakness in the third quarter of each fiscal year.
This is mostly due to planned outages by certain European customers, particularly those in the aerospace supply chain, that are typically scheduled for the late summer months each year.
Research and development expenditures for the fiscal years ended December 28, 2025, December 29, 2024, and December 31, 2023 included the following: Fiscal Year Ended (In millions) December 28, 2025 December 29, 2024 December 31, 2023 Company-Funded: High Performance Materials & Components $ 10.1 $ 10.4 $ 9.6 Advanced Alloys & Solutions 10.3 8.4 10.2 Corporate 0.9 0.8 0.9 21.3 19.6 20.7 Customer-Funded: High Performance Materials & Components 1.9 2.5 1.4 Total Research and Development $ 23.2 $ 22.1 $ 22.1 Our research, development and technical service activities are closely interrelated and directed toward development of new products, improvement of existing products, quality assurance, development of new manufacturing methods, improvement of existing manufacturing methods, and reducing our manufacturing costs.
As of December 28, 2025, we employed approximately 7,600 active employees, 15% of whom are located outside the U.S. across 15 countries.
Periodically, we conduct confidential company-wide engagement surveys that offer our employees the ability to provide feedback, which supports employee engagement and our overall human capital strategy.
Our long tradition of innovation and operational excellence demands the contributions of leaders and team members with a wide array of characteristics, backgrounds, experiences, knowledge, and skills.
Governanc e : The Compensation and Leadership Development Committee of our Board oversees the Company’s human capital management policies and procedures, including its workforce and professional development programs, and is responsible for establishing and administering the policies governing annual compensation and long-term compensation to ensure the policies are designed to align compensation with our overall business strategy and performance to link to the interests of our stockholders.
We believe in providing an assessment and interviewing process that encourages people from all backgrounds to consider ATI.
We partner with top academic institutions that have programs relevant to our business, external professional organizations, trade schools and high schools to identify materials science, STEM and other relevant expertise.
We focus on growing top talent across the enterprise and enhancing Front Line Leader development.
On April 22, 2025, we reached agreements with the USW for new CBAs that cover approximately 1,100 USW represented full-time employees within our AA&S operations for a six-year term that extends through February 28, 2031.
Our exposure to general industrial markets is primarily in our AA&S segment, where we have sales to the oil and gas industry, automotive, food equipment & appliances and construction and mining markets.
Loss of a key customer could negatively impact our business.
Additionally, a significant downturn or deterioration in the markets we serve could cause key customers to change their business strategies or modify their business relationships with us, including to reduce the amount of our products they purchase or to switch to alternative suppliers, as a result of which our financial condition and results of operations may be adversely affected.
In addition, to the extent that we have quoted prices to customers and accepted customer orders for products prior to purchasing necessary raw materials, or have existing contracts, we may be unable to raise the price of products to cover all or any part of the increased cost of the raw materials.
We source some of these materials from China, which has imposed, and may in the future continue to impose, export controls that could limit or significantly delay our access to such materials and could compel us to identify alternative sources, which we may not be able to do in a timely fashion or at all.
Recently, due to inflationary trends, certain critical raw material costs, such as for nickel, hafnium, titanium sponge, cobalt, chromium, molybdenum, and scrap containing iron, nickel, titanium, chromium and molybdenum, have been volatile, and they may continue to be so in the future, including as a result of changes in international trade policy.
If suppliers increase the price of these critical supplies, we may not have alternative sources of supply.
Further, increases in energy costs, or changes in costs relative to energy costs paid by competitors, has in the past adversely affected our profitability and may continue to do so in the future.
We have approximately 7,600 active employees, of which approximately 15% are located outside the U.S.
Additionally, labor organizations may from time to time attempt to organize groups of additional employees who are not currently covered by any of the CBAs to which we are a party.
The outcome of any such efforts may be influenced by many factors and is difficult to predict.
There can be no assurance that we will succeed in obtaining CBAs to replace those that expire or in negotiating new CBAs on terms acceptable to us or at all.
Risks Associated with Cybersecurity Threats.

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Principal competitors in the HPMC segment include: Berkshire Hathaway Inc., for nickel-based alloys and superalloys and specialty steel alloys, titanium and titanium-based alloys, and precision forgings through its ownership of Precision Castparts Corporation and subsidiaries; Howmet Aerospace Inc., for titanium and titanium-based alloys; Carpenter Technology Corporation for legacy nickel-based alloys and superalloys and specialty steel alloys; VSMPO-AVISMA for titanium and titanium-based alloys; and Aubert & Duval for precision forgings.
Advanced Alloys & Solutions Segment Our AA&S segment produces nickel-based alloys, titanium and titanium-based alloys, and specialty alloys in a variety of forms including plate, sheet, and PRS products.
The major end markets for our flat rolled products are specialty and conventional energy, aerospace & defense, automotive, medical and electronics markets.
The operations in this segment include our SRP and Specialty Alloys & Components businesses in addition to our Shanghai STAL Precision Stainless Steel Company Limited (STAL) PRS joint venture in China, in which we hold a 60% interest.
In fiscal year 2024, approximately 30% of our stainless sheet products by volume were sold to independent service centers, which have slitting, cutting or other processing facilities, with the remainder sold directly to end-use customers.
In fiscal year 2024, approximately 35% of our plate products by volume were sold to independent service centers, with the remainder sold directly to end-use customers.
PRS products, which are under 0.015 inches thick, are used by customers to fabricate a variety of products primarily in the automotive and electronics markets.
In fiscal year 2024, approximately 90% of these products by volume were sold directly to end-use customers or through our own distribution network, with the remainder sold to independent service centers.
With the sale of our New Bedford, MA PRS business in 2024, PRS sales in this segment will be significantly reduced going forward.
Competitors for nickel-based alloys and superalloys and specialty alloys include Haynes International and VDM Metals GmbH, a subsidiary of Acerinox S.A.
Some raw materials, such as nickel, titanium sponge, cobalt, and ferrochromium, are available to us and our specialty materials industry competitors primarily from foreign sources.
Some of these foreign sources are in countries that may be subject to unstable political and economic conditions, which could disrupt supplies or affect the price of these materials.
The following is a summary of the primary source countries of raw materials that play an important role in our products: • Nickel: Canada, Norway, Japan, Finland, and South Africa. • Zirconium: U.S. and China. • Hafnium: U.S. and China. • Cobalt: Norway and Japan. • Chromium: the United Kingdom (U.K.), South Africa, Germany and Turkey. • Niobium: Brazil. • Molybdenum: U.S., Brazil, and China. • Titanium sponge: Japan, Kazakhstan, Saudi Arabia, and China Certain key supplies used in melting and other processing operations, such as graphite electrodes and industrial gases including helium and argon, are from time-to-time limited in availability and may be subject to significant price inflation.
Export Sales and Foreign Operations International sales represent approximately 42% of our total annual sales, with direct export sales by our U.S.-based operations to customers in foreign countries accounting for approximately 33% of our total sales.
In fiscal year 2024, the Company completed the sale of its precision rolled strip operations in Remscheid, Germany, which was part of the HPMC segment.
In fiscal year 2022, the Company completed the sale of its Sheffield, U.K. operations, which included facilities for melting and re-melting, machining and bar mill operations, and was part of the HPMC segment.
Backlog, Seasonality and Cyclicality Our backlog of confirmed orders was approximately $3.9 billion at December 29, 2024 and $3.8 billion at December 31, 2023.
We expect that approximately 70% of confirmed orders on hand at December 29, 2024 will be filled during fiscal year 2025.
Our HPMC segment’s backlog of confirmed orders was approximately $3.3 billion at December 29, 2024 and $3.0 billion at December 31, 2023.
We expect that approximately 70% of the confirmed orders on hand at December 29, 2024 for this segment will be filled during fiscal year 2025.
Our AA&S segment’s backlog of confirmed orders was approximately $0.6 billion at December 29, 2024 and $0.8 billion at December 31, 2023.
We expect that approximately 85% the confirmed orders on hand at December 29, 2024 for this segment will be filled during fiscal year 2025.
Historically, the HPMC segment typically has experienced modest seasonal weakness in the third quarter of each fiscal year due to many European customers, particularly in the aerospace supply chain, taking plant outages during this summer period.
ATI also typically performs corresponding annual preventative maintenance outages at several facilities during this same period.
Research and development expenditures for the fiscal years ended December 29, 2024, December 31, 2023, and January 1, 2023 included the following: Fiscal Year Ended (In millions) December 29, 2024 December 31, 2023 January 1, 2023 Company-Funded: High Performance Materials & Components $ 10.4 $ 9.6 $ 8.4 Advanced Alloys & Solutions 8.4 10.2 7.3 Corporate 0.8 0.9 0.6 19.6 20.7 16.3 Customer-Funded: High Performance Materials & Components 2.5 1.4 1.4 Total Research and Development $ 22.1 $ 22.1 $ 17.7 Our research, development and technical service activities are closely interrelated and directed toward development of new products, improvement of existing products, quality assurance, development of new manufacturing methods, improvement of existing manufacturing methods, and reducing our manufacturing costs.
The increase in our research and development expenditures in fiscal years 2024 and 2023 was largely related to efforts to develop and/or refine materials and manufacturing methods for products supporting the aerospace & defense markets.
Our fiscal year 2024 OSHA Total Recordable Incident Rate was 1.39 per 200,000 hours and our Lost Time Case Rate was 0.26 per 200,000 hours.
As of December 29, 2024, we employed approximately 7,700 active employees, 15% of whom are located outside the U.S. across 15 countries.
Annually, we conduct a confidential company-wide engagement survey that offers our employees the ability to provide feedback and valuable insight to identify opportunities for improvement and support employee engagement and our overall human capital strategy.
Governanc e : The Compensation and Leadership Development Committee of our Board oversees the Company’s human capital management policies and procedures, including its workforce and professional development and diversity and inclusion initiatives, and is responsible for establishing and administering the policies governing annual compensation and long-term compensation to ensure the policies are designed to align compensation with our overall business strategy and performance to link to the interests of our stockholders.
We believe in providing a welcoming, engaging and inclusive assessment and interviewing process that encourages people from all backgrounds to consider ATI.
Our hiring practices include a goal that position candidate slates be composed at least 30% of diverse candidates.
Further, we partner with top academic institutions that have programs relevant to our business, external professional organizations, trade schools and high schools to enhance the diversity of our workforce and identify materials science, STEM and other relevant expertise.
By providing a consistent and comprehensive learning experience, we focus on growing top talent across the enterprise and enhancing Front Line Leader development.
Inclusion and Diversity : Our long tradition of innovation and operational excellence demands the contributions of leaders and team members with a wide array of characteristics, backgrounds, experiences, knowledge, and skills.
We recognize the benefits and importance of diversity amongst our board and management.
As of December 29, 2024, women made up 40% of our Board, and 10% of our Directors were racially diverse.
The Company is currently renegotiating CBAs, which expire on February 28, 2025, that cover approximately 1,100 USW-represented full-time employees within our AA&S operations.
There can be no assurance that the Company will successfully conclude these renegotiations to replace the expiring CBAs.
Our exposure to general industrial markets is primarily in our AA&S segment, where we have sales to the oil & gas industry, automotive, food equipment & appliances and construction and mining markets.

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Sentence-level comparison of Item 1A in the two most recent 10-Ks (FY2024 ↗, FY2025 ↗). A reworded sentence counts as one dropped and one added, so heavy edits read as low “kept”. Headings and page furniture are stripped; nothing is summarised by a model.

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