ATI 10-K & 10-Q changes, risk factors and insider trading

Risks Associated with Cyclicality in General Industrial Markets. 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. These markets tend to be highly cyclical and subject to volatility as a result of fluctuations in worldwide economic activity and associated demand, changes in applicable regulation, global geopolitical conditions and numerous other factors. Demand for our products, particularly within the AA&S segment, is subject to these trends, and in recent years, our business has at times been negatively impacted by depressed demand from general industrial markets. We expect that these end markets will remain highly cyclical. Future downturns in these markets could have an adverse effect on the prices at which we are able to sell our products, and our results of operations, business and financial condition could be materially adversely affected.

Risks Associated with Product Pricing. From time-to-time, reduced demand, intense competition, and excess manufacturing capacity have resulted in reduced prices, excluding raw material surcharges, for many of our products. These factors, recent inflationary trends for certain critical raw material costs, and potential international trade actions, as discussed below, have had and may have an adverse impact on our revenues, operating results, and financial condition.

Risks Associated with Key Customers. We have long-term contracts with certain of our customers, some of which are subject to renewal, renegotiation, or re-pricing at periodic intervals or upon changes in competitive supply conditions. Our failure to successfully renew, renegotiate or favorably re-price such agreements, or a material deterioration in or termination of these or other key customer relationships, could result in a reduction or loss in customer purchase revenue. Additionally, a significant downturn or deterioration in the business or financial condition or lossLoss of a key customer could negatively impact our business. OurAdditionally, a significant downturn or deterioration in the markets we serve could cause key customers mayto 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.

Dependence on Critical Raw Materials Subject to Price and Availability Fluctuations. We rely to a substantial extent on third parties to supply certain raw materials that are critical to the manufacture of our products. Purchase prices and availability of these critical items are subject to volatility, and in some cases, we have supply arrangements with only a limited number of suppliers for a given material. At any given time, we may be unable to obtain an adequate supply of these critical raw materials on a timely basis, on price and other terms acceptable to us, or at all. If suppliers increase the price of critical raw materials, we may not have alternative sources of supply. 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 imposeimpose, 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. The prices for many of the raw materials we use have been volatile during the past several years. Due to the long lead times required to manufacture many of our products, volatility in raw material prices exposes us to cash costs that may not be fully recovered through surcharge and index pricing mechanisms. Recently, due to inflationary trends, certain critical raw material costs, such as for nickel, hafnium, titanium sponge, cobalt, chromium, and molybdenummolybdenum, and scrap containing iron, nickel, titanium, chromium,chromium and molybdenummolybdenum, have been volatilevolatile, and they may continue to be so in the future, including as a result of changes in international trade policy. While we have been able to mitigate some of the adverse impact of volatile raw material costs through various means, including the application of raw material surcharges or pricing indices to customers, rapid changes in raw material costs cause volatility in, and may adversely affect, our results of operations.

Dependence on Critical Supplies Subject to Price and Availability Fluctuations. We rely on third parties for certain supplies, such as graphite electrodes and industrial gases including helium and argonargon, that are critical to the manufacture of our products. Purchase prices and availability of these critical items are subject to volatility. At any given time, we may be unable to obtain an adequate supply of these critical supplies on a timely basis, on price and other terms acceptable to us, or at all. If suppliers increase the price of these items, we may not have alternative sources of supply. The manufacture of some of our products is a complex process and requires long lead times. If suppliers increase the price of these critical supplies, we may not have alternative sources of supply. As a result, we may experience delays or shortages of critical supplies. If unable to obtain adequate and timely deliveries of required supplies, we may be unable to timely manufacture sufficient quantities of products. This could cause us to lose sales, incur additional costs, delay new product introductions, or suffer harm to our reputation.

Availability of Energy Resources. We rely upon third parties for our supply of energy resources consumed in the manufacture of our products. The prices for and availability of electricity, natural gas, oil and other energy resources are subject to volatile market conditions. These market conditions often are affected by political and economic factors and by supply and demand trends that are beyond our control. Disruptions in the supply of energy resources could temporarily impair our ability to manufacture products for customers. 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 adverselydo affectso ourin profitability.the future. To the extent that these uncertainties cause suppliers and customers to be more cost sensitive, increased energy prices may have an adverse effect on our results of operations and financial condition.

Labor Matters. We have approximately 7,7007,600 active employees, of which approximately 15% are located outside the U.S. Approximately 35% of our workforce is covered by various CBAs, predominantly with the USW. At various times, our CBAs expire and are subject to renegotiation. Generally, CBAs that expire may be terminated after notice by the union. After termination, the union may authorize a strike. A labor dispute, which could lead to a strike, lockout, or other work stoppage by the employees covered by one or more of the collective bargaining agreements, could have a material adverse effect on production at one or more of our facilities and, depending upon the length of such dispute or work stoppage, on our operating results. 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.expire Theor Companyin isnegotiating currentlynew renegotiating CBAs, which expireCBAs on Februaryterms 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 renegotiationsacceptable to replaceus theor expiringat CBAs.all.

Risks Associated with Cybersecurity Threats. Increased global information technology threats, vulnerabilities, and a rise in sophisticated and targeted international computer crime pose a risk to the security of our systems and networks and the confidentiality, availability and integrity of our data. We believe that ATI faces the threat of such cyberattacks due to the markets we serve, the products we manufacture, the locations of our operations, and global interest in our technology. Due to the evolving nature of cybersecurity threats, the scope and impact of any incident cannot be predicted. We continually work to strengthen our threat countermeasures, safeguard our systems and mitigate potential risks. Despite our efforts to fortify our cybersecurity and protect sensitive information and confidential and personal data, our facilities and systemssystems, and those of our third-party service providersproviders, may be vulnerable to security breaches. A significant security breach could lead to unanticipated disclosure, modification or destruction of proprietary and other key information, production downtimes, operational disruptions, the loss of customers, and remediation costs,costs and other losses or liabilities, which in turn could adversely affect our reputation, competitiveness and results of operations.

While the prospect of a lower-carbon economy presents a number of opportunities for our business, the physical impacts of climate change, regulatory efforts to transition to a lower-carbon economy in the regions in which we, our customers and our suppliers operate, and the increased focus and evolving views of our various stakeholders on climate change issues could create risks to our business.

Regulatory and Other Transition Risks. Increased worldwideWorldwide focus on climate change has led to legislative and regulatory efforts to combat both potential causes and adverse impacts of climate change. New or more stringent laws and regulations related to greenhouse gas emissions, water usage and other climate change related concerns may adversely affect us, our suppliers and our customers. We have publicly disclosed efforts to reduce certain environmental impacts, including greenhouse gas (GHG) emissions of our operations, and provide for our compliance with applicable environmental regulations. Nevertheless, new and evolving laws and regulations could mandate different or more restrictive standards; increase operating costs; require (or cause customers to require that we make) capital investments to transition to low carbon technologies or purchase carbon credits; or otherwise adversely impact our ongoing operations. Our suppliers may face similar challenges and incur additional compliance costs that are passed on to us. These direct and indirect costs may adversely impact our results.

Market and Reputational Risks. Technology to support the transition to lower-carbon operations within the timeframe that could be required by future regulation or expected in the future by our customers may not be available at the scale necessary to support our operations,operations in a timely or cost-effective manner or at all. It is possible that, over time, due to both regulatory action and/or changing customer and societal norms and expectations regarding the causes and importance of climate change issues, demand for products in one or more of our significant end markets could decline or, if we fail to keep pace with changing demand and technological advancement, shift in favor of products that we do not produce. If we fail to appropriately adapt to the expectations of our customers or other stakeholders, fail to achieve or properly report progress toward our environmental sustainability goals and targets or otherwise are perceived as failing to adequately address climate change concerns, the resulting negative perceptions could adversely affect our business, reputation and access to capital.

Risks Associated with Other Environmental Compliance Matters. We are subject to various domestic and international environmental laws and regulations that govern the discharge of pollutants and disposal of wastes, and which may require that we investigate and remediate the effects of the release or disposal of materials at sites associated with past and present operations. We could incur substantial cleanup costs, fines and civil or criminal sanctions, third party property damage or personal injury claims as a result of violations or liabilities under these laws or non-compliance with environmental permits required at our facilities. We are currently involved in the investigation and remediation of a number of our current and former sites as well as third party sites. We also could be subject to future laws and regulations that govern greenhouse gas emissions and various matters related to climate change and other air emissions, which could increase our operating costs. With respect to proceedings brought under the federal Superfund laws, or similar state statutes, we have been identified as a potentially responsible party (PRP) at 4140 of such sites, excluding those at which we believe we have no future liability. Our involvement is limited or de minimis at approximately 19 of these sites, theand potential loss exposure with respect to 1413 individual sites is not considered to be material,material. and theThe potential loss exposure on the remaining 8eight sites could be material. We are a party to various cost-sharing arrangements with other PRPs at many of the sites. The terms of the cost-sharing arrangements are subject to non-disclosure agreements as confidential information. Nevertheless, the cost-sharing arrangements generally require all PRPs to post financial assurance of the performance of the obligations or to pre-pay into an escrow or trust account their share of anticipated site-related costs. In addition, the Federal government, through various agencies, is a party to several such arrangements.

From time-to-time, we are a party to lawsuits and other proceedings involving alleged violations of, or liabilities arising from, environmental laws. When our liability is probable and we can reasonably estimate our costs, we record environmental liabilities in our financial statements. In many cases, we are not able to determine whether we are liable or if liability is probable or to reasonably estimate the potential loss or range of loss.loss associated with an alleged claim. Estimates of our liability remain subject to additional uncertainties, including the nature and extent of site contamination, available remediation alternatives, the extent of corrective actions that may be required, and the participation number and financial condition of other PRPs, as well as the extent of their responsibility for the remediation. We intend to adjust our accruals to reflect new information as appropriate. Future adjustments could have a material adverse effect on our results of operations in a given period, but we cannot reliably predict the amounts of such future adjustments. At December 29,28, 2024,2025, our reserves for environmental matters totaled approximately $15 million. Based on currently available information, we do not believe that there is a reasonable possibility that a loss exceeding the amount already accrued for any of the sites with which we are currently associated (either individually or in the aggregate) will be an amount that would be material to a decision to buy or sell our securities. Future developments, administrative actions or liabilities relating to environmental matters, however, could have a material adverse effect on our financial condition or results of operations.

Risks Associated with Disruptions to our Manufacturing Processes. The manufacture of many of our products is a highly exacting and complex process. If we encounter disruptions to our manufacturing processes due to equipment malfunction, failure to follow specific protocols, specifications and procedures, supply chain interruptions, natural disasters, geopolitical volatility, health pandemics, cybersecurity breaches, labor unrest, or otherwise, it could have an adverse impact on our ability to fulfill orders or on product quality or performance which could result in significant costs to and liability for us that could have a material adverse effect on our business, financial condition or results of operations, as well as negative publicity and damage to our reputation, which could adversely impact product demand and customer relationships. Additionally, our operations depend on the continued and efficient functioning of our facilities, including critical equipment. If our operations, particularly one of our manufacturing facilities, were to be materially disrupted for any reason, we may be unable to effectively meet our obligations to or demand from our customers, which could adversely affect our financial performance.

Risks Associated with Export Sales and International Trade Matters. We believe that export sales will continue to account for a significant percentage of our future revenues. We also import certain raw materials that are important to our business, including nickel, zirconium, niobium, chromium, hafnium, cobalt, vanadium and titanium sponge, among others. Risks associated with such international trade include, among others: political and economic instability, including weak conditions in the world’s economies; accounts receivable collection; export controls; trade sanctions; changes in legal and regulatory requirements; policy changes affecting the markets for our products; changes in tax laws, including taxes on repatriation of foreign earnings; and exchange rate fluctuations (which may affect sales to international customers and the value of profits earned on export sales when converted into dollars). Any of these factors could materially adversely affect our results for the period in which they occur. We source some materials from China, which has 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.

Additionally, global trade policy may, at times, be volatile and unpredictable, and changes in international trade duties and other aspects of international trade policy, both in the U.S. and abroad, could materially impact our business. Tariffs, or other changes in U.S. trade policy, have resulted in and may continue to trigger, retaliatory actions by affected countries. At times, certain foreign governments have instituted or considered imposing trade sanctions on certain U.S. goods, or taking action to deny U.S. companies access to critical raw materials,materials in response to U.S. trade actions, and these or other foreign governments could continue or expand upon these actions in the future. A “trade war” of this nature or other governmental action related to tariffs or international trade agreements or policies has the potential to adversely impact demand for our products, our costs, customers, suppliers and/or the U.S. economy or certain sectors thereof and, thus, to adversely impact our businesses.

Risks Associated with Current or Future Litigation and Claims. A number of lawsuits, claims and proceedings have been or may be asserted against us relating to the conduct of our currently and formerly owned businesses, including those pertaining to product liability, patent infringement, commercial disputes, government contracting, employment matters, employee and retiree benefits, taxes, environmental matters, personal injury and health and safety and occupational disease, and stockholder and corporate governance matters. Due to the uncertainties of litigation, we can give no assurance that we will prevail on all claims made against us in the lawsuits that we currently face or that additional claims will not be made against us in the future. While the outcome of litigation cannot be predicted with certainty, and some of these lawsuits, claims or proceedings may be determined adversely to us, we do not believe that the disposition of any such pending matters is likely to have a material adverse effect on our financial condition or liquidity,liquidity. althoughHowever, the resolution in any reporting period of one or more of these matters could have a material adverse effect on our results of operations for that period. Also, we can give no assurance that any other claims brought in the future will not have a material effect on our financial condition, liquidity or results of operations.

In August 2024, the Company received notice that it and certain of its affiliates are parties to two lawsuits, filed in federal district court for the Western District of Pennsylvania, that assert various claims associated with the Company’s October 2023 purchase of group annuity contracts to transfer a portion of its U.S. qualified defined benefit pension plan obligations to Athene Annuity and Life Company and Athene Annuity & Life Assurance of New York. These two lawsuits were consolidated in late 2024, and in January 2025, we filed a motion to dismiss the consolidated claims. Following an August 2025 hearing on the motion to dismiss, the magistrate judge covering the Motion issued a report recommending that all of the plaintiffs’ claims be dismissed for lack of standing. The recommendation remains subject to review and disposition by the presiding judge. We intend to vigorously defend against these claims, but given the preliminary nature of these matters, cannot predict their outcome or estimate any range of reasonably possible loss at this time.

Risks Associated with Acquisition and Disposition Strategies. We intend to continue to strategically position our businesses to improve our ability to compete. Strategies we employ to accomplish this may include seeking new or expanding existing specialty market niches for our products, expanding our global presence, acquiring businesses complementary to existing strengths, and continually evaluating the performance and strategic fit of our existing business units and their components.components, as a result of which we may choose to dispose of any such business or related assets. From time-to-time, management holds discussions with management of other companies to explore acquisitions, joint ventures, and other business combination opportunities, as well as possible asset acquisitions or dispositions. As a result, the relative makeup of the businesses comprising our Company is subject to change. Acquisitions, joint ventures, and other business combinations involve various inherent risks, such as: the relative accuracy of our assessment of the value, strengths, weaknesses, contingent and other liabilities and potential profitability of acquisition or other transaction candidates; the potential loss of key personnel of an acquired business; unanticipated conditions or events that impact our ability to achieve identified financial and operating synergies, growth or other benefits anticipated to result from an acquisition or other transaction; and unanticipated changes in business and economic conditions. The relative success of any business or asset acquisitions and other similar transactions, particularly any cross-border transaction, also could be negatively affected by export controls, exchange rate fluctuations, domestic and foreign trade policy and other geopolitical conditions, changes in tax laws and deterioration in domestic and foreign economic conditions.

Risks Associated with Political and Social Turmoil. The war on terrorism, as well as global political and social turmoil, generally, could put pressure on economic conditions in the U.S. and worldwide. These political, social and economic conditions could make it difficult for us, our suppliers, and our customers to forecast accurately and plan future business activities, and could adversely affect the financial condition of our suppliers and customers and affect customer decisions as to the amount and timing of purchases from us. As a result, our business, financial condition and results of operations could be materially adversely affected.

Risks Associated with Indebtedness. Our substantial indebtedness could adversely affect our business, financial condition or results of operations and prevent us from fulfilling our obligations under our outstanding indebtedness. As of December 29,28, 2024,2025, our total consolidated indebtedness was approximately $1.9$1.7 billion. We also had the ability to borrow approximately $525$569 million under our Asset Based Lending (ABL) credit facilityfacility, and up to $100 million of availability under the Delayed-Draw Term Loan as of December 29,28, 2024.2025. This substantial level of indebtedness increases the risk that we may be unable to generate enough cash to pay amounts due in respect of our indebtedness. Our substantial indebtedness could have important consequences to our stockholders and significant effects on our business. For example, it could:

Risks Associated with Retirement Benefits. On October 17, 2023, we purchased group annuity contacts from an insurer covering approximately 85% of our U.S. qualified defined benefit plan obligations. Under these contracts, we transferred the pension obligations and associated assets for the significant majority of our remaining plan participants to the selected insurance company. Using our long-term weighted average expected rate of return on pension plan assets and other actuarial assumptions, we do not expect to have anyapproximately significant$40 million of minimum cash funding requirements to ourthe defined benefit pension plan forover atthe leastnext ten years. Minimum cash funding requirements are not expected to be significant in any individual year. However, these estimates are based on various assumptions and are subject to significant uncertainty, including with respect to the performance of our pension trust assets, and our expectations therefore could prove to be inaccurate. Significantly lower than expected returns on our pension assets could result in otherwise unanticipated pension contribution obligations in the future. Depending on the timing and amount, a requirement that we fund the U.S. qualified defined benefit pension plan could have a material adverse effect on our results of operations and financial condition.

Risks Associated with Goodwill or Long-Lived Asset Impairments. We have various long-lived assets that are subject to impairment testing. We review the recoverability of goodwill annually, or more frequently whenever significant events or changes in circumstances indicate that the recorded goodwill of a reporting unit may be below that reporting unit’s fair value. Our businesses operate in highly cyclical industries, such as commercial aerospace, and as such, our estimates of future cash flows, market demand, the cost of capital, and forecasted growth rates and other factors may fluctuate, which may lead to changes in estimated fair value and, therefore, impairment charges in future periods. For the fiscal year 20242025 annual goodwill impairment evaluation, both of our reporting units with goodwill had fair values that were in excess of carrying value. Additionally, we have a significant amount of property, plant and equipment and acquired intangible assets that may be subject to impairment testing, depending on factors such as market conditions, the demand for our products, and facility utilization levels. Any determination requiring the impairment of a significant portion of goodwill or other long-lived assets has had, and may in the future have, a negative impact on our financial condition and results of operations.

Risks Associated with Internal Controls Over Financial Reporting. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

CertainThe statementsfollowing contained in this Management’sManagement's Discussion and Analysis of Financial Condition and Results of Operations (MD&A) is intended to help the reader understand our results of operations and financial condition or the year ended December 28, 2025 (fiscal year 2025) as compared to the year ended December 29, 2024 (fiscal year 2024). The MD&A includes certain statements that are forward-looking statements. Actual results or performance could differ materially from those encompassed within such forward-looking statements as a result of various factors, including those described below. NetThe incomeMD&A should be read in conjunction with our consolidated financial statements and netnotes incomethereto perincluded sharein amountsPart referencedII, belowItem are8 attributable(Financial to ATI Inc.statements and Subsidiaries.Supplementary The following discussion on the Company’s resultsData) of operations,this financialForm condition and liquidity for the year ended December 29, 2024 (fiscal year 2024) as compared to the year ended December 31, 2023 (fiscal year 2023) is presented.10-K. Information on the Company’s results of operations, financial condition and liquidity for fiscal year 20232024 as compared to the year ended JanuaryDecember 1,31, 2023 (fiscal year 20222023) is included in our Annual Report on Form 10-K in Item 7. “Management’s Discussion and Analysis of Financial Condition and Results of Operations” filed on February 23,21, 20242025 and is incorporated herein by reference.

Sales in fiscal year 20242025 increased 5%, to $4.4$4.6 billion, and gross profit increased 12%, to $898$1.0 million,billion, compared to fiscal year 2023,2024, reflecting increased demand for products within our aerospace & defense andend other core markets of medical, electronics, and specialty energy, which wasmarkets, partially offset by softness in industrialthe medical, other industrial, and specialty energy end markets. International sales, including both U.S. exports and foreign sales from our foreign manufacturing operations, were $1.8$1.9 billion in fiscal year 20242025 and represented 42%43% of total sales, compared to $1.9$1.8 billion or 46%42% of total sales in fiscal year 2023.2024.

Results for fiscal year 2025 included $70 million of net pre-tax charges and fiscal year 2024 included $17 million of net pre-tax gains and fiscal year 2023 included $104 million of net pre-tax charges as further described in the Results of Operations section below. The Company’s net income for fiscal year 20242025 was $367.8$404.3 million, or $2.55$2.85 per share. ATI Adjusted EBITDA for fiscal year 20242025 was $859.3 million, or 18.7% of sales, compared to $729.1 million, or 16.7% of sales, compared to $634.6 million, or 15.2% of sales, for fiscal year 2023.2024. See further explanation below for non-GAAP definitions and calculations.

OurKey majorfinancial accomplishmentshighlights duringof fiscal year 20242025 include the following:

•Year-over-year sales growth of approximately 5%, with ATI’s 20242025 sales representing our highest total since 2012. Fiscal year 20242025 sales to the aerospace & defense markets increased 10%14% and representrepresented 62%68% of our total sales, compared to 59%62% of total sales in fiscal year 2023. We achieved 15% year-over-year sales growth in our other core markets, including increases of 27% and 22% in the medical and electronics markets, respectively. Sales to our aerospace & defense and other core markets increased 11% compared to fiscal year 2023.2024.

•We generated cash flow of $407.2$614.3 million from operating activities in fiscal year 20242025, an increase of almost 51% compared to fiscal year 2024, as we continued efforts to focus on operational improvements to positively impact the inventory intensity of our business and alleviatereduce the required investment of managed working capital in relation to our growinggrowth business.in sales. Managed working capital as a percent of sales was 32.5% as of December 28, 2025, compared to 30.9% as of December 29, 2024, comparedprimarily due to 31.0%the astiming of Decemberpayments 31,to 2023,vendors despiteand anthe 5% increase in 20242025 sales of 5%. We ended the year with $721 million of cash on hand and $1.3 billion of total liquidity including the undrawn capacity under our ABL credit facility.sales.

•In 2024, weWe continued our disciplined approach to returncapital allocation, funding growth while returning cash to our shareholders through the repurchase of our stock. We repurchased 5.3approximately 6.4 million shares of ATI stock for $260$470 million,million usingin allfiscal theyear 2025. We have approximately $120 million of share repurchase authorization remaining $150 million under the plan approved by our Board of Directors in November 2023 and $110 million under the $700 million plan approved in 2024.Directors.

•We madecontinued progressto in deleveragingdeleverage our balance sheet.sheet, Duringrepaying $150 million of debentures in the thirdfourth quarter of 2024,2025. Further, we redeemedreduced our interest expense in fiscal year 2025 by approximately $9.0 million compared to fiscal year 2024, which was due to the redemption of the $291.4 million outstanding principal amount of ATI’s 3.5% Convertible Senior Notes due 2025 (2025 Convertible Notes) byduring issuingthe 18.8third million sharesquarter of ATI stock. In addition, we received cash proceeds of $76 million to settle the capped call associated with these notes.2024.

Fiscal year 20242025 sales increased $188.4$225.3 million to $4.4$4.6 billion compared to fiscal year 2023,2024, primarily due to increased demand for nextcommercial generation commercialjet engine products and for defense applicationsapplications. and commercial airframes. This increase inTotal sales to the aerospace & defense markets was complementedincreased by an14% compared to fiscal year 2024. This increase in sales across our other core markets, primarily for the medical and electronics end markets. These increases werewas partially offset by softnesslower insales to the medical, specialty energy, and certain industrial markets,end particularly the conventional energy market.markets.

ATI produces specialty materials, highly differentiated by our materials science expertise and advanced process technologies. Aerospace & defense, our largest end markets, represented 69% of sales for the quarteryear-to-date period ended MarchJune 29,28, 2026, led by products for jet engines and airframes in addition to a wide range of defense applications. Additionally, we have a strong presence in the specialty energy market and serve customers in several other markets including conventional energy, medical, electronics and other industrial markets.

We operate in two business segments: High Performance Materials & Components (HPMC) and Advanced Alloys & Solutions (AA&S). HPMC produces a wide range of high performance materials, components, and advanced metallic powder alloys. These products are made from nickel-based alloys and superalloys, titanium and titanium-based alloys, and a variety of other specialty materials. HPMC’s capabilities range from cast/wrought and powder alloy development to production of highly engineered finished components, and 3D-printed aerospace products. The HPMC segment’s primary focus is on maximizing jet engine materials and components growth, with approximately 93% of its revenue derived from the aerospace & defense markets, including approximately 70%71% from products for commercial jet engines.

The AA&S segment produces nickel-based alloys, titanium and titanium-based alloys, and specialty alloys, including zirconium, hafnium, and niobium, in a variety of forms including plate, sheet, and strip products. AA&S focuses on high-value materials that are utilized in technically challenging and extreme environments, which require materials that can withstand extreme heat, radiation and corrosion. Sales to the aerospace & defense markets comprisescomprise approximately 43% of total AA&S sales. AA&S also serves customers across several other markets, notably specialty energy and conventional energy, as well as electronics and certain industrial markets.

FirstSecond quarter 2026 sales increased approximately 1%11% to $1.15$1.26 billion, compared to $1.14 billion of sales for the firstsecond quarter 2025, primarily due to increasedhigher demandpricing and favorablestrong pricingdemand in the aerospace & defense markets, partiallyparticularly offsetfor bycommercial ajet netengine declineand innaval salesnuclear todefense our other markets, mostly in the conventional energy market.products. In aggregate, ATI’s aerospace & defense sales increased 6%13% to $797.6$862.0 million, or 69%68% of total sales in the firstsecond quarter 2026, compared to $754.4$761.8 million, or 66%67% of total sales in the firstsecond quarter 2025. TheAlso, increasesales to other markets increased $21 million in aerospacethe &second defensequarter sales2026 wascompared drivento bythe commercialsecond jetquarter engine2025, primarily due to increases in various industrial markets, including conventional energy and defense products, partially offset by a decline in sales of commercial airframe products.automotive.

For the firstsecond quarter 2026, international sales increaseddecreased to $459$464 million, or 40%37% of total sales, from $501$490 million, or 44%43% of total sales, in the firstsecond quarter 2025.

GrossOur gross profit for the first quarter of 2026 was $262.9$572.7 million, or 22.8% of sales, compared to $235.8 million, or 20.6%23.7% of sales, for the firstyear-to-date quarterperiod ended June 28, 2026, compared to $478.3 million, or 20.9% of sales for the year-to-date period ended June 29, 2025. FirstYear-to-date quarterperiod ended June 28, 2026 gross profit includes $7.9 million of start-up and transaction-related costs of $14.1 million and $1.1 million of restructuring-related costs, which are excluded from Adjusted EBITDA. FirstYear-to-date quarterperiod ended June 29, 2025 gross profit includes $4.0a benefit of $7.2 million related to the recognition of previously deferred employee retention tax credits, of which $4.4 million related to the HPMC segment and $2.8 million related to the AA&S segment. Year-to-date period ended June 29, 2025 gross profit also includes $11.1 million of start-up and transaction-relatedtransaction costs, which are excluded from Adjusted EBITDA.

Selling and administrative expenses for the firstsecond quarter 2026 were $92.1$95.7 million, an increase of 8.4%15.6% compared to $85.0$82.8 million for the firstsecond quarter 2025. The increase was primarily due to $8.0$11.0 million of transformation and transaction-related costs and $2.4$2.6 million of losses on the sale of customer accounts receivable, which are excluded from Adjusted EBITDA. FirstSecond quarter 2025 included $1.6 million of losses on the sale of customer accounts receivable, which are excluded from Adjusted EBITDA.

FirstSecond quarter 2026 included restructuring-related severanceseverance, impairment, and impairmentother costs of $7.0$3.9 million due to the rationalization of certain facilities, which are excluded from Adjusted EBITDA. ThereSecond werequarter no2025 restructuringincluded chargesa credit of $1.3 million, due to a reduction in firstseverance-related quarterreserves 2025.based on revised workforce reduction estimates.

Gain/Loss on Asset Sales and Sales of Businesses, net

The lossgain on asset sales and sales of businesses, net of $3.9$9.8 million induring firstthe quarter 2025and year-to-date periods June 28, 2026 was mostlyprimarily attributable to the prior year sale of certaina immaterial,previously non-coreclosed operationsmanufacturing thatfacility wereduring the second quarter of 2026, which was part of our European business in the HPMCAA&S segment.

Interest expense, net increaseddecreased to $23.7$23.9 million in the firstsecond quarter of 2026 compared to $23.0$25.4 million in the firstsecond quarter of 2025. Capitalized interest reduced interest expense by $3.0$3.2 million in the firstsecond quarter 2026 and $3.1$2.1 million in the firstsecond quarter 2025. The increasedecrease in interest expense, net was primarily related to increasedthe borrowingsyear-over-year madeincrease in interest capitalization on ourstrategic revolvingcapital credit facility in the first quarter 2026.projects.

Our effective tax rate for the firstsecond quarter of 2026 was 11.8%,20.0%, resulting in an income tax provision of $16.1$38.6 million, and our effective tax rate for the firstsecond quarter of 2025 was 17.3%,22.0%, resulting in an income tax provision of $21.0$29.3 million. The lower effective tax rate on a year-over-year basis was primarily due to the timing and amount of discrete tax benefits. The effective tax rate for the firstsecond quarter of 2026 includes discrete tax benefits of $11.9$1.2 million, primarily for share-based compensation, while the effective tax rate for the firstsecond quarter of 2025 includes discrete tax benefitsexpense of $5.1$0.6 million. TheExcluding the discrete tax benefitsitems, the Company's effective tax rate for the second quarter 2026 and 2025 was 20.6% and 21.5%, respectively. The decline in boththe periodseffective tax rate primarily reflects the availability of certain deductions in 2026 that were primarilylimited forin share-based2025, compensation.following the enactment of the One Big Beautiful Bill Act.

Net income attributable to ATI was $118.2$151.0 million, or $0.85$1.09 per share, in the firstsecond quarter of 2026, compared to $97.0$100.7 million, or $0.67$0.70 per share, for the firstsecond quarter of 2025.

Comparative financial information (in millions) for our segments and corporate operations for the quarterly and year-to-date periods ended MarchJune 29,28, 2026 and MarchJune 30,29, 2025 is shown below.

(a)The Company’s Chief Operating Decision Maker (“CODM”) utilizes the Segment EBITDA as a key metric to evaluate segment performance. Our measure of Segment EBITDA, which we use to analyze the performance and results of our business segments, excludes net interest expense, income taxes, depreciation and amortization, special charges, unallocated corporate expenses, closed operations and other income (expense). See Note 11 for the reconciliation of Segment EBITDA to Income before taxes.

FirstSecond quarter 2026 sales were $614.3$637.1 million, an increase of $30.2$28.3 million, or 5%, compared to the firstsecond quarter 2025, primarily due to sales growth in the the aerospace & defense markets, which increased $31.2$30.9 million, or 6%. This increase was primarily driven by strong demand and pricing for commercial jet engine products, which grew more than 8%10% on a year-over-year basis.

Comparative information for our HPMC segment revenues (in millions) by market and their respective percentages of the segment’s overall revenues for the quarters ended MarchJune 29,28, 2026 and MarchJune 30,29, 2025 is as follows:

International sales represented 45%40% of total segment sales for the firstsecond quarter 2026, compared to 46%43% in the prior year period. Comparative information for the HPMC segment’s major product categories, based on their percentages of revenue for the quarters ended MarchJune 29,28, 2026 and MarchJune 30,29, 2025, is as follows:

Segment EBITDA in the firstsecond quarter 2026 was $152.9$153.5 million, or 24.9%24.1% of total sales, compared to $131.0$144.0 million, or 22.4%23.7% of total sales, for the firstsecond quarter 2025. The increase in segment EBITDA margin rate was primarily due to higher volume and favorable salespricing, mixpartially offset by higher manufacturing and pricing.period costs, including costs associated with revised qualification requirements for our new facility in Mexico and titanium electron-beam furnace.

The Company continues to invest in capacity and to improve work-flow processes and operations. HPMC results for firstsecond quarter 2026 reflected year-over-year improved operating leverage and pricing as we continued to experience strong demand in our key aerospace & defense markets, particularly for commercial jet engine products. We believe our long-term agreements with aerospace market OEMs and backlog for our specialty materials, including powders, parts and components, position the HPMC segment for continued growth.

FirstSecond quarter 2026 sales were $537.2$624.0 million, aan decreaseincrease of $23.1$92.4 million, or 4%,17%, compared to firstsecond quarter 2025, primarily driven by a $37.8 million decline in sales to the conventional energy market. This decrease was partially offset by higher sales to the aerospace & defense and conventional energy markets. TheOn increasea inyear-over-year basis, aerospace & defense sales wasgrew mostlyby due34%, toincluding an increase in defense sales of 90%, reflecting both increased demand for commercial jet engine and defense products, partially offset by lower commercial airframe sales.pricing. Aerospace & defense sales were 43%44% of the total AA&S sales in the firstsecond quarter 2026 compared to 39%38% in firstsecond quarter 2025.

Comparative information regarding our AA&S segment revenues (in millions) by market and their respective percentages of the segment’s overall revenues for the quarters ended MarchJune 29,28, 2026 and MarchJune 30,29, 2025 is shown below.

International sales represented 34%33% of total segment sales for the firstsecond quarter of 2026, compared to 42%44% in the prior year’s firstsecond quarter. Comparative information regarding the AA&S segment’s major product categories, based on their percentages of revenue for the quarters ended MarchJune 29,28, 2026 and MarchJune 30,29, 2025, is presented in the following table. HRPF conversion service sales are excluded from this presentation.

Segment EBITDA was $97.0$147.6 million, or 18.1%23.7% of sales, for the firstsecond quarter 2026, compared to segment EBITDA of $83.4$76.7 million, or 14.9%14.4% of sales, for the firstsecond quarter 2025. TheSegment EBITDA for the second quarter 2026 includes a $9.9 million gain from the sale of a previously closed manufacturing facility. In addition, second quarter 2025 included a $2.6 million benefit from the recognition of previously deferred employee retention tax credits. Excluding the impact of these items, the segment EBITDA margin rate increase compared to the prior year period was primarily due to favorablehigher sales mix changespricing and favorable pricing of exotic alloys.mix.

Corporate expenses for the firstsecond quarter of 2026 declined to $17.0$14.9 million, compared to $17.4$15.4 million for the firstsecond quarter 2025. ThisThe reduction in expenses was primarily due to lowera benefit from an insurance claim, partially offset by higher incentive compensation costs.expense. For the year-to-date period ended June 28, 2026, corporate expenses were $31.9 million, compared to $32.8 million for the year-to-date period ended June 29, 2025. The reduction in expenses was primarily due to a reduction in legal and permitting fees.

Closed operations and other income/expense for the firstsecond quarter 2026 was expense of $1.2$1.8 million, compared to expenseincome of $2.4 million for the firstsecond quarter 2025. TheSecond reductionquarter in2025 expensebenefited in was mostly due to the impact offrom foreign exchange lossesgains inof $1.8 million and a favorable bankruptcy settlement related to an insurance claim of $1.1 million. Closed operations and other income/expense for the prioryear-to-date yearperiod quarter.ended June 28, 2026 was expense of $3.0 million.

We employ several strategies to actively manage our Managed working capital, seeking to effectively balance the need to maintain appropriate levels of Managed working capital to support our growth and operations while deploying our cash efficiently.capital. Our strategies include, but are not limited to, taking advantage of favorable customer and supplier payment terms, participating in supplier financing programs, accounts receivable factoring arrangements and other customer financing programs, managing the timing of purchases of raw materials, and leveling manufacturing process throughput and shipping to limit periodic increases in Managed working capital.shipping. We assess Managed working capital performance as a percentage of the prior three months annualized sales.

At MarchJune 29,28, 2026, Managed working capital increased as a percentage of annualized sales to 34.8%34.3% compared to 32.5% at December 28, 2025. The increase in Managed working capital as a percentage of annualized sales was primarily due to seasonal inventory builds to support increased operating levels and the timing of shipments. As a result, gross inventory turns, which measures how many times we turn over our inventory relative to cost of sales in a year, worsened by 13% at MarchJune 29,28, 2026 compared to December 28, 2025. Days sales outstanding, which measures actual collection timing for accounts receivable, wasimproved relativelyby flat12% atas Marchof 29,June 28, 2026 compared to December 28, 2025.

The computations of Managed working capital at MarchJune 29,28, 2026 and December 28, 2025, reconciled to the financial statement line items as computed under U.S. GAAP, were as follows.

The Company's amended Asset Based Lending (ABL) Credit FacilityFacility, which is collateralized by the accounts receivable and inventory of our operationsoperations, consists of a $200 million term loan (Term Loan) and includes a $600 million revolving credit facility, which includes a letter of credit sub-facility of up to $200 million, a $200 million term loan (Term Loan), and a swing loan facility of up to $60 million. Additionally, the Company hashad the ability, through June 13, 2026 and as long as no default or event of default hashad occurred and iswas continuing, to borrow an additional term loan of up to $100 million in total, using one or two draws (the Delayed-Draw Term Loan)., which it did not exercise. The ABL facility also provides us with the option of including certain machinery and equipment as additional collateral for purposes of determining availability under the facility. The ABL term runs through June of 2030.

As of MarchJune 29,28, 2026, there waswere $75 million inno outstanding borrowings under the revolving portion of the ABL facility, and $29.3 million was utilized to support the issuance of letters of credit. At MarchJune 29,28, 2026, we had $401.7$783.0 million of cash and cash equivalents,equivalents and available additional liquidity under the ABL facility of approximately $495$570 million, and up to $100 million of availability under the Delayed-Draw Term Loan.million. Our next significant debt maturity is $350$325.0 million of 5.875%4.875% Senior Notes in the fourth quarter of fiscal year 2027.2029.

Periodically, our Board of Directors authorizes the repurchase of ATI common stock (the “Share Repurchase Program”), the most recentrecently authorizing the repurchase of whichup wasto $700 million, as announced in September 2024, and an additional $500 million that was announced in February 2026. Repurchases under these programs are made in the open market or in privately negotiated transactions, with the amount and timing of repurchases depending on market conditions and corporate needs. Open market repurchases are structured to occur within the pricing and volume requirements of SEC Rule 10b-18. In the quarter and year-to-date periods ended MarchJune 29,28, 2026, ATI used $75$50 million and $125.0 million, respectively, to repurchase 0.50.3 million and 0.8 million, respectively, of its common stock under the Share Repurchase Program. At MarchJune 29,28, 2026, the Company has utilized $655all of the $700 million in repurchase authority announced in September 2024 and $5 million of the $1.20additional billionrepurchase currentlyauthority authorizedannounced in February 2026. As of June 28, 2026, total share repurchase authorization remaining under its currentlythe active Share Repurchase Programs.Program was $495 million.