Thank you very much for joining us today. With me today are Mark Comerford, President and CEO of Haynes International; and Dan Maudlin, Vice President and Chief Financial Officer.

Before we get started, I'd like to read a brief cautionary note regarding forward-looking statements. This conference call could contain statements that are forward-looking within the meaning of the Private Securities Litigation Reform Act of 1995 and Section 21E of the Securities and Exchange Act of 1934.

The words believe, anticipate, plan and similar expressions are intended to identify forward-looking statements. Although we believe our plans, intentions and expectations regarding or suggested by such forward-looking statements are reasonable, such statements are subject to a number of risks and uncertainties, and we can provide no assurance that such plans, intentions or expectations will be achieved.

Many of these risks are discussed in detail in the company's filings with the Securities and Exchange Commission, in particular Form 10-K for the fiscal year ended September 30, 2013. The company undertakes no obligation to publicly update or revise any forward-looking statements whether as a result of new information, future events or otherwise.

With that, let me turn the call over to Mark.

Thank you, Dave. Good morning, everyone, and thanks for joining us today.

Hopefully, you've all seen the press release and had a chance to review it. We'll follow our standard agenda in today's call.

I'll open with comments about the business and our end markets, and Dan will give you greater detail on the financial results.

Net revenue in the second quarter was $115.4 million, down 10.7% from last year's $129.2 million. Pounds shipped in the second quarter were 5.7 million, up 2% from last year's 5.6 million.

We reported a net loss of $1.2 million in the second quarter of 2014 versus net income of $6.4 million a year ago. As we mentioned in the press release, it appears we are seeing the end of the destocking and starting to see signs of an upturn in the marketplace.

Lead times are starting to extend, and we are also seeing more confidence from customers in placing longer-term blanket orders, as it's evidenced by the increase in our backlog. Transactional businesses also appears to be picking up, but we're still too early in the recovery to tell if we have a market situation that will continue to strengthen.

Nickel increases during the quarter forced many accounts off the sidelines, increasing order activity. However, as an aside, as March moved into April, some customers pulled back on ordering, as they feel the recent nickel increase was too much, too fast.

And at these levels, they may wait to see how the geopolitical situation in Eastern Europe plays out. Competition is still intense in the marketplace, but it appears many of our peers are also seeing demand increase, and their lead times are pushing out as well in select areas.

Again, it's still too early in the upturn to make any definitive conclusions. But at this point, we feel good about volumes starting to push out some lead times and our ability to start managing the product mix.

Let me move to the markets to give you some color on what we're seeing. Net revenue in the aerospace market for the second quarter of 2014 was $47.3 million, down 4.2% from the second quarter of 2013.

Volume was 2.2 million pounds in the second quarter, up 12.4% from the second quarter of '13's 2 million pounds. Aerospace comprised 41% of our net revenue in the quarter.

Our backlog in aerospace increased during the quarter by roughly 7%, and that's in addition to the sequential increase in revenue of 18%. As you're well aware, our aero tubing business remains solidly booked, and we're starting to see a stronger level of activity in the aero engine side of the business.

We saw quite a few expedites in the aero engine materials side of the business during the quarter. And as evidenced by the backlog, we're seeing more confidence, as customers are starting to place longer-term orders, apparently reserving their spot in the queue, as they start to restock.

We've mentioned last time that we couldn't definitively call it a bottom, but the customers that I've met with all felt at that time that we were near or at the bottom. That sentiment in discussions I've had with customers has strengthened.

As we've mentioned in the press release, we did have a one-off ingot order in the quarter in our aerospace market, aero engine market. So I'm reluctant to say this market is back on a dramatic up-slope, but I do believe that we're beginning to see the end of the destocking that we've been discussing with you for the past 18 to 24 months.

In our chemical processing market, net revenue for the second quarter of 2014 was $30.4 million, down about 10% from the second quarter of '13's $33.9 million. The volume in this market was 1.5 million pounds, up about 6.9% in the second quarter compared to the second quarter of 2013.

CPI accounted for 26% of our net revenues. And our backlog increased about 3% in this area during the quarter.

Sequentially, revenue was up about 32%. And if you recall, last quarter, I told you that the backlog had increased 55%, so we're seeing very good strength in the CPI area.

During the quarter, we saw quite a few small projects utilizing some of the more common competitively priced alloys. We're currently working on some projects utilizing higher-value materials, but it's still too early to determine if those projects will be let.

We mentioned last time, with our backlog expansion, that we were seeing project-related work starting to expand, and that trend is continuing. We're pleased with the increasing level of order activity in this market.

And as I mentioned, there are a number of exciting design activities going on in this market right now. Many of them are energy related, but there's also quite a few in what we'd call -- what Haynes would call traditional chemical applications.

The land-based gas turbine market totaled $21.8 million in net revenue in the second quarter, down roughly 28% from second quarter '13's $30.2 million. Volume was 1.5 million pounds, down 16% -- 16.3% from last year.

This market accounted for 19% of total revenue in the quarter. As we've mentioned previously, we felt the temporary slowdown would be coming in this market, as we shipped record volume into this market in 2012 and we had our second highest volume year in this market in 2013.

Sequentially, net revenue was up 20.4% and, more importantly, the backlog increased over 39%. Similar to the comments we made last quarter about aerospace and CPI, we can't determine if this market has bottomed, but the increase in revenue, combined with the dramatic increase in backlog, is encouraging.

This market has historically been very choppy as far as demand patterns, especially since so much of it recently seems to be tied to MRO demand patterns, but I feel our people are in touch with customers on a regular basis, and I feel confident that our plans can respond to the needs of this market. By the way, similar to what I saw on aerospace, we saw quite a bit of expedite activity associated with this market in the last quarter.

Again, due to the record levels we shipped in fiscal '12 and fiscal '13, I'm still cautious about the volume needs of this market, but I think it's fair to say I'm migrating from caution to cautious optimism. By the way, I always like updating you on new applications.

And as you may recall, we're finally able to give you some details about customers and applications in the shareholder letter about some aerospace wins in HAYNES 282. I'm not able to talk through the specifics for nondisclosures, but in the second quarter, we received orders in the land-based gas turbine market from 2 OEMs for new parts utilizing HAYNES 282 for evaluation.

They're not yet production units, but I think, as most of you realize, it's a pretty good move when you come off of the concept or the design boards. And now we've moved into prototype stage.

It's pretty much that first stage to winning these things for qualification.

Finally, on our other markets, we had net revenues of $11.4 million in the second quarter of 2014, down 5.4% from the second quarter of last year. This market accounted for 10% of our revenue in the quarter.

And the backlog increased over 49%. Activity in this market has increased in industrial applications for heat and corrosion, our key elements in the processing.

And just to give you some examples, that's things like surface coatings, heat-treating equipment, some overlay applications. Those are where we're beginning to see some of the driving force in this area.

Turning to our capital projects. On our tubular products expansion, we've commissioned a new heat-treating equipment, and we're currently installing and commissioning some of the new inspection lines.

Specifically, we've got them functioning mechanically and electrically, so now we're running and setting standards for calibration, as well as round robin testing with existing equipment. Again, a lot of calibration or test to go into some of this test equipment we've got.

We've completed the foundation work on the main 2 cold working mills and started the mechanical installations. Also, as we mentioned when we outlined this project, we relocated quite a bit of the equipment in this facility to create a safer, more efficient material flow.

We still expect to commission this equipment by the end of the calendar year. The construction, equipment relocation, commissioning and calibration work is difficult when we're running a plant so close to capacity.

And it has impacted our volumes, but I feel like we're managing the process well, and we'll continue to grind through this process.

On our flat roll expansion, it's also running well. We've completed the installation of the new furnaces in the hot working area.

We're now starting the installation of the new heat-treating furnace in our plate facility, along with the necessary support, equipment, instrumentation and controls. Like the tubular project, we expect to have this equipment commissioned by the end of the calendar year.

Many of the pieces of equipment, like the shape correction equipment and the inspection equipment, are already up and running, and we're experiencing the benefits of those pieces of equipment right now. But the real benefits of this project will occur once we see demand return in the marketplace.

Finally, on our new IT system, we're up and running in Europe, and the cutover of the financial and maintenance and some of the other support areas here in the U.S. went well during the quarter.

Originally, we had planned to cut over our North American distribution operations on May 1. However, with the increases we're seeing in activity and the increases we expect to see in activity, especially through our distribution centers, some of that transactional activity, as the marketplace returns, typically can get very brisk, especially towards the end of the months.

What we're going to do is we're going to push this out and implement the North American distribution areas towards the end of the year. As a result, instead of completing this project by the end of this year, we expect to complete it in mid-2015.

And just reminding you, this system, for instance, cuts us from 3 different IT platforms in Europe, none of which connected into the system here in the United States. And we also had multiple systems here in North America, so we'll finally be getting the entire company onto a single platform.

It's a large and it's a necessary task. This, we feel, is going to improve our communications, customer service, response times, our analytics, working capital management, just a myriad of things that we think are necessary for Haynes to be world-class worldwide.

With that, let me turn the call over to Dan for more details on the financials.

Thank you, Mark. Business conditions, while they remain challenging, appear to be improving.

The backlog increased 12.3% during the quarter, pounds shipped increased over 30%, and net sales increased 23.1% sequentially from the first quarter. Our gross margin dollars increased by $3.8 million compared to Q1, with the gross margin percentage expanding from 5.6% of net revenues in Q1 up to 7.9% in Q2.

While this is better, many factors continued to compress our gross margins this quarter. The largest item impacting our gross margins was competitive pricing, which continues to be a significant issue.

While we have announced price increases that are expected to help expand gross margins in the second half of the fiscal year, project shipping out of our backlog contains competitively priced orders that continue to pressure our gross margins.

Recently, increased volumes processed through the mill have resulted in improved absorption of fixed costs. However, we are still impacted from prior periods, where we had lower production levels and unfavorable absorption.

A portion of those higher costs have yet to flush through the P&L as the inventory sells.

This quarter, higher spending for utilities during the winter were significant, especially in natural gas. Spending for natural gas was high due to high NYMEX market prices, but, more significantly, for problems with the pipeline, which caused a very high rate at the city gate.

Some of this issue was mitigated, as the company has a portion of its natural gas usage on a contract, a fixed rate. However, the portion not fixed resulted in higher spending in the quarter, slightly over $1 million that hits our cost of goods sold as the produced inventory sells.

The actual P&L impact on this quarter was $225,000 pretax, $150,000 aftertax, or $0.01 on the fully diluted earnings per share.

As we've previously mentioned, the decline in the market price of nickel over the course of fiscal year 2013 and the beginning of fiscal year 2014, which causes customers to delay orders for the company's products, contributed to the overall decline in our volumes. This resulted in a FIFO lag, where we are selling off higher-cost inventory against sales at lower nickel prices.

In the latter part of the second quarter of fiscal 2014, the market price of nickel began increasing. While the FIFO lag still unfavorably impacted our margins in the second quarter, it was to a lesser extent than in prior quarters.

Also impacting margins in the second quarter, and also to a lesser extent than the first quarter, was a fixed-price nickel agreement pursuant to which the company agreed to purchase a portion of its nickel supply at a fixed price. Subsequent to March 31, 2014, the company canceled the fixed-price component of the agreement on volumes not tied to customer fixed-price contracts.

Overall, as was mentioned in the press release, in the second quarter, we saw volumes increase, nickel prices move up, backlogs grow and lead times extend, and we remain cautiously optimistic about the continuation of these trends.

Related to the tax charge, a state tax law that was passed at the end of the quarter reduced the future tax rate in the state of Indiana. While this is expected to be a future benefit, it required us to lower the value of our deferred tax asset, which resulted in a onetime noncash charge to tax expense during the quarter.

This tax charge was $0.03 per fully diluted earnings per share.

Backlog was $202.3 million at March 31, 2014, an increase of $22.1 million, or 12.3%, from the $180.2 million at December 31, 2013. Management believes that the improved order entry volume is due to the customers beginning the process of increasing their stock levels to accommodate the demand in the company's end markets, along with the rise in the nickel market prices.

The backlog for all the company's major markets increased in the second quarter of fiscal 2014. The April 30, 2014, backlog increased just slightly, to $203.6 million.

Capital spending. A key element of the company's business strategy is to capitalize on strategic equipment investments.

Capital spending in the first 6 months of fiscal 2014 was $24.3 million, and the forecast for capital spending in fiscal 2014 remains at $57 million. The actual and planned capital investments of approximately $125 million over the 3-year period from fiscal '12 through '14 are expected to allow the company to increase capacity, enhance product quality, reduce costs and improve working capital management.

These are significant investments, and we are very focused on the execution and completion of these projects. We remain committed to realizing the expected shareholder return on these investments.

Cash flow from operations for the first 6 months of fiscal 2014 was $22.6 million. Our controllable working capital was $254 million at March 31, 2014, a decrease of $19.4 million, or a 7.1% decrease so far this fiscal year.

However, our inventory is beginning to increase in response to our higher backlog, which is expected to continue to reduce our cash balance. Our cash balance at March 31, 2014, was $62.1 million.

Even with our significant investments and capital spending, our cash position remains strong, and our revolver balance remains at 0 borrowings.

Outlook. Revenue and earnings for the third quarter of fiscal 2014 are expected to improve from those of the second quarter of fiscal 2014.

Business conditions appear to be improving, and the company may generate net income in the third quarter. Management remains cautiously optimistic about the continuation of these favorable market trends.

And in summary, the solidifying demand appears to be signaling the end of the relatively long period of destocking. However, the extent and pace of the recovery still lacks visibility.

We continue to focus on our -- on growing our net revenues and regaining the price and margin levels that experienced compression during the downturn.

And with that, I'll now turn the discussion back over to Mark.

Thanks, Dan. Second quarter showed signs of improvement in demand across all of our end markets.

We're a long way from where we want to be and where we need to be. We're still processing some of the lower value -- I guess, the better way to say it might say, it would be lower-priced orders that were booked during the downturn, as Dan had mentioned to you.

And we're still clearing some cost inefficiencies of that period when we were operating well below current levels. When comparing to the past 5 or 6 conference call, I think this is the first time I'm able to report to you that we had sequential improvements in net revenues and backlog expansion in each of our target market areas.

We know there will be ups and downs as we move forward, but we're already in the process of managing and upgrading the product mix, ramping up production in our manufacturing facilities, moving our expansion and upgrade projects closer to completion, and we feel confident in our market position with our customers.

With that, let's open the call to your questions.

So my first question is, if we look at the transactional orders, and I note that you mentioned there was a pickup there, first, I'm curious if there's specific markets or whether it was broad-based and if there is a way to maybe quantify either from a sequential or a year-over-year kind of improvement that we can kind of talk about.

Well, we've been watching the transactional business very carefully. And the pickup, as far as the market goes, I think was a little more on the aerospace land-based gas turbine side, but it was across all the markets, so I would broadly say it was across all the markets.

And typically, our transactional business is around 1/3 of our business. And this quarter, it was higher.

It was not quite 40%, not that high, but it was higher than the 33%. So we are seeing that, and that's a sign of restocking inventory in some of these markets.

So we view that as pretty positive sign, as well as picking up the price of the current market prices of nickel is a positive sign for us as well.

Yes, and, Ed, if I can add to that just to give you a little more color on it. In March, transaction activity picked up.

I'll say, the order entry activity in March was the strongest of the months in the quarter. And again, qualitatively, a lot of it was people were now talking about, "Holy smokes!

We got to beat the nickel." So we started to see that pick up pretty dramatically in March.

And what I'll say to you, though, is then as we moved into April, we then saw that -- we saw that pull back. So it's a little bit of a -- it's a very dynamic marketplace right now as far as where people are going with the transactional activity.

How much would you attribute to maybe a catch-up because of weather kind of in the first part of the year, and March was more of a catch-up, and then maybe just a moderation in April? Or is it more related to -- and I guess this is kind of the million-dollar question, but is it related to the wait-and-see and let's see where nickel goes, maybe it got ahead of itself?

We've lost about 3 production days in January, but -- due to the weather. And I'm answering your question kind of from the point of view of Haynes.

But, I mean, Dan and I were talking about this. We didn't want to talk a lot about weather because, think about it, a year ago, we had flood here.

So I mean, we're kind of in the middle part of the country in Central Indiana. We're going to have weather issues.

So we don't really talk a heck of a lot about the weather. And with respect to customers, I don't think weather really impacted them that dramatically at all.

We had a couple customers up in the Northeast that had to shut down for a day or 2. For us, I would've liked to have seen us maybe ship some more material in the first quarter.

But like it always is when we're in this type of a situation -- remember, it's just, October, November, December, we were doing the exact opposite. We were cutting as much cost as we possibly could and building that cash position.

And then all of a sudden, we flipped the switch in probably late January, and it became, okay, let's get as much material out as possible. And we're still in that phase of ramping up, might be the best way to put it.

So it's hard for me to say anything weather related. To me, this is more about the ramping-up process, and it's a lot -- as Dan was talking to you, a lot of the profitability right now, it's -- we have to cleanse out and cycle out some of that business that was taken in that October, November, December, early January time frame.

And we got to cleanse out that cost structure from when we were clearly sub-optimizing the efficiency in the plants, taking out as much costs as we could. But clearly, you can't take out as much cost as the problems you have with absorption.

And the way we amortize our costs, we've got to cleanse that out of the system. All right?

I probably gave you more than you needed on that, but I just wanted to give you a little more background.

No, that's good color. When I think about the backlog information that you provided, and I appreciate the April 30 absolute dollar value, I'm curious, though, if you have -- and maybe it's more appropriate right now to look at it from a volume perspective.

I wonder if you have that measure. You may not, but -- and I note the March 31 volume levels, but I'm curious if you have the April 30 volume levels and if that materially changed.

It did not. You are talking about the pounds in the backlog?

Pounds in backlog, right.

Yes, it stayed consistent at about 7.5 million pounds.

Okay. And then if I look at -- you mentioned of canceling your nickel contracts?

What happened there? Is that -- how does that work?

I mean, that was a negative as we moved into the first half of the year. It looks like those may have now disappeared.

Am I misunderstanding that or...?

No. With the nickel prices moving up a bit, we had the opportunity to -- for those that were kind of above the fixed-price customer agreements, we were able to neutralize those.

So that's what we've done to kind of neutralize our position going forward, which is great. We want to be in a neutral position.

We do have some of those higher-cost items still in inventory that we will flush through in the next few quarters, but that impact of these contracts will certainly diminish in the future months as we go forward.

Did you buy a financial hedge or was it just an outright cancellation of...?

It was a cancellation through our vendor of nickel.

Okay. And then finally, I just wanted to -- strategically thinking, the consolidation that's going on in maybe your European markets with Alstom and maybe even Rolls-Royce to this point, big turbine manufacturers for you -- or customers for you.

Do you suspect or do you think that there'd be any kind of customer issues as we move forward, or how should we think about the consolidation?

No, we're positioned very well with all of them, and especially those, the ones you've mentioned. So we're -- I think we're very well positioned.

And remember, a lot of the work we do goes through sub-tier fabricators. So there might be changes and adjustments through the sub-tier fabrication supply chain, but again -- and again, this is a big reason we run our distribution facilities and we do the value-added cutting.

We're -- I think we're very well positioned all the way through those supply chains.

Mark, you talked about potentially seeing a bottom in demand, but the average selling prices are continuing to decline, and I understand some of that has to do with -- as you work through your backlog, where the prices were more competitive. But do you expect selling prices to start to firm in H2 based on the move in nickel and now that you've put through a couple of price increases?

Yes, I think, Julie, it's kind of the easy side -- I don't want to say easy, that sounds wrong. But the easy side of this business is we have to follow nickel.

So bumping prices up based on nickel, that's -- we have to do it. There's -- say, if a sales guy walks to my office and says, "Oh, let's do competitive."

No, it's nickel. That's the easy side of it.

The other side of it, it's one of the things I talk about with being a smaller mill. Our objective is to make sure that we manage our mix to our capacities and fill the mill and raise prices might be the best way to put it.

So in areas -- selective areas where we are tight on capacity, some of our premium products, especially, that's where we'll make the most aggressive price increases. What we're seeing in the marketplace as well is, even in some of the more common alloys -- we'll call them commodity, but they typically are also specialty alloys for some of the other people in the marketplace -- but we're seeing prices increasing there, so we're staying with that -- those as well.

If you look -- one more comment on it, Julie. If you take a look -- I love going back through history.

And the downside of this downturn was it was so prolonged that pricing really took a beating. Especially if you compare it to the 2009 downturn, that was quick, rip off the band-aid, pricing fell.

But then within 15 or 18 months, we started to see the order book come back, and, subsequently, we were able to start taking pricing actions. This one, we're 24 months into it, and it was kind of a death by a thousand cuts.

Pricing fell more in this downturn than it did in 2009, even though nickel didn't fall as far in this downturn as it did in 2009. So the road back, it typically takes us on the order of 4 quarters to keep pushing these things through and getting the pricing back.

And that's typical. You just grind it back upwards.

You keep grinding that price number back upwards.

Okay. And then where are you on capacity utilization across your businesses?

Again, I'd say right now, in the premium melt area -- and when I say premium melt, that's the vacuum melting area, that's pretty close to capacity. Air melt is -- gosh, I think last time we talked to you, it was probably in that order of 50% or 55%.

That's closer to 70% right now. The tubing facility, obviously, is full, and we've complicated things with the CapEx work we're doing down there, so we've got people working very hard down there, but that's full.

Wire is probably running 50% to 60% capacity, a lot of available capacity there. We're booking some nice orders in the wire area; some new applications, too, which is very exciting.

And then if you look at our sheet operations, plate operations, those are starting to fill, so we're probably in that 75% of capacity right now as you move into the finishing operations. And a lot of that is -- and you can see if you take a look at our material breakdown right now, you can see we've increased the whip.

So that capacity is up. I think we're moving -- bumping up against some capacity issues in that area, because we're trying to reposition some material as we ramp up and try to get caught up with where demand is right now.

Okay. Okay.

And then finally, just on the aerospace destocking.

Yes.

Any more specific comments that you can provide? Is it stabilization or is it more of an acceleration?

And when do you expect shipments to more closely align with that, with build rates?

Yes, I think the wild card in that, Julie, is -- as I mentioned in my commentary, is that we did see a little bit of, holy smokes, let's get it in here now because nickel is going up. And think of what nickel has done since we spoke last, I want to say nickel was in the mid-6s when we spoke in January.

And I think, today, it was above 9.

We're 9, yes.

So that's where -- and again, we -- sometimes Dan and I are called a little conservative compared to some other people. But one of the things that goes through my mind is, yes, we've seen some good demand increases in this quarter coming through on both quarter entry and in shipments, I just want to make sure -- I need another quarter or so, like Dan is saying, to flush out the costs.

But I need another quarter or so to see how much of this was people in a purchasing mode to beat the nickel. And is it going to soften in this next quarter because they overbought?

Or are we truly at that destocking phase, that the destocking has ended and now we'll start to see that demand? I guess, me being an engineer, Julie, this is -- I've got one data point of good demand that came through this quarter.

I need to see a little bit more of that to really be able to say to you guys, yes, things are picking up and get -- and strengthening.

I just wanted to circle back to that -- the nickel contract question real quickly. So there weren't really any incremental costs associated with the cancellation or you're just, since nickel's close to $9, it's kind of a wash?

Is that the way to think about it?

Essentially, yes. They're just -- the fixed-price component and the volume commitment of those is canceled so that we're buying nickel related to that on the spot market now.

So it was -- we got a great relationship with our vendor, and we were able to do that really at no cost.

That's great. That's great.

Yes.

And then, just remind us, I mean, you guys are working your way through this capital investment process, making some great changes here. I think, eventually, you guys have kind of pointed to gross margin improvement of 200 basis points or potentially north of that.

But I got to imagine you also need a base level of revenue. Can you remind us where that -- I mean, we're -- do we need to kind of get back to a certain level where we start to see that leverage, so to speak?

Yes, we do. We need that, and you can kind of break it down between -- on the tubular side, that's not as much of an issue because we are at capacity.

We do have the customer demand. So whenever we get that product finished and all that equipment commissioned, we can start building up those volumes.

So I think we're ready to go on that side of it. However, on the flat products side, we certainly do need that demand level to return to where it was probably back in the 2012, when we made that assertion.

If it gets back into those volume levels, then we can start seeing that leverage overall, as you mentioned, 2 to maybe 4 points on our overall margin. So we're looking forward to that.

That's great. And if I may just ask one more, you certainly have been utilizing your cash for some great investments.

You still have a very healthy cash position. What are your thoughts on the utilization of that going forward now that major CapEx programs are kind of done here?

Well, I would say we're not done yet with the CapEx. We still have quite a bit more throughout the remainder of this year.

And as I mentioned in kind of my prepared remarks, we have increased inventory. And as business continues, we'll continue to increase inventory.

If you noticed on our balance sheet, our accounts payable is quite high. So you get the inventory, and it goes into accounts payable, then you start paying for it.

So we do expect that cash balance to decline over the next quarter. So beyond that, then we certainly have this discussion with our board often on capital allocation, and we'll go from there on what the next step is.

The CapEx projects that were currently under way, that's our focus. And once we get those completed and executed, then we'll take the next step.

Can you just talk a little bit about your thoughts relative to when Athens comes on for Carpenter? Will that make a more competitive environment?

Does that concern you about pricing at all? Or are those products that they'll produce there don't overlap with yours?

Yes. Carpenter specifically.

Carpenter is very complementary to Haynes. If you look at the key members in this marketplace, the -- and I'm talking the -- really, the high-temperature alloys marketplace, probably more so than anything as opposed to corrosion, but a little bit of the corrosion.

Carpenter is typically considered what's called a long products manufacturer, so bar products, ingot products, those types of products, whereas we're a flat roll manufacturer. Now the other people in the marketplace, people like Allegheny Technologies, they do both.

So something like a Carpenter and Haynes combined are similar to the capabilities of an Allegheny Technologies or similar to a Special Metals Corporation, who is a part of Precision Castparts. So the Carpenter, specifically, assets, the premium melt capabilities, that is more of a long products discussion as opposed to Haynes is really a flat products manufacturer.

We've seen from supply issues at nickel mines around the world here recently. Is there any concern that your supply might be impacted or do you feel pretty comfortable with your diversity of suppliers?

We feel pretty comfortable. But I will say, on the nickel side, we have a agreement that is a sole supplier of nickel, but we've had this relationship for quite some time, and we feel very comfortable that we'll get plenty in all the products that we need.

We certainly look at all the other products that we purchase as well. Certainly, with the issues going on in Russia, for example, we look at any products that originates out of Russia and ensuring that we have alternative sources for those.

And we've made a little change on some of the smaller items, but nothing significant, nothing that concerns us.

Yes. And just to give you a little more color on that, Chris.

I mean, if you go back to the, I'll say, the maybe 2010 or 2008 time frame, the inventories were sitting at, I want to say, 60,000 or 70,000 tons, and today they're at 260,000. And we had no disruptions in nickel supply there.

Our relationship with our nickel supplier is excellent, and they've really done some great things for us. So if -- history is, I think, a good element to look at in something like this and, again, we've never had disruptions.

And then secondly, what are the lead times on your primary flat roll products? And can you give us some color on how they've trended over the last few quarters?

Yes. They're -- and it goes back to just kind of the capacity utilization question that was asked earlier.

The lead time itself or manufacturing time for, let's say, a traditional light-gauge sheet product might take 12 weeks of manufacturing. But right now, if that's a vacuum-melted product, you might be out 26 weeks.

Now the thing about Haynes, to be cognizant of is, we are always producing to stock inventory, not just specific made-to-order inventories. So if you are a guy that comes in off the street with an odd size or a made-to-order inventory size item, you might be in that -- I'm sorry, but we're quoting you 26 weeks.

However, if you're ordering common sizes, remember, Haynes is stocking common sizes that will sell to a myriad of combustor manufacturers or a myriad of other manufacturers of other products. So that's really the distribution system kind of cushions that blow.

And like I said, we have certain market inventories we're producing all the time based on the demand that we're seeing in the end use area.

Thank you, Christine. Thanks to everybody for joining us today.

We appreciate your time. We appreciate your support of Haynes.

The marketplace does appear to be strengthening. As Dan had mentioned and I've mentioned, we still have some cost items we have to flow through, as well as some lower-value pricing levels to flow through.

We feel real good. As I mentioned, we feel real good about the fact that we saw sequential revenues increase and sequential backlogs increase from first quarter to second, but we're still very cautious about the -- where we see the business going.

We're very pleased with where we are right now as far as the slope of things. We've got a lot of things we still have to get done to be -- to get back to where we want to be.

But again, right now, we're very pleased with the direction of the end markets. So thanks very much for your time.

We'll look forward to updating you next quarter.