Haynes International, Inc.               800-354-0806

Haynes International, Inc.

Reconciliation of Non-GAAP Financial Measures (Unaudited)

In accordance with the SEC's Regulation G, the following provides definitions of the non-GAAP financial measures discussed during the Company's Earnings Conference Call on November 24, 2009, together with the most directly comparable financial measures calculated in accordance with GAAP, and a reconciliation of the differences between the non-GAAP financial measures disclosed and the most directly comparable financial measures calculated in accordance with GAAP.

This non-GAAP financial information should be considered supplemental to, and not as a substitute for, or superior to, financial measures calculated in accordance with GAAP. However, we believe that non-GAAP reporting, giving effect to the adjustments shown in the reconciliation contained in the attached financial statements, provides meaningful information and therefore we use it to supplement our GAAP guidance. We have chosen to provide this supplemental information to investors, analysts and other interested parties to enable them to perform additional analyses of operating results, to illustrate the results of operations giving effect to the non-GAAP adjustments shown in the reconciliations and to provide an additional measure of performance.

The Company recorded a non-cash goodwill impairment charge in the second quarter of 2009. This type of charge has not occurred frequently and the Company believes that excluding this charge will provide investors with a basis to compare the Company's core operating results in different periods without this variability.

 

Three Months Ended   Twelve Months Ended September 30,    September 30,    2008 2009   2008 2009   Reconciliation of non-GAAP net income:             Net income (loss) excluding non-cash charge for goodwill impairment $   16,308 $    (3,013)   $    62,778 $  (9,453)   Charge for goodwill impairment – –   – (43,737)   Goodwill tax benefit – –   – 868   Net income (loss) as reported $   16,308 $   (3,013)   $   62,778 $   (52,322)                 Reconciliation of non-GAAP EPS:             Earnings per share excluding non-cash charge for goodwill impairment $      1.35 $         (0.25)   $       5.22 $       (0.78)   Charge per share for goodwill impairment – –   – (3.65)   Goodwill tax benefit – –   – 0.07   Income (loss) per diluted share as reported $     1.35 $      (0.25)   $      5.22 $       (4.36)