Universal Stainless Reports Preliminary Third Quarter 2015 Results Including Non-Cash Goodwill Impairment Charge
Oct 16, 2015
The stock price decline since June, 2015 has caused the Company's market capitalization to fall sufficiently below book value, which necessitated an interim goodwill impairment review under generally accepted accounting principles. The impairment charge fully eliminates goodwill from the balance sheet.
The Company noted that while the non-cash goodwill impairment charge will negatively impact reported earnings for the third quarter of 2015, it does not affect the Company's cash balances, liquidity position, cash flow from operations, or tangible book value, which totaled approximately
The Company's stock price and recent operating performance reflect very challenging conditions in the specialty steel industry in 2015. The sharp and prolonged decline in the oil and gas market has led many customers to destock inventory. Customers have also delayed purchases due to the continued decline in nickel and other commodity prices in order to capture lower future prices. Additionally, downward trends in commodity prices have temporarily reduced margins because of the misalignment of surcharges with material costs of products shipped.
Chairman, President and CEO
"Even though current industry conditions remain difficult, we have started to see signs of a pick-up in demand for our products, including our premium alloys, with order entry in September up 64% from the prior two month average. While the recovery may be uneven going through the balance of the year, customers continue to point to 2016 as a year of improvement."
Third Quarter 2015 Conference Call Details:
The Company plans to report financial results for
the third quarter of 2015 on
Listeners can access the conference call live at www.univstainless.com. Please allow 5 minutes prior to the call to visit the site to download and install any necessary audio software. After the call has taken place, its archived version will be available at this web site through the end of the fourth quarter.
Forward-Looking Information Safe Harbor
Except for historical information contained herein, the statements in this release are forward-looking statements that are made pursuant to the "safe harbor" provision of the Private Securities Litigation Reform Act of 1995. Forward-looking statements involve known and unknown risks and uncertainties that may cause the Company's actual results in future periods to differ materially from forecasted results. Those risks include, among others, the concentrated nature of the Company's customer base to
date and the Company's dependence on its significant customers; the receipt, pricing and timing of future customer orders; changes in product mix; the limited number of raw material and energy suppliers and significant fluctuations that may occur in raw material and energy prices; risks related to property, plant and equipment, including the Company's reliance on the continuing operation of critical manufacturing equipment; risks associated with labor matters; the Company's ongoing requirement for continued compliance with laws and regulations, including applicable safety and environmental regulations; the ultimate outcome of the Company's current and future litigation and matters; risks related to acquisitions that the Company may make; and the impact of various economic, credit and market risk uncertainties. Many of these factors are not within the Company's
control and involve known and unknown risks and uncertainties that may cause the Company's actual results in future periods to be materially different from any future performance suggested herein. Any unfavorable change in the foregoing or other factors could have a material adverse effect on the Company's business, financial condition and results of operations. Further, the Company operates in an industry sector where securities values may be volatile and may be influenced by economic and other factors beyond the Company's control. Certain of these risks and other risks are described in the Company's filings with the
Dennis M. OatesChairman, President and CEO (412) 257-7609 Ross C. WilkinVP Finance, CFO and Treasurer (412) 257-7662 June FilingeriPresident Comm-Partners LLC(203) 972-0186
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