Universal Stainless Reports Correction to Previously Reported Third Quarter 2012 Results
Nov 5, 2012
BRIDGEVILLE, Pa., Nov. 5, 2012 (GLOBE NEWSWIRE) -- Universal Stainless & Alloy Products, Inc. (Nasdaq:USAP) reported today that it is correcting the results for the third quarter of 2012 previously reported on October 24, 2012. This was necessitated by the discovery of an incorrect customer invoice, for which a credit memo has now been issued.
The effect of this correction is that previously reported sales for the third quarter of 2012 were reduced by $0.9 million to $61.4 million from the $62.3 million originally reported. Accordingly, corrected operating income for the third quarter of 2012 is $4.7 million and corrected net income is $2.7 million or $0.38 per diluted share.
Related adjustments also have been made in the segment report for the Company's Universal Stainless & Alloy Products segment as well as in accounts receivable and other items on the balance sheet and cash flow statements.
The corrected financial tables for the third quarter of 2012 accompany this announcement. Investors are also advised to refer to the Quarterly Report on Form 10-Q for the period, which the Company expects to file on November 9, 2012.
Chairman, President and CEO Dennis Oates stated: "We are disappointed that this adjustment was necessary and we have taken immediate action to prevent this from happening again."
About Universal Stainless & Alloy Products, Inc.
Universal Stainless & Alloy Products, Inc., headquartered in Bridgeville, PA, manufactures and markets semi-finished and finished specialty steels, including stainless steel, tool steel and certain other alloyed steels. The Company's products are used in a variety of industries, including aerospace, power generation, petrochemical and heavy equipment manufacturing. Established in 1994, the Company, with its experience, technical expertise, and dedicated workforce, stands committed to providing the best quality, delivery, and service possible. More information is available at www.univstainless.com.
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 Securities and Exchange Commission (SEC) over the last 12 months, copies of which are available from the SEC or may be obtained upon request from the Company.
- CORRECTED TABLES FOLLOW -
| UNIVERSAL STAINLESS & ALLOY PRODUCTS, INC. FINANCIAL HIGHLIGHTS (Dollars in thousands, except per share information) (Unaudited) | |||||||
| CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | |||||||
| For the Quarter Ended | For the Nine-Months Ended | ||||||
| September 30, | September 30, | ||||||
| 2012 | 2011 | 2012 | 2011 | ||||
| Net Sales | |||||||
| Stainless steel | $ 48,432 | $ 54,746 | $ 160,844 | $ 149,797 | |||
| Tool steel | 4,768 | 5,407 | 15,638 | 18,376 | |||
| High-strength low alloy steel | 4,880 | 4,440 | 16,959 | 13,925 | |||
| High-temperature alloy steel | 1,930 | 1,579 | 6,099 | 5,037 | |||
| Conversion services | 967 | 935 | 3,831 | 2,945 | |||
| Scrap sales and other | 383 | 192 | 469 | 348 | |||
| Total net sales | 61,360 | 67,299 | 203,840 | 190,428 | |||
| Cost of products sold | 52,023 | 54,725 | 168,658 | 154,884 | |||
| Selling and administrative expenses | 4,685 | 5,343 | 13,531 | 12,870 | |||
| Operating income | 4,652 | 7,231 | 21,651 | 22,674 | |||
| Interest expense | (602) | (609) | (1,924) | (852) | |||
| Other income | 28 | 45 | 89 | 188 | |||
| Income before income taxes | 4,078 | 6,667 | 19,816 | 22,010 | |||
| Income tax provision | 1,333 | 2,774 | 6,280 | 8,144 | |||
| Net income | $ 2,745 | $ 3,893 | $ 13,536 | $ 13,866 | |||
| Earnings per common share — Basic | $ 0.40 | $ 0.57 | $ 1.97 | $ 2.03 | |||
| Earnings per common share — Diluted * | $ 0.38 | $ 0.55 | $ 1.86 | $ 1.97 | |||
| Weighted average shares of Common Stock outstanding | |||||||
| Basic | 6,877,915 | 6,831,048 | 6,863,564 | 6,821,944 | |||
| Diluted | 7,433,922 | 7,202,386 | 7,446,836 | 7,050,781 | |||
| MARKET SEGMENT INFORMATION | |||||||
| For the Quarter Ended | For the Nine-Months Ended | ||||||
| September 30, | September 30, | ||||||
| 2012 | 2011 | 2012 | 2011 | ||||
| Net Sales | |||||||
| Service centers | $ 36,631 | $ 35,067 | $ 120,091 | $ 98,000 | |||
| Forgers | 8,056 | 12,997 | 30,924 | 36,792 | |||
| Rerollers | 10,429 | 12,506 | 31,851 | 35,983 | |||
| Original equipment manufacturers | 4,148 | 4,518 | 12,693 | 12,844 | |||
| Wire redrawers | 746 | 1,084 | 3,981 | 3,516 | |||
| Conversion services | 967 | 935 | 3,831 | 2,945 | |||
| Scrap sales and other | 383 | 192 | 469 | 348 | |||
| Total net sales | $ 61,360 | $ 67,299 | $ 203,840 | $ 190,428 | |||
| Tons Shipped | 11,614 | 12,813 | 38,925 | 38,345 | |||
| Consolidated results include the results of the North Jackson operation, which was acquired on August 18, 2011. | |||||||
| * Diluted earnings per common share have been adjusted for interest expense on convertible notes, subsequent to the August 18, 2011 acquisition of the North Jackson operation. | |||||||
| BUSINESS SEGMENT RESULTS | ||||
| Universal Stainless & Alloy Products Segment | ||||
| For the Quarter Ended | For the Nine-Months Ended | |||
| September 30, | September 30, | |||
| 2012 | 2011 | 2012 | 2011 | |
| Net Sales | ||||
| Stainless steel | $ 30,138 | $ 34,803 | $ 98,926 | $ 94,037 |
| Tool steel | 3,703 | 5,047 | 13,560 | 17,184 |
| High-strength low alloy steel | 1,106 | 662 | 5,093 | 1,816 |
| High-temperature alloy steel | 637 | 623 | 2,125 | 2,050 |
| Conversion services | 866 | 641 | 3,476 | 2,203 |
| Scrap sales and other | 267 | 230 | 365 | 359 |
| 36,717 | 42,006 | 123,545 | 117,649 | |
| Intersegment | 16,556 | 18,554 | 51,803 | 58,512 |
| Total net sales | 53,273 | 60,560 | 175,348 | 176,161 |
| Material cost of sales | 27,548 | 31,265 | 87,527 | 92,338 |
| Operation cost of sales | 21,534 | 20,511 | 67,730 | 58,811 |
| Selling and administrative expenses | 2,996 | 4,004 | 8,648 | 8,872 |
| Operating income | $ 1,195 | $ 4,780 | $ 11,443 | $ 16,140 |
| The Universal Stainless & Alloy Products segment includes the results of the North Jackson operation from the August 18, 2011 acquisition date. | ||||
| Dunkirk Specialty Steel Segment | ||||
| For the Quarter Ended | For the Nine-Months Ended | |||
| September 30, | September 30, | |||
| 2012 | 2011 | 2012 | 2011 | |
| Net Sales | ||||
| Stainless steel | $ 18,294 | $ 19,943 | $ 61,918 | $ 55,760 |
| Tool steel | 1,065 | 360 | 2,078 | 1,192 |
| High-strength low alloy steel | 3,774 | 3,778 | 11,866 | 12,109 |
| High-temperature alloy steel | 1,293 | 956 | 3,974 | 2,987 |
| Conversion services | 101 | 294 | 355 | 742 |
| Scrap sales and other | 116 | (38) | 104 | (11) |
| 24,643 | 25,293 | 80,295 | 72,779 | |
| Intersegment | 135 | 34 | 314 | 126 |
| Total net sales | 24,778 | 25,327 | 80,609 | 72,905 |
| Material cost of sales | 14,269 | 15,847 | 47,130 | 44,864 |
| Operation cost of sales | 6,499 | 5,628 | 20,195 | 16,230 |
| Selling and administrative expenses | 1,689 | 1,339 | 4,883 | 3,998 |
| Operating income | $ 2,321 | $ 2,513 | $ 8,401 | $ 7,813 |
| CONDENSED CONSOLIDATED BALANCE SHEETS | ||
| September 30, | December 31, | |
| 2012 | 2011 | |
| Assets | ||
| Cash | $ 250 | $ 274 |
| Accounts receivable, net | 33,716 | 34,554 |
| Inventory, net | 101,580 | 85,088 |
| Deferred income taxes | 19,622 | 28,438 |
| Refundable income taxes | 1,597 | 4,844 |
| Other current assets | 2,368 | 2,198 |
| Total current assets | 159,133 | 155,396 |
| Property, plant and equipment, net | 205,005 | 183,148 |
| Goodwill | 20,268 | 20,479 |
| Other long-term assets | 2,563 | 2,649 |
| Total assets | $ 386,969 | $ 361,672 |
| Liabilities and Stockholders' Equity | ||
| Accounts payable | $ 18,473 | $ 29,912 |
| Accrued employment costs | 5,946 | 7,547 |
| Current portion of long-term debt | 750 | 3,000 |
| Other current liabilities | 1,223 | 966 |
| Total current liabilities | 26,392 | 41,425 |
| Long-term debt | 112,691 | 91,650 |
| Deferred income taxes | 51,711 | 48,291 |
| Other long-term liabilities | 172 | -- |
| Total liabilities | 190,966 | 181,366 |
| Stockholders' equity | 196,003 | 180,306 |
| Total liabilities and stockholders' equity | $ 386,969 | $ 361,672 |
| CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW | ||
| For the Nine-Months Ended | ||
| September 30, | ||
| 2012 | 2011 | |
| Operating activities: | ||
| Net income | $ 13,536 | $ 13,866 |
| Adjustments to reconcile net income to net cash provided by (used in) operating activities: | ||
| Depreciation and amortization | 9,312 | 4,801 |
| Loss on retirement of property, plant and equipment | -- | (20) |
| Deferred income taxes | 12,236 | 13,536 |
| Share-based compensation expense, net | 979 | 1,154 |
| Changes in assets and liabilities: | ||
| Accounts receivable, net | 838 | (10,262) |
| Inventory, net | (16,492) | (9,563) |
| Accounts payable | (14,661) | (6,657) |
| Accrued employment costs | (1,601) | 1,806 |
| Income taxes | 3,378 | (10,244) |
| Other, net | 571 | (286) |
| Net cash provided by (used in) operating activities | 8,096 | (1,869) |
| Investing activities: | ||
| Capital expenditures, net of amount included in accounts payable | (27,517) | (4,855) |
| Business acquisition, net of convertible notes assumed | -- | (91,298) |
| Proceeds from sale of fixed assets | -- | 20 |
| Net cash used in investing activities | (27,517) | (96,133) |
| Financing activities: | ||
| Borrowings under revolving credit facility | 100,752 | 44,200 |
| Payments on revolving credit facility | (61,961) | (8,600) |
| Payment on term loan facility | (20,000) | -- |
| Borrowings under term loan facility | -- | 40,000 |
| Debt repayments | -- | (10,823) |
| Proceeds from the issuance of Common Stock | 960 | 415 |
| Payment of deferred financing costs | (348) | (1,370) |
| Purchase of Treasury Stock | (234) | -- |
| Tax benefit from share-based payment arrangements | 228 | 75 |
| Net cash provided by financing activities | 19,397 | 63,897 |
| Net decrease in cash | (24) | (34,105) |
| Cash at beginning of period | 274 | 34,400 |
| Cash at end of period | $ 250 | $ 295 |
| Supplemental Non-Cash Investing and Financing Activities: | ||
| Capital expenditures included in accounts payable | $ 3,222 | $ 2,998 |
| Convertible notes issued as acquisition consideration | $ -- | $ 20,000 |
| Consolidated results include the results of the North Jackson operation, which was acquired on August 18, 2011. | ||
CONTACT: Dennis Oates
Chairman,
President and CEO
(412) 257-7609
Douglas McSorley
VP Finance, CFO
and Treasurer
(412) 257-7606
June Filingeri
President
Comm-Partners LLC
(203) 972-0186