Universal Stainless Reports EPS Of $0.04 for 2004 First Quarter
Apr 21, 2004
Universal Stainless Reports EPS Of $0.04 for 2004 First Quarter
Universal Stainless Reports EPS Of $0.04 for 2004 First Quarter
Dunkirk turns profitable and Company reports improved business outlook
BRIDGEVILLE, Pa., April 21, 2004 -- Universal Stainless & Alloy Products, Inc. (Nasdaq:USAP) today reported first quarter 2004 sales of $21.3 million and net income of $227,000, or $0.04 per diluted share. Revenues for the current quarter are at the highest level since 2002. The 2004 first quarter results represent a 45% increase over first quarter 2003 sales of $14.7 million and a strong turnaround from the net loss of $584,000, or $0.09 per diluted share, reported in the year ago period.Commenting on the results, President and CEO Mac McAninch stated: "Our first quarter results clearly indicate that we are on the road to recovery. This was our strongest quarter in the last six, and we returned to profitability company-wide. Most importantly, we are pleased to report that Dunkirk has broken through the profitability barrier."
Mr. McAninch continued: "Our total sales to forgers, OEMs and service centers increased 132%, 84% and 43%, respectively, over the first quarter of 2003, and 41%, 51% and 45% over the previous quarter. In fact, we saw strong growth in nearly every customer category compared to those prior periods. The significant growth in the 2004 first quarter was mainly driven by strong shipments of aerospace, power generation and tool steel products."
Mr. McAninch concluded: "We are entering the second quarter with a large backlog, driven by the growing momentum of economic recovery in the U.S. This momentum, combined with raw material surcharges and our recent price increases, has enhanced our ability to offer a wider range of cost-competitive products at Dunkirk Specialty Steel and will allow us to achieve further profitable growth company-wide in coming quarters."
Segment Review
In the first quarter of 2004, the Universal Stainless & Alloy Products segment had sales of $18.8 million and operating income of $401,000. This compares with sales of $12.4 million and an operating loss of $774,000 reported in the first quarter of 2003. The improvement reflected substantial increases in sales to forgers, service centers, OEMs and of reroll product to Dunkirk both sequentially and year over year.
The Dunkirk Specialty Steel segment reported record sales of $6.7 million and operating income of $34,000. This compares with sales of $4.8 million and an operating loss of $599,000 in the same period of 2003. Dunkirk's turnaround reflected an increase in profitable sales to wire redrawers, service centers and OEMs.
Business Outlook
The following statements are based on the Company's current expectations. These statements are forward-looking, and actual results may differ materially.
The Company estimates that second quarter 2004 sales will range from $25 to $29 million and that diluted EPS will range from $0.15 to $0.20. In the second quarter of 2003, sales were $16.8 million and the Company incurred a net loss per diluted share of $0.07.
The following factors were considered in developing these estimates:
-- The Company's total backlog at March 31, 2004 approximated $37
million compared to $21 million at December 31, 2003, reflecting
strength in all of the Company's niche markets.
-- The second quarter results will benefit from enhancements to
the raw material surcharge mechanism and other price increases
implemented at various times during the 2004 first quarter.
-- Sales from the Dunkirk Specialty Steel segment are expected
to approximate $8 million. This sales level will allow
further reductions in the manufacturing cost of products sold.
Webcast A simultaneous Webcast of the Company's conference call discussing the 2004 first quarter and the second quarter 2004 outlook, scheduled at 10:00 a.m. (Eastern) today, will be available on the Company's website at www.univstainless.com, and thereafter archived on the website. A telephone replay of the conference call will be available beginning at 12:00 noon (Eastern) today, continuing through April 28th. It can be accessed by dialing 706-645-9291, passcode 6459231. This is a toll call.
About Universal Stainless & Alloy Products, Inc.
Universal Stainless & Alloy Products, Inc., headquartered in Bridgeville, Pa., manufactures and markets a broad line of semi-finished and finished specialty steels, including stainless steel, tool steel and certain other alloyed steels. The Company's products are sold to original equipment manufacturers, service centers, forgers, rerollers and wire redrawers.
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, risks associated with the limited operating history of Dunkirk Specialty Steel LLC, risks associated with the receipt, pricing and timing of future customer orders, risks associated with significant fluctuations that may occur in raw material and energy prices, risks associated with the manufacturing process and production yields, risks related to property, plant and equipment and risks related to the ultimate outcome of the Company's current and future litigation matters. 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.
UNIVERSAL STAINLESS & ALLOY PRODUCTS, INC.
FINANCIAL HIGHLIGHTS
(Dollars in thousands, except per share information)
(Unaudited)
CONSOLIDATED STATEMENT OF OPERATIONS
For the Quarter Ended
March 31,
2004 2003
---- ----
Net Sales
Stainless steel $ 16,168 $ 11,196
Tool steel 3,165 1,900
High-strength low alloy steel 861 671
High-temperature alloy steel 710 517
Conversion services 332 333
Other 71 83
------- --------
Total net sales 21,307 14,700
Cost of products sold 19,344 14,680
Selling and administrative expenses 1,528 1,393
------- --------
Operating income (loss) 435 (1,373)
Interest expense (88) (95)
Other income 8 27
------- --------
Income (loss) before taxes 355 (1,441)
Income tax provision (benefit) 128 (858)
------- --------
Net income (loss) $ 227 $ (583)
======= ========
Earnings (loss) per share - Basic $ 0.04 $ (0.09)
======= ========
Earnings (loss) per share - Diluted $ 0.04 $ (0.09)
======= ========
Weighted average shares of
Common Stock outstanding
Basic 6,296,053 6,284,638
Diluted 6,336,034 6,284,638
MARKET SEGMENT INFORMATION
For the Quarter Ended
March 31,
2004 2003
---- ----
Net Sales
Service centers $ 9,906 $ 6,950
Rerollers 4,070 3,799
Forgers 3,816 1,647
Original equipment manufacturers 1,934 1,049
Wire redrawers 1,196 880
Conversion services 332 333
Other 53 42
------- --------
Total net sales $ 21,307 $ 14,700
======= ========
Tons shipped 9,087 7,413
======= ========
BUSINESS SEGMENT RESULTS
Universal Stainless & Alloy Products Segment
For the Quarter Ended
March 31,
2004 2003
---- ----
Net Sales
Stainless steel $ 10,720 $ 7,070
Tool steel 3,079 1,766
High-strength low alloy steel 413 407
High-temperature alloy steel 550 478
Conversion services 249 310
Other 46 75
------- --------
15,057 10,106
Intersegment 3,788 2,295
------- --------
Total net sales 18,845 12,401
Material cost of sales 7,602 4,396
Operation cost of sales 9,811 7,859
Selling and administrative
expenses 1,031 920
------- ---------
Operating income (loss) $ 401 $ (774)
======= ========
Dunkirk Specialty Steel Segment
For the Quarter Ended
March 31,
2004 2003
------- -------
Net Sales
Stainless steel $ 5,448 $ 4,126
Tool steel 86 134
High-strength low alloy steel 448 264
High-temperature alloy steel 160 39
Conversion services 83 23
Other 25 8
------- --------
6,250 4,594
Intersegment 495 190
------- --------
Total net sales 6,745 4,784
Material cost of sales 3,477 2,612
Operation cost of sales 2,737 2,298
Selling and administrative
expenses 497 473
------- --------
Operating income (loss) $ 34 $ (599)
======= ========
CONSOLIDATED BALANCE SHEET
(Dollars in thousands)
March 31, Dec. 31,
2004 2003
---- ----
Assets
Cash $ 512 $ 4,735
Accounts receivable, net 15,225 12,690
Inventory 28,560 22,281
Deferred taxes 1,222 1,222
Other current assets 3,006 3,063
-------- ---------
Total current assets 48,525 43,991
Property, plant & equipment, net 39,566 40,176
Other assets 747 758
-------- ---------
Total assets $ 88,838 $ 84,925
========== ==========
Liabilities and Stockholders' Equity
Accounts payable $ 9,450 $ 6,792
Bank overdrafts 541 813
Accrued employment costs 1,536 833
Current portion of long-term debt 1,931 1,944
Other current liabilities 556 195
---------- ----------
Total current liabilities 14,014 10,577
Bank revolver 668 -
Long-term debt 5,114 5,599
Deferred taxes 9,334 9,313
---------- ----------
Total liabilities 29,130 25,489
Stockholders' equity 59,708 59,436
---------- ----------
Total liabilities and stockholders'
equity $ 88,838 $ 84,925
========== ==========
CONSOLIDATED STATEMENT OF CASH FLOW DATA
For the Quarter Ended March 31,
2004 2003
Cash flow from (due to)
operating activities $ (3,989) $ 2,962
Cash flow due to investing activities (174) (79)
Cash flow due to financing activities (60) (156)
---------- ---------
Net cash flow $ (4,223) $ 3,039
========== =========
CONTACT: Universal Stainless & Alloy Products, Inc.
Richard M. Ubinger, Vice President of Finance,
Chief Financial Officer and Treasurer
(412) 257-7606
Comm-Partners LLC
June Filingeri
(203) 972-0186
