UNIVERSAL STAINLESS & ALLOY PRODUCTS INC false 0000931584 0000931584 2022-07-27 2022-07-27 0000931584 us-gaap:CommonStockMember 2022-07-27 2022-07-27 0000931584 us-gaap:PreferredStockMember 2022-07-27 2022-07-27





Washington, D.C. 20549







Pursuant to Section 13 or 15(d)

of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): July 27, 2022



Universal Stainless & Alloy Products, Inc.

(Exact name of registrant as specified in its charter)




Delaware   001-39467   25-1724540

(State or other jurisdiction

of incorporation)



File Number)


(IRS Employer

Identification No.)


600 Mayer Street, Bridgeville, Pennsylvania   15017
(Address of principal executive offices)   (Zip code)

Registrant’s telephone number, including area code: (412) 257-7600



Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2.):


Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)


Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)


Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))


Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Exchange Act:


Title of Each Class




Name of Each Exchange

on Which Registered

Common Stock, par value $0.001 per share   USAP   The Nasdaq Stock Market, LLC
Preferred Stock Purchase Rights     The Nasdaq Stock Market, LLC

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐




Item 2.02.

Results of Operations and Financial Condition.

On July 27, 2022, Universal Stainless & Alloy Products, Inc. (the “Company”) issued a press release regarding its results for the quarter ended June 30, 2022. A copy of the press release is attached hereto as Exhibit 99.1.

The information in Item 2.02 of this Current Report on Form 8-K, including the attached press release regarding the Company’s results for the quarter ended June 30, 2022, shall not be deemed “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, except as shall be expressly set forth by specific reference in such a filing.


Item 9.01.

Financial Statements and Exhibits.





  99.1    Press Release dated July 27, 2022.
  104    Cover Page Interactive Data File (embedded within the Inline XBRL document).


Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.



/s/ Steven V. DiTommaso

  Steven V. DiTommaso
  Vice President and Chief Financial Officer

Dated: July 27, 2022


Exhibit 99.1




CONTACTS:   Dennis M. Oates    Steven V. DiTommaso    June Filingeri
  Chairman,    Vice President and    President
  President and CEO    Chief Financial Officer    Comm-Partners LLC
  (412) 257-7609    (412) 257-7661    (203) 972-0186




Quarter-end Backlog reaches new record of $222.7 million, up 10% from record Q1 2022, up 125% from Q2 2021



Q2 2022 Sales up 10% sequentially to $52.2 million; Premium alloy sales are 17% of total sales



Q2 2022 Gross margin rises to 9.1% of sales. Gross margin is 12.6% of sales excluding AMJP grant benefit and charges incurred from liquid metal spill



Q2 2022 Net loss narrows to $1.4 million, or $0.16 per diluted share; includes $0.16 of net expense from the AMJP grant benefit and liquid metal spill



Q2 2022 EBITDA increases to $4.3 million; Adjusted EBITDA increases to $6.4 million

BRIDGEVILLE, PA, July 27, 2022 – Universal Stainless & Alloy Products, Inc. (Nasdaq: USAP) today reported that net sales for the second quarter of 2022 were $52.2 million, an increase of 9.7% from $47.6 million in the first quarter of 2022, and 35.5% higher than net sales of $38.5 million in the second quarter of 2021. For the first six months of 2022, sales reached $99.7 million, an increase of 32.0% from $75.5 million recorded in the same period of 2021.

Sales of premium alloys in the second quarter of 2022 totaled $8.8 million, or 16.9% of sales. That compares with $8.9 million, or 18.8% of sales, in the first quarter of 2022, and $5.9 million, or 15.3% of sales, in the second quarter of 2021. Premium alloy sales for the first six months of 2022 increased 31.6% to $17.7 million versus the first six months of 2021.

As previously reported in early April, a liquid metal spill occurred during operations at the Company’s Bridgeville Electric Arc Melting facility at the beginning of the second quarter. The spill was caused by a breakthrough at the bottom of a furnace shell. Clean up and repair caused approximately seven weeks of down time at the melt operation. While all other operations continued to function as normal, the spill disrupted productivity throughout the plant due to its impact on production flow.

Chairman, President and CEO, Dennis Oates commented, “The spill presented significant challenges in the second quarter. Our team worked diligently to successfully complete clean up and repair activities and return to production consistent with our initial estimates immediately after the spill. As a result, we were able to increase sales and expand profitability in the second quarter despite the headwinds caused by the spill.”

The Company’s gross margin for the second quarter of 2022 was $4.7 million, or 9.1% of sales, and included a $1.8 million benefit related to a grant received under the Aviation Manufacturing Jobs Protection (AMJP) Program, offset by $3.6 million in charges attributed to a previously-reported liquid metal spill in April 2022. Excluding these pre-tax amounts, the gross margin for the second quarter of 2022 was $6.5 million, or 12.6% of sales. In the first quarter of 2022, the gross margin was $4.1 million, or 8.5% of sales, including a $1.1 million AMJP grant benefit. The gross margin was $2.2 million, or 5.6% of sales, in the second quarter of 2021, and included $2.1 million of fixed cost absorption charges.



Mr. Oates continued: “Aerospace demand continued to recover in the second quarter, driving our sales growth, our improving profitability and our record backlog. Specifically, our aerospace sales were up 19% from the first quarter of 2022, up 67% from the second quarter last year, and 51% higher year-to-date than the first half of 2021. Premium alloy sales, which are mainly for aerospace applications, were in line with the 2022 first quarter, and up 49% from the second quarter of 2021 and 32% higher year-to-date.

“We have exceptional growth in our backlog, which has increased each quarter in 2021 and 2022 and has reached a new record of $222.7 million. A full 26% of that backlog consisted of premium alloys.

“Profitability continued to improve in the second quarter. Gross margin returned to double digits as a percentage of sales for the first time since 2019, totaling 12.6% excluding the impacts of the AMJP grant and the liquid metal spill. This performance was achieved despite ongoing supply chain challenges, increasing inflationary pressures and staffing challenges.

“Aerospace reached 68% of sales in the second quarter. Growing traction in aerospace demand is being driven by the ramp-up in commercial airplane build rates, positive momentum in passenger travel, strong air freight activity and a healthy defense market.

“In the balance of our end markets, our power generation and oil & gas sales increased 72% and 7%, respectively, from the first quarter of 2022. Heavy equipment remains our second largest market, although sales were 11% lower sequentially as demand continues to vary quarter-to-quarter. General industrial market sales were also lower by 45% sequentially, although they are up 20% year-to-date.”

Mr. Oates concluded: “Our main priorities this quarter were to get back on track with our profitability targets and resume operations at our Bridgeville Electric Arc Melting facility where the liquid metal spill occurred. Our Melt Shop is now fully operational and we are successfully executing our plan to grow sales and improve profitability — all of which was made possible by the hard work of our team. Because of their ongoing commitment, and despite current economic uncertainty, we expect to continue to increase our sales and profitability through the second half of the year.”    

Quarterly and Year-to-Date Results of Operations

The net loss for the second quarter of 2022 was $1.4 million, or $0.16 per diluted share, compared with a net loss of $1.6 million, or $0.18 per diluted share, in the first quarter of 2022 and a net loss of $2.5 million, or $0.28 per diluted share, in the 2021 second quarter. The net impact of the liquid metal spill and AMJP grant benefit for the second quarter of 2022 is approximately $1.4 million after tax, and accounts for the entire $0.16 per diluted share loss.

The Company’s EBITDA for the second quarter of 2022 was $4.3 million while adjusted EBITDA was $6.4 million.

Managed working capital was $147.9 million at June 30, 2022 compared with $142.7 million at March 31, 2022 and $116.0 million at the end of the second quarter of 2021. The sequential increase in managed working capital from the 2022 first quarter was mainly due to increased sales and inventory values. Inventory was $149.0 million at the end of the second quarter of 2022 compared with $147.6 million at the end of the first quarter of 2022, and $120.8 million at the end of the 2021 second quarter. The increase in inventory in the most recent quarter reflects higher raw material prices and an increased mix of premium product inventory, partly offset by lower inventory levels due to the impact of the liquid metal spill on our melt activity.

Backlog (before surcharges) increased 10.3% to $222.7 million at June 30, 2022 from $201.8 million at March 31, 2022, and increased 125.1% from $98.9 million at the end of the second quarter of 2021.



The Company’s total debt at June 30, 2022 was $84.0 million, compared with $76.0 million at March 31, 2022, and $53.0 million at June 30, 2021.

Capital expenditures for the second quarter of 2022 totaled $3.0 million, compared with $2.5 million for the first quarter of 2022, and $1.8 million in the second quarter of 2021. The Company expects capital expenditures in the second half of 2022 to increase compared to the first half, as we complete projects that were delayed due to parts availability and other supply chain challenges.

Conference Call and Webcast

The Company has scheduled a conference call for today, July 27th, at 10:00 a.m. (Eastern) to discuss second quarter 2022 results. Those wishing to listen to the live conference call via telephone should click here to pre-register for the call and obtain a dial-in number and personal PIN number. A simultaneous webcast will be available on the Company’s website at www.univstainless.com, and thereafter archived on the website through the end of the third quarter of 2022.

About Universal Stainless & Alloy Products, Inc.

Universal Stainless & Alloy Products, Inc., established in 1994 and headquartered in Bridgeville, PA, manufactures and markets semi-finished and finished specialty steels, including stainless steel, nickel alloys, tool steel and certain other alloyed steels. The Company’s products are used in a variety of industries, including aerospace, power generation, oil and gas, and heavy equipment manufacturing. 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 Company’s ability to maintain its relationships with its significant customers and market segments; the Company’s response to competitive factors in its industry that may adversely affect the market for finished products manufactured by the Company or its customers; the Company’s ability to compete successfully with domestic and foreign producers of specialty steel products and products fashioned from alternative materials; changes in overall demand for the Company’s products and the prices at which the Company is able to sell its products in the aerospace industry, from which a substantial amount of our sales is derived; the Company’s ability to develop, commercialize, market and sell new applications and new products; the receipt, pricing and timing of future customer orders; the impact of changes in the Company’s product mix on the Company’s profitability; the Company’s ability to maintain the availability of raw materials and operating supplies with acceptable pricing; the availability and pricing of electricity, natural gas and other sources of energy that the Company needs for the manufacturing of its products; risks related to property, plant and equipment, including the Company’s reliance on the continuing operation of critical manufacturing equipment; the Company’s success in timely concluding collective bargaining agreements and avoiding strikes or work stoppages; the Company’s ability to attract and retain key personnel; 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 matters; the Company’s ability to meet its debt service requirements and to comply with applicable financial covenants; risks associated with conducting business with suppliers and customers in foreign countries; public health issues, including COVID-19 and its uncertain impact on our facilities and operations and our customers and suppliers and the effectiveness of the Company’s actions taken in response to these risks; risks related to acquisitions that the Company may make; the Company’s ability to protect its information technology infrastructure against service interruptions, data corruption, cyber-based attacks or network security breaches; the impact on the Company’s effective tax rates from changes in tax rules, regulations and interpretations in the United States and other countries where it does business; 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 SEC, including the Company’s Annual Report on Form 10-K for the year ended December 31, 2021, copies of which are available from the SEC or may be obtained upon request from the Company.

Non-GAAP Financial Measures

This press release includes discussions of financial measures that have not been determined in accordance with U.S. Generally Accepted Accounting Principles (GAAP). These measures include earnings (loss) before interest, income taxes, depreciation and amortization (EBITDA) and Adjusted EBITDA. We include these measurements to enhance the understanding of our operating performance. We believe that EBITDA, considered along with net earnings (loss), is a relevant indicator of trends relating to cash generating activity of our operations. Adjusted EBITDA excludes the effect of share-based compensation expense and noted special items such as impairments and costs or income related to special events such as periods of low activity or insurance claims. We believe that excluding these costs provides a consistent comparison of the cash generating activity of our operations. We believe that EBITDA and Adjusted EBITDA are useful to investors as they facilitate a comparison of our operating performance to other companies who also use EBITDA and Adjusted EBITDA as supplemental operating measures. These non-GAAP financial measures supplement our GAAP disclosures and should not be considered an alternative to the GAAP measures. These non-GAAP measures may not be entirely comparable to similarly titled measures used by other companies due to potential differences among calculation methodologies. A reconciliation of these non-GAAP financial measures to their most directly comparable financial measure prepared in accordance with GAAP is included in the tables that follow.






(Dollars in Thousands, Except Per Share Information)




     Three months ended     Six months ended  
     June 30,     June 30,  
     2022     2021     2022     2021  

Net sales

   $ 52,156     $ 38,502     $ 99,718     $ 75,540  

Cost of products sold

     47,417       36,338       90,926       73,624  













Gross margin

     4,739       2,164       8,792       1,916  

Selling, general and administrative expenses

     5,277       5,151       10,326       10,382  













Operating loss

     (538     (2,987     (1,534     (8,466

Interest expense

     814       436       1,467       930  

Deferred financing amortization

     56       56       112       112  

Other (income) expense, net

     (39     7       (26     23  













Loss before income taxes

     (1,369     (3,486     (3,087     (9,531

Income taxes

     68       (993     (35     (2,509













Net loss

   $ (1,437   $ (2,493   $ (3,052   $ (7,022













Net loss per common share - Basic

   $ (0.16   $ (0.28   $ (0.34   $ (0.79













Net loss per common share - Diluted

   $ (0.16   $ (0.28   $ (0.34   $ (0.79













Weighted average shares of common stock outstanding:



     8,960,770       8,900,460       8,953,460       8,894,669  


     8,960,770       8,900,460       8,953,460       8,894,669  



     Three months ended      Six months ended  
     June 30,      June 30,  
Net Sales    2022      2021      2022      2021  

Service centers

   $ 36,940      $ 28,008      $ 70,193      $ 53,852  

Original equipment manufacturers

     4,182        2,785        8,886        7,580  


     6,889        5,114        11,397        8,907  


     3,601        2,282        8,289        4,494  

Conversion services and other

     544        313        953        707  













Total net sales

   $ 52,156      $ 38,502      $ 99,718      $ 75,540  













Tons shipped

     7,316        7,268        14,145        14,316  












     Three months ended      Six months ended  
     June 30,      June 30,  
Net Sales    2022      2021      2022      2021  

Specialty alloys

   $ 42,824      $ 32,295      $ 81,044      $ 61,386  

Premium alloys *

     8,788        5,894        17,721        13,447  

Conversion services and other sales

     544        313        953        707  













Total net sales

   $ 52,156      $ 38,502      $ 99,718      $ 75,540  












     Three months ended      Six months ended  
     June 30,      June 30,  
Net Sales    2022      2021      2022      2021  


   $ 35,673      $ 21,318      $ 65,775      $ 43,545  

Power generation

     2,224        1,407        3,521        2,606  

Oil & gas

     4,667        3,938        9,019        7,004  

Heavy equipment

     7,205        9,273        15,279        17,353  

General industrial, conversion services and other

     2,387        2,566        6,124        5,032  













Total net sales

   $ 52,156      $ 38,502      $ 99,718      $ 75,540  















Premium alloys represent all vacuum induction melted (VIM) products.


The majority of our products are sold to service centers rather than the ultimate end market customers. The end market information in this press release is our estimate based upon our knowledge of our customers and the grade of material sold to them, which they will in-turn sell to the ultimate end market customer.





     June 30,      December 31,  
     2022      2021  




   $ 315      $ 118  

Accounts receivable, net

     30,137        21,192  

Inventory, net

     148,977        140,684  

Other current assets

     8,931        8,567  







Total current assets

     188,360        170,561  

Property, plant and equipment, net

     158,665        159,162  

Other long-term assets

     873        909  







Total assets

   $ 347,898      $ 330,632  







Liabilities and Stockholders’ Equity


Accounts payable

   $ 30,156      $ 24,000  

Accrued employment costs

     2,652        4,303  

Current portion of long-term debt

     2,360        2,392  

Other current liabilities

     1,087        943  







Total current liabilities

     36,255        31,638  

Long-term debt, net

     81,623        66,852  

Deferred income taxes

     2,492        2,461  

Other long-term liabilities, net

     3,246        3,360  







Total liabilities

     123,616        104,311  

Stockholders’ equity

     224,282        226,321  







Total liabilities and stockholders’ equity

   $ 347,898      $ 330,632  











     Six months ended  
     June 30,  
     2022     2021  

Operating activities:


Net loss

   $ (3,052   $ (7,022

Adjustments for non-cash items:


Depreciation and amortization

     9,694       9,639  

Deferred income tax

     (52     (2,510

Share-based compensation expense

     695       581  

Changes in assets and liabilities:


Accounts receivable, net

     (8,945     (3,210

Inventory, net

     (9,054     (10,288

Accounts payable

     3,450       12,327  

Accrued employment costs

     (1,651     2,716  

Income taxes

     33       3  


     (128     (533







Net cash (used in) provided by operating activities

     (9,010     1,703  

Investing activity:


Capital expenditures

     (5,482     (4,483







Net cash used in investing activity

     (5,482     (4,483

Financing activities:


Borrowings under revolving credit facility

     64,647       56,008  

Payments on revolving credit facility

     (48,810     (45,887

Proceeds from term loan facility

     —         8,571  

Payments on term loan facility, finance leases, and notes

     (1,210     (15,497

Issuance of common stock under share-based plans

     62       118  

Payments of financing costs

     —         (539







Net cash provided by financing activities

     14,689       2,774  







Net increase (decrease) in cash

     197       (6

Cash at beginning of period

     118       164  







Cash at end of period

   $ 315     $ 158  











     Three months ended     Six months ended  
     June 30,     June 30,  
     2022     2021     2022     2021  

Net loss

   $ (1,437   $ (2,493   $ (3,052   $ (7,022

Interest expense

     814       436       1,467       930  

Income taxes

     68       (993     (35     (2,509

Depreciation and amortization

     4,823       4,805       9,694       9,639  














     4,268       1,755       8,074       1,038  

Share-based compensation expense

     286       272       695       581  

Fixed cost absorption direct charge

     1,300       2,096       1,300       4,653  

Spill costs in addition to absorption charge

     2,270       —         2,270       —    

AMJP benefit

     (1,761     —         (2,818     —    













Adjusted EBITDA

   $ 6,363     $ 4,123     $ 9,521     $ 6,272