EPS is $0.60 on Sales of $51.9 Million
Cash Flow From Operations in 3Q10 is $8.8 Million
Backlog is up 27% to $59 Million From End of 2Q10
BRIDGEVILLE, Pa., Oct. 27, 2010 (GLOBE NEWSWIRE) -- Universal Stainless & Alloy Products, Inc. (Nasdaq:USAP) reported today that sales for the third quarter of 2010 were $51.9 million compared with $25.3 million in the third quarter of 2009 and $51.3 million in the 2010 second quarter.
Net income for the third quarter of 2010 was $4.1 million, or $0.60 per diluted share, compared with $0.3 million, or $0.05 per diluted share, for the third quarter of 2009, and $4.2 million, or $0.61 per diluted share, for the second quarter of 2010.
The Company recorded positive cash flow from operations of $8.8 million in the third quarter of 2010 compared with $10.5 million in the third quarter of 2009. Cash flow from operations in 2010 totaled $4.9 million year to date. Capital expenditures for the 2010 third quarter were $1.7 million. At September 30, 2010, the Company had cash of $41.2 million and total debt of $11.5 million.
The Company noted that total shipment volume for the third quarter of 2010 remained level sequentially, while it was double the volume of the same quarter a year ago. Compared with the second quarter of 2010, volume shipped to the aerospace market increased 24%, while petrochemical volume was level, and volumes shipped to the power generation and service center plate markets were down 6% and 12%, respectively.
President and CEO Dennis Oates commented: "Third quarter results were consistent with our expectation, with sales very modestly ahead of the strong second quarter. Our consolidated operating margin remained strong at 12.2% of sales, despite the rise in nickel prices. The operational improvements achieved are continuing to drive lower operating costs, higher yields and improved inventory turns.
"Our third quarter sales benefited from continued positive aerospace market momentum and steady oil and gas volume. Power generation demand remained low as reflected in our sales to forgers with recovery still expected in 2011. The restocking phase that drove substantial growth in service center plate in the first half of the year has been completed, although demand is expected to remain stable."
Mr. Oates concluded: "Our backlog grew 27% in the third quarter, totaling $59 million compared with $46 million at the end of the second quarter of 2010, with delivery dates extending into 2011. Current shipment schedules for the fourth quarter point towards a sales level in line with the third quarter."
For the third quarter of 2010, the Universal Stainless & Alloy Products segment had sales of $46.2 million and operating income of $4.4 million, yielding an operating margin of 9.4% of sales. This compares with sales of $21.7 million and operating income of $0.1 million, or 0.3% of sales, in the third quarter of 2009. In the second quarter of 2010, sales were $49.7 million and operating income was $6.8 million, or 13.7% of sales.
Segment sales rose 113% from the third quarter of 2009 on a 119% increase in tons shipped mainly due to substantially higher shipments to rerollers and service centers. Segment sales decreased 7% from the second quarter of 2010 on a 3% decrease in tons shipped with higher shipments to rerollers and OEMs offset by lower shipments to forgers and service centers.
The Dunkirk Specialty Steel segment recorded sales of $16.8 million and operating income of $1.4 million for the third quarter of 2010, yielding an operating margin of 8.0% of sales. This compares with sales in the third quarter of 2009 of $8.5 million and operating income of $0.4 million, or 4.7% of sales. In the second quarter of 2010, sales were $13.9 million and operating income was $1.3 million, or 9.2% of sales.
Dunkirk's sales increased 98% from the third quarter of 2009 on a 31% increase in tons shipped due to a doubling of shipments to service centers and higher selling prices. Dunkirk's sales increased 21% from the second quarter of 2010 on a 2% increase in tons shipped, mainly due to higher shipments to service centers and redrawers and higher selling prices.
A simultaneous webcast of the Company's conference call discussing the third quarter of 2010, scheduled at 10:00 a.m. (Eastern) today, will be available on the Company's website at , and thereafter archived on the website through the end of the fourth quarter of 2010.
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, in a wide variety of grades, widths and gauges to customer specifications. The Company's products are sold to rerollers, forgers, service centers, original equipment manufacturers and wire redrawers for use in a variety of industries, including aerospace, power generation, petrochemical and heavy equipment manufacturing. Our specialty bar facilities have one of the broadest and diverse size range and product capabilities in the industry. Established in 1994, our experience, technical expertise, and dedicated workforce stand 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, 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, labor 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 and regulatory matters. The Company's actual results in future periods also may be impacted by various economic and market risk and uncertainties, many of which are 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.
UNIVERSAL STAINLESS & ALLOY PRODUCTS, INC.
(Dollars in thousands, except per share information)
CONTACT: Universal Stainless & Alloy Products, Inc. Dennis Oates, Chairman, President and CEO (412) 257-7609 Douglas McSorley, VP Finance, CFO and Treasurer (412) 257-7606 Comm-Partners LLC June Filingeri, President (203) 972-0186