UNIVERSAL STAINLESS & ALLOY PRODUCTS INC - FORM 8-K - EX-99.1 - PRESS RELEASE

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8-K - FORM 8-K - UNIVERSAL STAINLESS & ALLOY PRODUCTS INC	d435130d8k.htm

Exhibit 99.1

LOGO


CONTACTS:	Dennis Oates	Douglas McSorley	June Filingeri
	Chairman,	VP Finance, CFO	President
	President and CEO	and Treasurer	Comm-Partners LLC
	(412) 257-7609	(412) 257-7606	(203) 972-0186

FOR IMMEDIATE RELEASE

UNIVERSAL STAINLESS REPORTS CORRECTION TO PREVIOUSLY REPORTED

THIRD QUARTER 2012 RESULTS

BRIDGEVILLE, PA, November 5, 2012 – 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 provied 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.

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