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Universal Stainless Reports Correction to Previously Reported Third Quarter 2012 Results

Universal Stainless & Alloy Products, Inc. Logo

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

Source:Universal Stainless & Alloy Products, Inc.