Q1 2020 Sales total $58.5 million; Aerospace sales rise 12.7% sequentially
Q1 2020 Net Loss of $1.4 million, or $0.16 per diluted shareEBITDA totals $4.0 million in Q1 2020Quarter-end Backlog of $110.7 million versus $119.1 million at end of Q4 2019BRIDGEVILLE, Pa., April 22, 2020 (GLOBE NEWSWIRE) — Universal Stainless & Alloy Products, Inc. (Nasdaq: USAP) today reported that net sales for the first quarter of 2020 were $58.5 million, an increase of 6.0% from $55.2 million in the fourth quarter of 2019, and 2.9% lower than $60.3 million in the first quarter of 2019.Chairman, President and CEO Dennis Oates commented: “Amidst growing dislocation in several of our end markets, there were some bright spots in our top-line performance in the first quarter with net sales up 6.0% from the 2019 fourth quarter along with 12.7% sequential growth in our aerospace market sales. Additionally, tool steel sales continued to recover, increasing 30.0% from the fourth quarter of 2019. These positive factors offset sequentially lower power generation and oil and gas sales. We concluded the quarter with backlog at $110.7 million.“We have been able to keep our plants operational while we work through our backlog, however the coronavirus has presented substantial challenges which negatively impacted the efficiency of our operations and our gross margin. The Company expects the significance of the pandemic to be dictated by its duration and the impact of actions taken by governmental entities and others in response.“We have initiated cost-cutting actions and operating plans to strengthen liquidity and results of operations. Above all, we are committed to the health and well-being of our employees – without their continued dedication our progress would not be possible.”COVID-19 Response SummaryEach of the Company’s facilities is considered to be an essential operation and remains operational in accordance with the laws of the states in which the facilities are located. The Company continues to monitor the pandemic’s impact on the markets the Company serves, such as the aerospace and oil & gas markets.While the Company expects the effects of the pandemic and the related responses to negatively impact its results of operations, cash flows and financial position, the uncertainty over the duration and severity of the economic and operational impacts of COVID-19 means the Company cannot reasonably estimate the related impacts at this time. Paycheck Protection Program FundingThe Company has entered into a term note in a principal amount of $10.0 million pursuant to the Paycheck Protection Program under the Coronavirus Aid, Relief, and Economic Security Act. Receipt of these funds on April 17, 2020 has enhanced the Company’s financial flexibility and further strengthened its liquidity position.Quarterly Results of OperationsSales of premium alloys totaled $7.7 million, or 13.1% of sales, in the first quarter of 2020, compared with $7.4 million, or 13.4% of sales, in the fourth quarter of 2019, and $9.4 million, or 15.6% of sales, in the first quarter of 2019. Premium alloy sales are substantially driven by the aerospace market. Challenges from the aerospace market have been influenced by the Boeing 737 Max production situation, however going forward these challenges are severely exacerbated by the drop off in global air travel in response to COVID-19. Accordingly, we expect our customers to take a conservative approach on order entry.The Company’s gross margin for the first quarter of 2020 was 8.4% of sales, compared with 10.6% of sales in the fourth quarter of 2019, and 12.2% of sales in the first quarter of 2019. Selling, general and administrative expenses were $5.9 million, or 10.1% of sales, in the first quarter of 2020, compared with $5.3 million, or 9.5% of sales, in the fourth quarter of 2019, and $5.0 million, or 8.2% of sales, in the first quarter of 2019.The net loss for the first quarter of 2020 was $1.4 million, or $0.16 per diluted share, compared with net income of $0.2 million, or $0.02 per diluted share, in the fourth quarter of 2019, and $1.2 million, or $0.14 per diluted share, in the first quarter of 2019.The Company’s EBITDA for the first quarter of 2020 was $4.0 million, compared with $5.5 million in the fourth quarter of 2019, and $7.0 million in the first quarter of 2019.Managed working capital at March 31, 2020 totaled $153.5 million, compared with $142.1 million at December 31, 2019, and $140.0 million at the end of the first quarter of 2019. The increase in managed working capital compared with the 2019 fourth quarter was driven mainly by lower accounts payable. Inventory totaled $146.8 million at the end of the first quarter of 2020, versus $147.4 million at the end of the 2019 fourth quarter.Backlog (before surcharges) at March 31, 2020 was $110.7 million, compared with $119.1 million at December 31, 2019, and $130.1 million at the end of the 2019 first quarter.The Company’s total debt at March 31, 2020 was $76.3 million, compared with $64.3 million at December 31, 2019, and $65.4 million at the end of the first quarter of 2019. Capital expenditures for the first quarter of 2020 totaled $4.0 million, compared with $4.0 million in the fourth quarter of 2019, and $5.6 million in the first quarter of 2019.Chairman, President and CEO Dennis Oates concluded: “Both the Company and our industry are facing unique challenges in these unprecedented times. That said, Universal is strengthened by the critical products we produce and the exceptional employees working diligently and safely in our plants every day. Our operations continue to be essential, both from the definition of the government, and to service the needs of our customers. We are committed to the safety and wellbeing of our employees and to our customers.”Conference Call and WebcastThe Company has scheduled a conference call for today, April 22nd, at 10:00 a.m. (Eastern) to discuss first quarter 2020 results. Those wishing to listen to the live conference call via telephone should dial 706-679-0668, passcode 4178768. 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 second quarter of 2020.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
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