SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): October 22, 2003
Universal Stainless & Alloy Products, Inc.
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(Exact name of registrant as specified in its charter)
Delaware 000-25032 25-1724540
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(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
600 Mayer Street, Bridgeville, Pennsylvania 15017
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(Address of principal executive offices) (Zip code)
Registrant's telephone number, including area code: (412) 257-7600
Item 12. Results of Operations and Financial Condition
On October 22, 2003, Universal Stainless and Alloy Products, Inc.
issued a press release regarding its earnings for the period ended September 30,
2003. A copy of the press release is attached hereto.
The information in this Current Report on Form 8-K, including the
attached press release, 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.
SIGNATURE
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.
UNIVERSAL STAINLESS & ALLOY PRODUCTS, INC.
By: /s/ Richard M. Ubinger
-------------------------------------
Vice President of Finance,
Chief Financial Officer and Treasurer
Dated: October 22, 2003
[GRAPHIC OMITTED][GRAPHIC OMITTED]
Universal Stainless & Alloy Products, Inc.
600 Mayer Street o Bridgeville, Pennsylvania 15017
CONTACTS: Richard M. Ubinger
Vice President of Finance,
Chief Financial Officer and Treasurer
(412) 257-7606
FOR IMMEDIATE RELEASE
Comm-Partners LLC
June Filingeri
(203) 972-0186
UNIVERSAL STAINLESS REPORTS THIRD QUARTER 2003 RESULTS
IN LINE WITH ITS HIGHER FORECAST
BRIDGEVILLE, PA, October 22, 2003 -- Universal Stainless & Alloy
Products, Inc. (Nasdaq: USAP) today reported third quarter 2003 sales of $18.6
million and a net loss of $121,000, or $0.02 per diluted share. This compares to
sales of $15.9 million, net income of $191,000, and diluted earnings per share
of $0.03 reported in the comparable period of 2002.
The Company noted that the third quarter 2003 results include a
$537,000 write-down of finished and semi-finished inventory at its Bridgeville
and Dunkirk operations, which will be used as scrap at its melt shop in
Bridgeville. The majority of the adjustment was made at the Company's Dunkirk
operation and was, in part, for inventory purchased in the acquisition of
Dunkirk in 2002.
Commenting on the results, President and CEO Mac McAninch stated: "We
achieved substantial improvement in the third quarter aided by a strengthening
economy, a weak dollar that made imports less attractive, and our ability to win
business in a competitive market. Third quarter sales were up 17% from last
year, up 11% from the second quarter and at their highest level since the first
half of 2002. We increased sales to each of our niche markets, with aerospace,
power generation, petrochemical and tool steel all up strongly both sequentially
and year over year, while maintaining our pricing discipline."
Mr. McAninch continued: "I am particularly pleased to report that our
Universal Stainless & Alloy Products segment returned to profitability for the
first time this year due to the increased volume. Dunkirk Specialty Steel's
operating loss, before the inventory adjustment, was in line with our earlier
expectations, despite the continued difficult pricing environment. These results
could not have been accomplished without the ongoing commitment of our
employees."
USAP REPORTS 3Q03 RESULTS IN LINE WITH HIGHER FORECAST - Page 2 -
Segment Review
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In the third quarter of 2003, the Universal Stainless & Alloy Products
segment had sales of $16.2 million and operating income of $554,000. This
compares with sales of $15.2 million and operating income of $489,000 in the
same period of 2002. The improved third quarter 2003 results mainly reflect
higher sales of non-commodity reroll products as well as substantial increases
in sales of forging and tool steel products. Increased equipment utilization due
to the higher sales level resulted in the return to profitability.
The Dunkirk Specialty Steel segment reported sales of $5.2 million for
the third quarter of 2003 and an increased operating loss of $732,000, mainly
due to the inventory adjustment of $328,000. This compares with sales of $4.0
million and an operating loss of $291,000 in the same period of 2002, which was
during its start-up phase and included the shipment of products that were
purchased as part of the Company's acquisition of Dunkirk. For the second
quarter of 2003, Dunkirk's sales were $5.4 million and its operating loss was
$374,000.
Business Outlook
----------------
The following statements are based on the Company's current expectations. These
statements are forward-looking, and actual results may differ materially.
The Company estimates that fourth quarter 2003 sales will range from
$15 to $19 million and that diluted EPS will range from a net loss of $0.05 to
breakeven. In the fourth quarter of 2002, sales were $15.9 million and the
Company incurred a net loss per diluted share of $0.01. The fourth quarter 2002
results include other income of $310,000 or $0.03 per diluted due to receipt of
import duties related to the Continued Dumping and Subsidy Act of 2000. While
the Company has applied for similar relief in 2003, it is unable to estimate the
program's impact on 2003 fourth quarter results at this time.
The following factors were considered in developing these estimates:
o The Company's total backlog approximated $18.3 million at September 30,
2003 compared to $13.3 million on June 30, 2003.
o Sales of non-commodity reroll products are expected to offset seasonal
sales declines anticipated in other markets at the Universal Stainless and
Alloy Products segment.
o Sales from the Dunkirk Specialty Steel segment are expected to approximate
$5 million in the 2003 fourth quarter, based on its September 30, 2003
backlog of $3.3 million. Despite its growing customer base, Dunkirk's sales
are likely to remain at current levels because of expected lower sales to
service centers. This is consistent with normal end-of-year buying patterns
within the service center industry, Dunkirk's main market.
USAP REPORTS 3Q03 RESULTS IN LINE WITH HIGHER FORECAST - Page 3 -
The Company also reported that it has executed an amendment to its PNC
Bank credit agreement and is in compliance with current financial covenants. In
addition, the Company has $6.5 million of borrowing capacity under its PNC
revolving line of credit.
Mr. McAninch concluded, "We have been facing challenging economic and
industry conditions for the past year, but have made steady progress. The
actions we took this quarter position us to capitalize on further economic
recovery. As the pace of the recovery quickens, we are optimistic that we will
return to profitability."
Webcast
A simultaneous Webcast of the Company's conference call discussing the
2003 third quarter and the fourth quarter outlook, scheduled at 10:00 a.m.
(Eastern) today, will be available on the Company's website at
www.univstainless.com, and thereafter archived on the website. A telephone
replay of the conference call will be available beginning at 12:00 noon
(Eastern) today, continuing through October 29th . It can be accessed by dialing
706-645-9291, passcode 2956175. This is a toll call.
About Universal Stainless & Alloy Products, Inc.
Universal Stainless & Alloy Products, Inc., headquartered in
Bridgeville, Pa., manufactures and markets a broad line of semi-finished and
finished specialty steels, including stainless steel, tool steel and certain
other alloyed steels. The Company's products are sold to original equipment
manufacturers, service centers, forgers, rerollers and wire redrawers.
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 limited operating history of Dunkirk Specialty Steel LLC,
risks associated with the Company's ability to meet its current loan covenants,
risks associated with the receipt, pricing and timing of future customer orders,
risks related to the financial viability of customers, risks associated with the
manufacturing process and production yields, and risks related to property,
plant and equipment. 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.
- FINANCIAL TABLES FOLLOW -
UNIVERSAL STAINLESS & ALLOY PRODUCTS, INC.
FINANCIAL HIGHLIGHTS
(Dollars in thousands, except per share information)
(Unaudited)
CONSOLIDATED STATEMENT OF OPERATIONS
For the Quarter Ended For the Nine-Months Ended
September 30, September 30,
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2003 2002 2003 2002
---- ---- ---- ----
Net sales $ 18,625 $ 15,919 $ 50,162 $ 54,937
Cost of products sold 17,296 14,180 47,917 46,999
Selling and administrative expenses 1,507 1,541 4,425 4,451
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Operating income (loss) (178) 198 (2,180) 3,487
Interest expense (100) (116) (289) (344)
Other income 24 39 74 101
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Income (loss) before taxes (254) 121 (2,395) 3,244
Income tax provision (benefit) (133) (70) (1,251) 1,070
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Net income (loss) $ (121) $ 191 $ (1,144) $ 2,174
========== ========== ========== =========
Earnings (loss) per share - Basic $ (0.02) $ 0.03 $ (0.18) $ 0.35
=============================== ==============================
Earnings (loss) per share - Diluted $ (0.02) $ 0.03 $ (0.18) $ 0.35
=============================== ==============================
Weighted average shares of
Common Stock outstanding
Basic 6,289,485 6,280,536 6,286,271 6,178,207
========== ========= ========== ==========
Diluted 6,298,691 6,296,895 6,290,065 6,220,909
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BUSINESS SEGMENT AND OTHER INFORMATION
Net sales
Universal Stainless & Alloy Products $ 16,168 $ 15,211 $ 43,068 $ 53,731
Dunkirk Specialty Steel 5,225 3,983 15,404 6,362
Intersegment (2,768) (3,275) (8,310) (5,156)
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Consolidated net sales $ 18,625 $ 15,919 $ 50,162 $ 54,937
========== ========= ========= =========
Operating income (loss)
Universal Stainless & Alloy Products $ 554 $ 489 $ (475) $ 4,660
Dunkirk Specialty Steel (732) (291) (1,705) (1,173)
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Total operating income (loss) (178) 198 (2,180) 3,487
Depreciation and amortization of fixed assets 745 810 2,292 2,310
Other income 24 39 74 101
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EBITDA $ 591 $ 1,047 $ 186 $ 5,898
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Tons shipped 9,599 8,637 25,658 29,625
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CONSOLIDATED BALANCE SHEET
(Dollars in thousands)
September 30, December 31,
2003 2002
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Cash $ 3,193 $ 3,308
Accounts receivable, net 13,717 11,550
Inventory 22,905 22,717
Deferred taxes 1,306 1,127
Other current assets 3,613 2,454
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Current assets 44,734 41,156
Property, plant & equipment, net 40,464 42,246
Other assets 812 642
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$ 86,010 $ 84,044
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Accounts payable $ 6,749 $ 4,190
Bank overdrafts 510 275
Accrued employment costs 1,262 1,019
Current portion of long-term debt 1,958 1,971
Other current liabilities 610 163
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Current liabilities 11,089 7,618
Long-term debt 6,082 7,502
Deferred taxes 9,157 8,123
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Total liabilities 26,328 23,243
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Stockholders' equity 59,682 60,801
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$ 86,010 $ 84,044
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CONSOLIDATED STATEMENT OF CASH FLOW DATA
For the Nine-Months Ended September 30,
2003 2002
---- ----
Cash flow from operating activities $ 1,589 $ 2,491
Cash flow due to investing activities (713) (5,160)
Cash flow due to financing activities (991) 1,161
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Net cash flow $ (115) $ (1,508)
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