Universal Stainless & Alloy Products (USAP) 10-Q 28 Apr 16 2016 Q1 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	3 Months Ended
	Mar. 31, 2016	Apr. 27, 2016
Document And Entity Information [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Mar. 31, 2016
Document Fiscal Year Focus	2,016
Document Fiscal Period Focus	Q1
Trading Symbol	usap
Entity Registrant Name	UNIVERSAL STAINLESS & ALLOY PRODUCTS INC
Entity Central Index Key	931,584
Current Fiscal Year End Date	--12-31
Entity Filer Category	Accelerated Filer
Entity Common Stock, Shares Outstanding		7,489,746

Consolidated Statements of Oper

Consolidated Statements of Operations - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Consolidated Statements of Operations [Abstract]
Net sales	$ 39,594	$ 55,983
Cost of products sold	38,253	50,273
Gross margin	1,341	5,710
Selling, general and administrative expenses	3,838	4,694
Operating (loss) income	(2,497)	1,016
Interest expense and other financing costs	(1,810)	(782)
Other expense, net	(53)	(44)
(Loss) income before income taxes	(4,360)	190
(Benefit) provision for income taxes	(1,920)	65
Net (loss) income	$ (2,440)	$ 125
Net (loss) income per common share - Basic	$ (0.34)	$ 0.02
Net (loss) income per common share - Diluted	$ (0.34)	$ 0.02
Weighted average shares of common stock outstanding
Basic	7,162,601	7,054,469
Diluted	7,162,601	7,093,951

Consolidated Balance Sheets

Consolidated Balance Sheets - USD ($) $ in Thousands	Mar. 31, 2016	Dec. 31, 2015
Current assets:
Cash	$ 911	$ 112
Accounts receivable (less allowance for doubtful accounts of $222 and $249, respectively)	21,921	17,683
Inventory, net	82,342	83,373
Other current assets	3,028	2,584
Total current assets	108,202	103,752
Property, plant and equipment, net	191,057	193,505
Other long-term assets	84	45
Total assets	299,343	297,302
Current liabilities:
Accounts payable	17,288	11,850
Accrued employment costs	2,251	3,256
Current portion of long-term debt	4,556	3,000
Other current liabilities	914	640
Total current liabilities	25,009	18,746
Long-term debt	72,125	72,884
Deferred income taxes	18,738	20,666
Other long-term liabilities	29	29
Total liabilities	$ 115,901	$ 112,325
Stockholders' equity:
Senior preferred stock, par value $0.001 per share; 1,980,000 shares authorized; 0 shares issued and outstanding
Common stock, par value $0.001 per share; 20,000,000 shares authorized; 7,489,746 and 7,404,193 shares issued, respectively	$ 7	$ 7
Additional paid-in capital	55,734	54,829
Retained earnings	129,991	132,431
Treasury stock, at cost; 292,855 common shares held	(2,290)	(2,290)
Total stockholders' equity	183,442	184,977
Total liabilities and stockholders' equity	$ 299,343	$ 297,302

Consolidated Balance Sheets (Pa

Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands	Mar. 31, 2016	Dec. 31, 2015
Consolidated Balance Sheets [Abstract]
Accounts receivable, allowance for doubtful accounts	$ 222	$ 249
Preferred stock, par value	$ 0.001	$ 0.001
Preferred stock, shares authorized	1,980,000	1,980,000
Preferred stock, shares issued	0	0
Preferred stock, shares outstanding	0	0
Common stock, par value	$ 0.001	$ 0.001
Common stock, shares authorized	20,000,000	20,000,000
Common stock, shares issued	7,489,746	7,404,193
Treasury stock at cost, common shares held	292,855	292,855

Consolidated Statements of Cash

Consolidated Statements of Cash Flow - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Operating Activities:
Net (loss) income	$ (2,440)	$ 125
Adjustments to reconcile net (loss) income to net cash provided by (used in) operating activities:
Depreciation and amortization	4,506	4,555
Deferred income tax	(1,928)
Write-off of deferred financing costs	768
Share-based compensation expense	405	539
Net gain on asset disposals	(389)
Changes in assets and liabilities:
Accounts receivable, net	(4,238)	(4,441)
Inventory, net	652	2,093
Accounts payable	5,438	(1,772)
Accrued employment costs	(1,005)	(2,302)
Income taxes	269	(100)
Other, net	(495)	(777)
Net cash provided by (used in) operating activities	1,543	(2,080)
Investing Activities:
Capital expenditures	(818)	(2,982)
Proceeds from sale of property, plant and equipment	1,571
Net cash provided by (used in) investing activities	753	(2,982)
Financing Activities:
Borrowings under revolving credit facility	71,323	35,312
Payments on revolving credit facility	(88,585)	(29,616)
Borrowings under term loan facility	30,000
Payments on term loan facility, capital leases, and convertible notes	(14,033)	(750)
Payments of deferred financing costs	(702)
Proceeds from the issuance of common stock	500	197
Net cash (used in) provided by financing activities	(1,497)	5,143
Net increase in cash	799	81
Cash at beginning of period	112	142
Cash at end of period	$ 911	$ 223

Nature of Business and Basis of

Nature of Business and Basis of Presentation	3 Months Ended
	Mar. 31, 2016
Nature of Business and Basis of Presentation [Abstract]
Nature of Business and Basis of Presentation	Note 1: Nature of Business and Basis of Presentation Universal Stainless & Alloy Products, Inc., and its wholly-owned subsidiaries (“Universal”, “we”, “our” or the “Company”), manufacture and market semi-finished and finished specialty steel products, including stainless steel, nickel alloys, tool steel and certain other alloyed steels. Our manufacturing process involves melting, remelting, heat treating, hot and cold rolling, forging, machining and cold drawing of semi-finished and finished specialty steels. Our products are sold to service centers, forgers, rerollers, original equipment manufacturers and wire redrawers. Our customers further process our products for use in a variety of industries, including the aerospace, power generation, oil and gas and heavy equipment manufacturing industries. We also perform conversion services on materials supplied by customers. The accompanying unaudited consolidated statements include the accounts of Universal Stainless & Alloy Products, Inc. and its subsidiaries and are prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”) for interim financial reports and the instructions for Form 10-Q and Rule 10-01 of Regulation S-X. Accordingly, certain information and footnote disclosures normally included in financial statements prepared under U.S. GAAP have been condensed or omitted pursuant to such regulations. However, we believe that the disclosures are adequate to make the information presented not misleading. These consolidated financial statements should be read in conjunction with our most recently audited financial statements and the notes thereto included in our Annual Report on Form 10-K as filed with the Securities and Exchange Commission. In the opinion of management, the accompanying financial statements include all adjustments necessary to present a fair presentation of the consolidated financial statements for the periods shown. Interim results are not necessarily indicative of the operating results for the full fiscal year or any future period. The preparation of these financial statements in conformity with U.S. GAAP requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and disclosure of contingent assets and liabilities. Actual results may differ from our estimates. The consolidated financial statements include our accounts and the accounts of our wholly–owned subsidiaries. All intercompany transactions and balances have been eliminated. Recently Issued Accounting Pronouncements The Company considers the applicability and impact of all Accounting Standard Updates (“ASUs”). Recently issued ASUs not listed below were assessed and determined to be either not applicable or are expected to have minimal impact on our consolidated financial statements. In March 2016, the Financial Accounting Standards Board (“FASB”) issued ASU 2016-09 “Compensation-Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting”. The ASU includes multiple provisions intended to simplify various aspects of the accounting for share-based payments. Excess benefits for share-based payments will be recorded as a reduction of income taxes and reflected in operating cash flows upon the adoption of this ASU, eliminating additional paid in capital pools. In addition, the guidance allows for a policy election to account for forfeitures as they occur rather than on an estimated basis. This guidance is effective for annual and interim reporting periods beginning after December 16, 2016 with early adoption permitted. We are currently evaluating the impact of this guidance on our financial statements and the timing of adoption. In February 2016, the FASB issued ASU 2016-2 “Leases (Topic 842)”. The ASU requires lessees to recognize most leases on their balance sheet as a right-of-use asset and a lease liability. For income statement purposes, the FASB retained a dual model, requiring leases to be classified as either operating or finance. The criteria for evaluating are similar to those applied in current leases accounting. This guidance is effective for annual and interim reporting periods beginning after December 15, 2018 with early adoption permitted. We are currently evaluating the impact of this guidance on our financial statements and the timing of adoption. In July 2015, the FASB issued ASU 2015-11, “Simplifying the Measureme nt of Inventory” to simplify the guidance on the subsequent measurement of inventory, excluding inventory measured using last-in, first out or the retail inventory method. Under the new standard, inventory should be at the lower of cost and net realizable value. The new accounting guidance is effective for interim and annual periods beginning after December 15, 2016 with early adoption permitted. The Company is current ly evaluating the impact of this guidance on our financial statements and the timing of adoption. In May 2014, the FASB issued ASU 2014-09 “Revenue from Contracts with Customers (Topic 606 )”. This topic converges the guidance within U.S. GAAP and International Financial Reporting Standards and supersedes Accounting Standards Codification 605, Revenue Recognition. The new standard requires companies to recognize revenue to depict the transfer of goods or services to customers in amounts that reflect the consideration to which the company expects to be entitled in exchange for those goods or services. The new standard will also result in enhanced disclosures about revenue, provide guidance for transactions that were not previously addressed comprehensively, and improve guidance for multiple-element arrangements. The new guidance is effective for annual reporting periods beginning after December 15, 2017, including interim reporting periods within that reporting period. We are currently evaluating the impact that this standard will have on our financial statements.

Net (Loss) Income Per Common Sh

Net (Loss) Income Per Common Share	3 Months Ended
	Mar. 31, 2016
Net (Loss) Income Per Common Share [Abstract]
Net (Loss) Income Per Common Share	Note 2: Net (loss) income per Common Share The following table sets forth the computation of basic and diluted net (loss) income per common share:     Three months ended  March 31,   (dollars in thousands, except per share amounts) 2016 2015   Numerator:   Net (loss) income $ (2,440) $ 125  Adjustment for interest expense on convertible notes (A) - -   Net (loss) income, as adjusted $ (2,440) $ 125   Denominator:   Weighted average number of shares of common stock outstanding 7,162,601 7,054,469  Weighted average effect of dilutive stock options and other stock compensation - 39,482   Weighted average number of shares of common stock outstanding, as adjusted 7,162,601 7,093,951   Net (loss) income per common share:   Net (loss) income per common share - Basic $ (0.34) $ 0.02   Net (loss) income per common share - Diluted $ (0.34) $ 0.02 (A) An adjustment for interest expense on convertible notes was excluded from the (loss) income per share calculation for the three months ended March 31, 2016 and 2015 as a result of the convertible notes being antidilutive. We had options to purchase 821,500 and 562,300 shares of common stock outstanding at an average price of $ 26.97 and $ 33.97 which were excluded in the computation of diluted net (loss) income per common share for the three months ended March 31, 2016 and 2015 , respectively. These outstanding options were not included in the computation of diluted net (loss) income per common share because their respective exercise prices were greater than the average ma rket price of our common stock. The calculation of diluted net (loss) income per common share for the three months ended March 31, 2016 and 2015 excluded 410,816 and 427,459 shares , respectively, for the assumed conversion of convertible notes as a result of being anti-dilutive. In addition, the calculation of diluted earnings per share for the three months ended March 31, 2016 excluded 515 shares for the assumed exercise of stock options as a result of being in a net loss position.

Inventory

Inventory	3 Months Ended
	Mar. 31, 2016
Inventory [Abstract]
Inventory	 Note 3: Inventory Our raw material and starting stock inventory is primarily comprised of ferrous and non-ferrous scrap metal and alloys such as nickel, chrome, molybdenum, cobalt and copper. Our semi-finished and finished steel products are work-in-process in various stages of production or are finished products waiting to be shipped to our customers. Operating materials are primarily comprised of forge dies and production molds and rolls that are consumed over their useful lives. During the three months ended March 31, 2016 and 2015, we amortized these operating materials in the amount of $ 379,000 and $ 540,000 , respectively. This expense is recorded as a component of cost of products sold on the consolidated statements of operations and included as a part of our total depreciation and amortization on the consolidated statements of cash flows . Inventory is stated at the lower of cost or market with cost principally determined on a weighted average cost method. Such costs include the acquisition cost for raw materials and supplies, direct labor and applied manufacturing overhead. We assess market based upon actual and estimated transactions at or around the balance sheet date. Typically, we reserve for slow-moving inventory and inventory that is being evaluated under our quality control process. The reserves are based upon management’s expected method of disposition. Inventories consisted of the following:     March 31, December 31,  (in thousands) 2016 2015   Raw materials and starting stock $ 6,456 $ 6,235  Semi-finished and finished steel products 68,852 69,907  Operating materials 8,655 8,543   Gross inventory 83,963 84,685  Inventory reserves (1,621) (1,312)   Total inventory, net $ 82,342 $ 83,373

Long-Term Debt

Long-Term Debt	3 Months Ended
	Mar. 31, 2016
Long-Term Debt [Abstract]
Long-Term Debt	Note 4: Long-Term Debt  Long-term debt consisted of the following:      March 31, December 31,  (in thousands) 2016 2015   Revolving credit facility $ 26,601 $ 44,350  Convertible notes 19,000 20,000  Term loan 29,487 12,500  Swing loan credit facility 774 287  Capital leases 1,963 -   Total debt 77,825 77,137  Less: current portion of long-term debt (4,556) (3,000)  Less: deferred financing costs (1,144) (1,253)   Long-term debt $ 72,125 $ 72,884  Credit Facility On January 21, 2016 , we entered into a new Revolving Credit, Term Loan and Security Agreement (the “Credit Agreement”) with PNC Bank, National Association, as administrative agent and co-collateral agent, Bank of America, N.A., as co-collateral agent , and PNC Capital Markets LLC, as sole lead arranger and sole bookrunner. The Credit Agreement provides for a senior secured revolving credit facility not to exceed $ 65.0 million (the “Revolving Credit Facility”) and a senior secured term loan facility (the “Term Loan”) in the amount of $ 30.0 million (together with the Revolving Credit Facility, the “Facilities”). The Credit Agreement also provides for a letter of credit sub-facility not to exceed $ 10.0 million and a swing loan sub-facility not to exceed $ 6.5 million. The Company may request to increase the maximum aggregate principal amount of borrowings under the Revolving Credit Facility by $ 25.0 million prior to January 21, 2020. The Credit Agreement replaces the previous credit agreement that was in place prior to January 21, 2016. The Company was in compliance with all applicable financial covenants set forth in the previous credit agreement as of the date of its entrance into the Credit Agreement. The Facilities, which expire upon the earlier of (i) January 21, 2021 or (ii) the date that is 90 days prior to the scheduled maturity date of the Convertible Notes (as defined below) (in either case, the “Expiration Date”), are collateralized by a first lien in substantially all of the assets of the Company and its subsidiaries, except that no real property is collateral under the Facilities other than the Company’s real property in North Jackson, Ohio. Availability under the Revolving Credit Facility is based on eligible accounts receivable and inventory. The Company is required to pay a commitment fee of 0.25% based on the daily unused portion of the Revolving Credit Facility. With respect to the Term Loan, the Company will pay quarterly installments of principal of approximately $ 1.1 million, plus accrued and unpaid interest, on the first day of each fiscal quarter beginning on April 1, 2016 . To the extent not previously paid, the Term Loan will become due and payable in full on the Expiration Date. Amounts outstanding under the Facilities, at the Company’s option, will bear interest at either a base rate or a LIBOR based rate, in either case calculated in accordance with the terms of the Credit Agreement. Interest under the Credit Agreement is payable monthly. We elected to use the LIBOR based rate for the majority of the debt outstanding under the Facilities for the three months ended March 31, 2016, which was 3.69% on our Revolving Credit Facility and 4.19 % for the Term Loan. The Credit Agreement contains customary affirmative and negative covenants. The Company also must maintain certain levels of EBITDA as outlined in the Credit Agreement. As of December 31, 2016 and as of the end of each fiscal quarter ending thereafter, the Company must maintain a fixed charge coverage ratio of not less than 1.10 to 1.0, in each case measured on a rolling four-quarter basis calculated in accordance with the terms of the Credit Agreement. For the three months e nded March 31, 2016, we paid deferred financing fees of $ 702,000 related to the Credit Agreement and wrote off $ 768,000 of fees related to the previous credit agreement. We adopted ASU 2015-3 “Simplifying the Presentation of Debt Issuance Costs” for the three months ended March 31, 2016. As a result of this guidance, deferred debt issuance costs are recorded as a reduction of debt. The December 31, 2015 balance sheet reflects the reclassification of $ 1,253,000 of deferred debt issuance costs from Other long-term assets to Long-term debt to be consistent with the presentation at March 31, 2016. Pursuant to the terms of the Credit Agreement, the Company completed the issuance of 73,207 shares of the Company’s common stock to certain directors and officers of the Company on February 2, 2016. The aggregate purchase price of the stock was $ 500,004 based on the average of the high and low reported trading prices for the Company’s common stock on The Nasdaq Stock Market on February 1, 2016. Convertible Notes In connection with the acquisition of the North Jackson facility, in August 2011, we issued $ 20.0 million in convertible notes (the “Notes”) to the sellers of the North Jackson facility as partial consideration of the acquisition. On January 21, 2016, the Company entered into Amended and Restated Convertible Notes (collectively, the “Convertible Notes”) in the aggregate principal amount of $ 20.0 million, each in favor of Gorbert Inc. (the “Holder”). The Convertible Notes amended and restated the Notes. The Company’s obligations under the Convertible Notes are collateralized by a second lien on the sa me assets of the Company that collateralize the obligations of the Company under the Facilities. The Convertible Notes mature on March 17, 2019 and the maturity date may be extended, at the Company’s option, to March 17, 2020 and further to March 17, 2021. If the Company elects to extend the maturity date of the Convertible Notes to March 17, 2020, principal payments in the aggregate of $ 2.0 million will be required on March 17, 2019. If the Company elects to extend the maturity date of the Convertible Notes further to March 17, 2021, principal payments in the aggregate of $ 2.0 million will be required on March 17, 2020. The Convertible Notes bear interest at a rate of 4.0% per year through and including August 17, 2016, a rate of 5.0% per year from August 18, 2016 through and including August 17, 2017 and a rate of 6.0% per year from and after August 18, 2017. Through and including June 18, 2017, all accrued and unpaid interest is payable semi-annually in arrears on each June 18 and December 18. After June 18, 2017, all accrued and unpaid interest is payable quarterly in arrears on each September 18, December 18, March 18 and June 18. The Holder may elect at any time on or prior to August 17, 2017 to convert all or any portion of the outstanding principal amount of the Convertible Notes which is an integral multiple of $ 100,000 . The Convertible Notes are convertible into shares of common stock and, in certain circumstances, cash, securities and/or other assets. The Convertible Notes are convertible based on an initial conversion rate of 21.2 shares of Common Stock per $ 1,000 principal amount of the Convertible Notes (equivalent to an initial conversion price of $ 47.1675 per share). The conversion rate and the conversion price associated with the Convertible Notes may be adjusted in certain circumstances. The Holder’s conversion rights will be void and no longer subject to exercise by the Holder beginning on August 17, 2017. In conjunction with the issuance of the Convertible Notes on January 21, 2016, we made principal prepayments on the Convertible Notes totaling $ 1.0 million.  Capital Leases  On February 1, 2016 and March 1, 2016, the Company entered into capital leases for equipment. The capital assets and obligations are recorded at the present value of minimum lease payments. The assets are included in Property, plant and equipment, net on the Consolidated Balance Sheet an d are depreciated over the five - year lease term. The long-term component of the capital lease obligations is included in Long-term debt and the current component is included in Current portion of long-term debt. These amounts have been excluded from the Consolidated Statement of Cash Flows as they are non-cash. The net present value of the minimum lease payments, at inception, was $2.0 million.  As of March 31, 2016, future minimum lease payments applicable to capital leases were as follows:    2016 $ 355  2017 473  2018 473  2019 473  2020 473  2021 375  Total minimum capital lease payments $ 2,622  Less amounts representing interest (659)  Present value of net minimum capital lease payments $ 1,963  Less current obligation (270)  Total long-term capital lease obligation $ 1,693   There were no capital lease obligations at December 31, 2015. For the three months ended March 31, 2016, amortization of capital lease assets was $ 33,070 , which is included in Cost of products sold in the Consolidated Statement of Operations.

Fair Value Measurement

Fair Value Measurement	3 Months Ended
	Mar. 31, 2016
Fair Value Measurement [Abstract]
Fair Value Measurement	 Note 5 : Fair Value Measurement The fair value hierarchy has three levels based on the inputs used to determine fair value, which are as follows: Level 1 — Unadjusted quoted prices available in active markets for the identical assets or liabilities at the measurement date. Level 2 — Unadjusted quoted prices in active markets for similar assets or liabilities, or unadjusted quoted prices for identical or similar assets or liabilities in markets that are not active, or inputs other than quoted prices that are observable for the asset or liability. Level 3 — Unobservable inputs that cannot be corroborated by observable market data and reflect the use of significant management judgment. These values are generally determined using pricing models for which the assumptions utilize management’s estimates of market participant assumptions. The fair value hierarchy requires the use of observable market data when available. In instances where the inputs used to measure fair value fall into different levels of the fair value hierarchy, the fair value measurement has been determined based on the lowest level input significant to the fair value measurement in its entirety. Our assessment of the significance of a particular item to the fair value measurement in its entirety requires judgment, including the consideration of inputs specific to the asset or liability. The carrying amounts of our cash, accounts receivable and accounts payable approximated fair value at March 31, 2016 and December 31, 2015 due to their short-term maturities (Level 1). The fair value of the Term Loan, Revolver and swing loans at March 31, 2016 and December 31, 2015 approximated the carrying amount as the interest rate is based upon floating short-term interest rates (Level 2). At March 31, 2016 and December 31, 2015 , the fair value of our Notes was approximately $18.4 and $ 19.2 million, respectively (Level 2). 

Commitments and Contingencies

Commitments and Contingencies	3 Months Ended
	Mar. 31, 2016
Commitments and Contingencies [Abstract]
Commitments and Contingencies	Note 6 : Commitments and Contingencies From time to time, various lawsuits and claims have been or may be asserted against us relating to the conduct of our business, including routine litigation relating to commercial and employment matters. The ultimate cost and outcome of any litigation or claim cannot be predicted with certainty. Management believes, based on information presently available, that the likelihood that the ultimate outcome of any such pending matter will have a material adverse effect on our financial condition, or liquidity or a material impact on our results of operations is remote, although the resolution of one or more of these matters may have a material adverse effect on our results of operations for the period in which the resolution occurs.

Income Taxes

Income Taxes	3 Months Ended
	Mar. 31, 2016
Income Taxes [Abstract]
Income Taxes	Note 7 : Income Taxes Management estimates the annual effective income tax rate quarterly, based on current annual forecasted results. Items unrelated to current year ordinary income are recognized entirely in the period identified as a discrete item of tax. The quarterly income tax (benefit) provision is comprised of tax on ordinary income provided at the most recent estimated annual effective tax rate, increased or decreased for the tax effect of discrete items. For the three months ended March 31, 2016 and 2015 , our estimated annual effective tax rate s applied to ordinary (losses) income were 44.0% and 34.9%, respectively. Including the effect of discrete items, our effective tax rate s for the three months ended March 31, 2016 and 2015 were 44.0% and 34.2% , respectively . The increase in the effective tax rate for the three months ended March 31, 2016 compared to the three months ended March 31, 2015 is due to the inclusion of the R&D credit in the calculation of the full year estimated effective tax rate for 2016 as a result of the PATH Act which made the R&D credit permanent in the fourth quarter of 2015.

Nature of Business and Basis 13

Nature of Business and Basis of Presentation (Policies)	3 Months Ended
	Mar. 31, 2016
Nature of Business and Basis of Presentation [Abstract]
Basis of Presentation	The accompanying unaudited consolidated statements include the accounts of Universal Stainless & Alloy Products, Inc. and its subsidiaries and are prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”) for interim financial reports and the instructions for Form 10-Q and Rule 10-01 of Regulation S-X. Accordingly, certain information and footnote disclosures normally included in financial statements prepared under U.S. GAAP have been condensed or omitted pursuant to such regulations. However, we believe that the disclosures are adequate to make the information presented not misleading. These consolidated financial statements should be read in conjunction with our most recently audited financial statements and the notes thereto included in our Annual Report on Form 10-K as filed with the Securities and Exchange Commission. In the opinion of management, the accompanying financial statements include all adjustments necessary to present a fair presentation of the consolidated financial statements for the periods shown. Interim results are not necessarily indicative of the operating results for the full fiscal year or any future period. The preparation of these financial statements in conformity with U.S. GAAP requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and disclosure of contingent assets and liabilities. Actual results may differ from our estimates. The consolidated financial statements include our accounts and the accounts of our wholly–owned subsidiaries. All intercompany transactions and balances have been eliminated.
Recently Issued Accounting Pronouncements	Recently Issued Accounting Pronouncements The Company considers the applicability and impact of all Accounting Standard Updates (“ASUs”). Recently issued ASUs not listed below were assessed and determined to be either not applicable or are expected to have minimal impact on our consolidated financial statements. In March 2016, the Financial Accounting Standards Board (“FASB”) issued ASU 2016-09 “Compensation-Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting”. The ASU includes multiple provisions intended to simplify various aspects of the accounting for share-based payments. Excess benefits for share-based payments will be recorded as a reduction of income taxes and reflected in operating cash flows upon the adoption of this ASU, eliminating additional paid in capital pools. In addition, the guidance allows for a policy election to account for forfeitures as they occur rather than on an estimated basis. This guidance is effective for annual and interim reporting periods beginning after December 16, 2016 with early adoption permitted. We are currently evaluating the impact of this guidance on our financial statements and the timing of adoption. In February 2016, the FASB issued ASU 2016-2 “Leases (Topic 842)”. The ASU requires lessees to recognize most leases on their balance sheet as a right-of-use asset and a lease liability. For income statement purposes, the FASB retained a dual model, requiring leases to be classified as either operating or finance. The criteria for evaluating are similar to those applied in current leases accounting. This guidance is effective for annual and interim reporting periods beginning after December 15, 2018 with early adoption permitted. We are currently evaluating the impact of this guidance on our financial statements and the timing of adoption. In July 2015, the FASB issued ASU 2015-11, “Simplifying the Measureme nt of Inventory” to simplify the guidance on the subsequent measurement of inventory, excluding inventory measured using last-in, first out or the retail inventory method. Under the new standard, inventory should be at the lower of cost and net realizable value. The new accounting guidance is effective for interim and annual periods beginning after December 15, 2016 with early adoption permitted. The Company is current ly evaluating the impact of this guidance on our financial statements and the timing of adoption. In May 2014, the FASB issued ASU 2014-09 “Revenue from Contracts with Customers (Topic 606 )”. This topic converges the guidance within U.S. GAAP and International Financial Reporting Standards and supersedes Accounting Standards Codification 605, Revenue Recognition. The new standard requires companies to recognize revenue to depict the transfer of goods or services to customers in amounts that reflect the consideration to which the company expects to be entitled in exchange for those goods or services. The new standard will also result in enhanced disclosures about revenue, provide guidance for transactions that were not previously addressed comprehensively, and improve guidance for multiple-element arrangements. The new guidance is effective for annual reporting periods beginning after December 15, 2017, including interim reporting periods within that reporting period. We are currently evaluating the impact that this standard will have on our financial statements.

Net (Loss) Income Per Common 14

Net (Loss) Income Per Common Share (Tables)	3 Months Ended
	Mar. 31, 2016
Net (Loss) Income Per Common Share [Abstract]
Computation of Basic and Diluted Net (Loss) Income Per Common Share	   Three months ended  March 31,   (dollars in thousands, except per share amounts) 2016 2015   Numerator:   Net (loss) income $ (2,440) $ 125  Adjustment for interest expense on convertible notes (A) - -   Net (loss) income, as adjusted $ (2,440) $ 125   Denominator:   Weighted average number of shares of common stock outstanding 7,162,601 7,054,469  Weighted average effect of dilutive stock options and other stock compensation - 39,482   Weighted average number of shares of common stock outstanding, as adjusted 7,162,601 7,093,951   Net (loss) income per common share:   Net (loss) income per common share - Basic $ (0.34) $ 0.02   Net (loss) income per common share - Diluted $ (0.34) $ 0.02 (A) An adjustment for interest expense on convertible notes was excluded from the (loss) income per share calculation for the three months ended March 31, 2016 and 2015 as a result of the convertible notes being antidilutive.

Inventory (Tables)

Inventory (Tables)	3 Months Ended
	Mar. 31, 2016
Inventory [Abstract]
Major Classes of Inventory	   March 31, December 31,  (in thousands) 2016 2015   Raw materials and starting stock $ 6,456 $ 6,235  Semi-finished and finished steel products 68,852 69,907  Operating materials 8,655 8,543   Gross inventory 83,963 84,685  Inventory reserves (1,621) (1,312)   Total inventory, net $ 82,342 $ 83,373 

Long-Term Debt (Tables)

Long-Term Debt (Tables)	3 Months Ended
	Mar. 31, 2016
Long-Term Debt [Abstract]
Schedule of Long-Term Debt	   March 31, December 31,  (in thousands) 2016 2015   Revolving credit facility $ 26,601 $ 44,350  Convertible notes 19,000 20,000  Term loan 29,487 12,500  Swing loan credit facility 774 287  Capital leases 1,963 -   Total debt 77,825 77,137  Less: current portion of long-term debt (4,556) (3,000)  Less: deferred financing costs (1,144) (1,253)   Long-term debt $ 72,125 $ 72,884 
Future Minimum Lease Payments for Capital Leases	  2016 $ 355  2017 473  2018 473  2019 473  2020 473  2021 375  Total minimum capital lease payments $ 2,622  Less amounts representing interest (659)  Present value of net minimum capital lease payments $ 1,963  Less current obligation (270)  Total long-term capital lease obligation $ 1,693 

Net (Loss) Income Per Common 17

Net (Loss) Income Per Common Share (Narrative) (Details) - $ / shares	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Exercise of Stock Options [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities excluded from computation of earnings per share, amount	515
Stock Compensation Plan [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities excluded from computation of earnings per share, amount	821,500	562,300
Average price of anti-dilutive options outstanding	$ 26.97	$ 33.97
Convertible Notes [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities excluded from computation of earnings per share, amount	410,816	427,459

Net (Loss) Income Per Common 18

Net (Loss) Income Per Common Share (Computation of Basic and Diluted Net (Loss) Income Per Common Share) (Details) - USD ($) $ / shares in Units, $ in Thousands		3 Months Ended
		Mar. 31, 2016	Mar. 31, 2015
Numerator:
Net (loss) income		$ (2,440)	$ 125
Adjustment for interest expense on convertible notes	[1]
Net (loss) income, as adjusted		$ (2,440)	$ 125
Denominator:
Weighted average number of shares of common stock outstanding		7,162,601	7,054,469
Weighted average effect of dilutive stock options and other stock compensation			39,482
Weighted average number of shares of common stock outstanding, as adjusted		7,162,601	7,093,951
Net (loss) income per common share:
Net (loss) income per common share - Basic		$ (0.34)	$ 0.02
Net (loss) income per common share - Diluted		$ (0.34)	$ 0.02
[1]	An adjustment for interest expense on convertible notes was excluded from the (loss) income per share calculation for the three months ended March 31, 2016 and 2015 as a result of the convertible notes being antidilutive.

Inventory (Narrative) (Details)

Inventory (Narrative) (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Inventory [Abstract]
Cost of goods sold, amortization of operating materials	$ 379	$ 540

Inventory (Major Classes of Inv

Inventory (Major Classes of Inventory) (Details) - USD ($) $ in Thousands	Mar. 31, 2016	Dec. 31, 2015
Inventory [Abstract]
Raw materials and starting stock	$ 6,456	$ 6,235
Semi-finished and finished steel products	68,852	69,907
Operating materials	8,655	8,543
Gross inventory	83,963	84,685
Inventory reserves	(1,621)	(1,312)
Total inventory, net	$ 82,342	$ 83,373

Long-Term Debt (Credit Facility

Long-Term Debt (Credit Facility) (Narrative) (Details)	Feb. 02, 2016USD ($)shares	Jan. 21, 2016USD ($)	Mar. 31, 2016USD ($)	Dec. 31, 2015USD ($)
Line of Credit Facility [Line Items]
Deferred financing fees			$ 1,144,000	$ 1,253,000
Write off of deferred debt financing fees			768,000
Reclassification of deferred debt issuance costs			$ 1,253,000
Directors And Officers [Member] | New Credit Agreement [Member]
Line of Credit Facility [Line Items]
Shares of common stock issued | shares	73,207
Aggregate purchase price of common stock issued	$ 500,004
PNC Bank [Member] | New Credit Agreement [Member]
Line of Credit Facility [Line Items]
Debt instrument, maturity date			Jan. 21, 2021
Minimum fixed charge coverage ratio			1.10
Deferred financing fees			$ 702,000
PNC Bank [Member] | Prior Credit Agreement [Member]
Line of Credit Facility [Line Items]
Write off of deferred debt financing fees			$ 768,000
Revolving Credit Facility [Member] | PNC Bank [Member]
Line of Credit Facility [Line Items]
Maximum secured borrowing capacity		$ 65,000,000
Commitment fee on the daily unused portion of the Revolver		0.25%
Revolving Credit Facility [Member] | PNC Bank [Member] | LIBOR [Member]
Line of Credit Facility [Line Items]
Debt instrument basis spread on variable rate			3.69%
Revolving Credit Facility [Member] | PNC Bank [Member] | Request to Increase Borrowing Prior to January 21, 2020 [Member]
Line of Credit Facility [Line Items]
Increase in maximum aggregate principal amount of borrowings		$ 25,000,000
Letter of Credit [Member] | PNC Bank [Member]
Line of Credit Facility [Line Items]
Maximum secured borrowing capacity		10,000,000
Term Loan [Member] | PNC Bank [Member]
Line of Credit Facility [Line Items]
Maximum secured borrowing capacity		30,000,000
Quarterly term loan payments			$ 1,100,000
Debt instrument payment start date			Apr. 1, 2016
Term Loan [Member] | PNC Bank [Member] | LIBOR [Member]
Line of Credit Facility [Line Items]
Debt instrument basis spread on variable rate			4.19%
Swing Loan Credit Facility [Member] | PNC Bank [Member]
Line of Credit Facility [Line Items]
Maximum secured borrowing capacity		$ 6,500,000

Long-Term Debt (Convertible Not

Long-Term Debt (Convertible Notes, Capital Leases) (Narrative) (Details)	Jan. 21, 2016USD ($)$ / shares	Mar. 31, 2016USD ($)	Dec. 31, 2015USD ($)	Aug. 31, 2011USD ($)
Debt Instrument [Line Items]
Capital lease term applicable to depreciate capital assets and obligations		5 years
Net present value of the minimum lease payments, at inception		$ 1,963,000
Capital lease obligations			$ 0
Amortization of capital lease assets		$ 33,070
Convertible Notes [Member] | North Jackson Facility [Member]
Debt Instrument [Line Items]
Debt instrument, face amount				$ 20,000,000
Convertible Notes [Member] | Gorbert Inc. [Member]
Debt Instrument [Line Items]
Debt instrument, face amount	$ 20,000,000
Debt instrument, maturity date		Mar. 17, 2019
Debt instrument principal payment	1,000,000
Convertible Notes [Member] | If Maturity Date Extend to March 17, 2020 [Member] | Gorbert Inc. [Member]
Debt Instrument [Line Items]
Aggregate principal payment required on March 17, 2019	2,000,000
Convertible Notes [Member] | If Maturity Date Extend to March 17, 2021 [Member] | Gorbert Inc. [Member]
Debt Instrument [Line Items]
Aggregate principal payment required on March 17, 2020	$ 2,000,000
Convertible Notes [Member] | Through and Including August 17, 2016 [Member] | Gorbert Inc. [Member]
Debt Instrument [Line Items]
Debt instrument interest rate	4.00%
Convertible Notes [Member] | August 18, 2016 Through and Including August 17, 2017 [Member] | Gorbert Inc. [Member]
Debt Instrument [Line Items]
Debt instrument interest rate	5.00%
Convertible Notes [Member] | From and After August 18, 2017 [Member] | Gorbert Inc. [Member]
Debt Instrument [Line Items]
Debt instrument interest rate	6.00%
Convertible Notes [Member] | If Holder Elects to Convert on or Prior to August 17, 2017 [Member] | Gorbert Inc. [Member]
Debt Instrument [Line Items]
Conversion stock price | $ / shares	$ 47.1675
Debt instrument integral multiple convertible principal amount	$ 100,000
Debt instrument, initial conversion rate per $1000 principal amount	21.2
Principal amount used to convert convertible notes	$ 1,000

Long-Term Debt (Schedule of Lon

Long-Term Debt (Schedule of Long-Term Debt) (Details) - USD ($) $ in Thousands	Mar. 31, 2016	Dec. 31, 2015
Debt Instrument [Line Items]
Total debt	$ 77,825	$ 77,137
Less: current portion of long-term debt	(4,556)	(3,000)
Less: deferred financing costs	(1,144)	(1,253)
Long-term debt	72,125	72,884
Revolving Credit Facility [Member]
Debt Instrument [Line Items]
Total debt	26,601	44,350
Convertible Notes [Member]
Debt Instrument [Line Items]
Total debt	19,000	20,000
Term Loan [Member]
Debt Instrument [Line Items]
Total debt	29,487	12,500
Swing Loan Credit Facility [Member]
Debt Instrument [Line Items]
Total debt	774	$ 287
Capital Leases [Member]
Debt Instrument [Line Items]
Total debt	$ 1,963

Long-Term Debt (Future Minimum

Long-Term Debt (Future Minimum Lease Payments for Capital Leases) (Detail) $ in Thousands	Mar. 31, 2016USD ($)
Long-Term Debt [Abstract]
2,016	$ 355
2,017	473
2,018	473
2,019	473
2,020	473
2,021	375
Total minimum capital lease payments	2,622
Less amounts representing interest	(659)
Present value of net minimum capital lease payments	1,963
Less current obligation	(270)
Total long-term capital lease obligation	$ 1,693

Fair Value Measurement (Narrati

Fair Value Measurement (Narrative) (Details) - USD ($) $ in Millions	Mar. 31, 2016	Dec. 31, 2015
Fair Value, Inputs, Level 2 [Member]
Notes payable, fair value disclosure	$ 18.4	$ 19.2

Income Taxes (Narrative) (Detai

Income Taxes (Narrative) (Details)	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Income Taxes [Line Items]
Effective income tax rate continuing operations	44.00%	34.90%
Research and Development [Member]
Income Taxes [Line Items]
Estimated annual effective tax rate	44.00%	34.20%