Universal Stainless & Alloy Products (USAP) 8-K Universal Stainless Reports Strong 2010 Second Quarter Results

Exhibit 99.1

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 STRONG 2010 SECOND QUARTER RESULTS

- Sales of $51.3 Million Are Up 48% from 1Q10 -

- EPS is $0.61 versus $0.21 in 1Q10 -

- Backlog Totals $46 Million versus $53 Million for 1Q10 -

BRIDGEVILLE, PA, July 28, 2010 – Universal Stainless & Alloy Products, Inc. (Nasdaq: USAP) reported today that sales for the second quarter of 2010 were $51.3 million compared with $30.8 million in the second quarter of 2009 and $34.7 million in the 2010 first quarter.

Net income for the second quarter of 2010 was $4.2 million, or $0.61 per diluted share. For the second quarter of 2009, the Company reported a net loss of $0.4 million, or $0.06 per diluted share, which included a negative tax adjustment equivalent to $0.11 per share. In the first quarter of 2010, net income was $1.4 million, or $0.21 per diluted share.

The Company recorded negative cash flow from operations of $0.8 million for the second quarter of 2010 after adjusting for a $4.1 million tax refund. This compares with positive cash flow of $12.7 million in the second quarter of 2009 and negative cash flow of $2.8 million for the first quarter of 2010. Cash flow has decreased in 2010 due to the Company’s investment in managed working capital to support increased sales activity. Capital expenditures were $2.3 million, including $1.2 million for a melt shop upgrade project, which is expected to be completed in the current quarter. At June 30, 2010, the Company had cash of $34.7 million and total debt of $12.2 million.

The Company noted that shipment volume continued to improve in the second quarter of 2010 and volume shipped to the end markets of aerospace, power generation, petrochemical and service center plate increased 48%, 48%, 38% and 27%, respectively, over the first quarter of 2010.

President and CEO Dennis Oates commented: “Market demand continued to recover in the second quarter. Our strong on-time performance and improved lead times helped win additional business and we made more progress in penetrating new segments of our markets. Sales rose to the highest level in 6 quarters and our company-wide operating margin reached 12.5% of sales, nearly double the level of the 2010 first quarter and the highest level in 11 quarters. In addition to the higher volumes, our increased profitability was due to cost reductions from ongoing process improvements and recent capital investments. We intend to make further progress in improved quality and reduced costs.

“Due to the uncertainty in general economic activity and raw material pricing, our customers remain cautious, which is reflected in some moderation in backlog. While our backlog of $46 million is up significantly from last year, it is down from $53 million at the end of the first quarter. We currently expect sequential sales growth for the balance of the year to be modest.”

1

Segment Review

For the second quarter of 2010, theUniversal Stainless & Alloy Products segment had sales of $49.7 million and operating income of $6.8 million, yielding an operating margin of 13.7% of sales. This compares with sales of $26.9 million and operating income of $0.9 million, or 3.5% of sales, in the second quarter of 2009. In the first quarter of 2010, sales were $31.2 million and operating income was $1.9 million, or 6.2% of sales.

Segment sales rose 85% from the second quarter of 2009 on a 72% increase in tons shipped mainly due to substantially higher shipments to rerollers and of plate products to service centers along with higher sales to forgers. Segment sales increased 59% from the first quarter of 2010 on a 46% increase in tons shipped also due to higher shipments to rerollers, including sales to the Dunkirk segment, service centers and forgers.

TheDunkirk Specialty Steel segment recorded sales of $13.9 million and operating income of $1.3 million for the second quarter of 2010, yielding an operating margin of 9.2% of sales. This compares with sales in the second quarter of 2009 of $10.2 million and an operating loss of $0.4 million. In the first quarter of 2010, sales were $10.4 million and operating income was $325,000, or 3.1% of sales.

Dunkirk’s sales increased 36% from the second quarter of 2009 on approximately the same number of tons shipped due a favorable product mix shift and higher selling prices. Dunkirk’s sales increased 33% from the first quarter of 2010 on a 12% increase in tons shipped, mainly due to higher shipments to service centers and higher selling prices.

Webcast

A simultaneous webcast of the Company’s conference call discussing the second quarter of 2010, 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 through the end of the third quarter of 2010.

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, in a wide variety of grades, widths and gauges to customer specifications. The Company’s products are sold to rerollers, forgers, service centers, original equipment manufacturers and wire redrawers for use in a variety of industries, including aerospace, power generation, petrochemical and heavy equipment manufacturing. Our specialty bar facilities have one of the broadest and diverse size range and product capabilities in the industry. Established in 1994, our experience, technical expertise, and dedicated workforce stand 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, risks associated with the receipt, pricing and timing of future customer orders, risks associated with significant fluctuations that may occur in raw material and energy prices, risks associated with the manufacturing process, labor and production yields, risks related to property, plant and equipment, and risks related to the ultimate outcome of the Company’s current and future litigation and regulatory matters. The Company’s actual results in future periods also may be impacted by various economic and market risk and uncertainties, many of which are 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.

- TABLES FOLLOW -

2

UNIVERSAL STAINLESS & ALLOY PRODUCTS, INC.

FINANCIAL HIGHLIGHTS

(Dollars in thousands, except per share information)

(Unaudited)

CONSOLIDATED STATEMENT OF OPERATIONS

	For the Quarter Ended June 30,						For the Six-Months Ended June 30,
	2010			2009			2010			2009
Net Sales
Stainless steel	$	36,715		$	25,648		$	60,747		$	59,410
Tool steel		8,863			1,563			15,038			4,892
High-strength low alloy steel		2,985			2,367			4,997			5,110
High-temperature alloy steel		1,396			876			3,288			2,895
Conversion services		781			292			1,192			596
Other		551			17			708			46
Total net sales		51,291			30,763			85,970			72,949
Cost of products sold		41,594			28,092			71,354			71,956
Selling and administrative expenses		3,291			2,106			5,951			6,843
Operating income (loss)		6,406			565			8,665			(5,850	)
Interest expense		(112	)		(27	)		(208	)		(51	)
Other income		1			35			1			65
Income (loss) before taxes		6,295			573			8,458			(5,836	)
Income tax provision (benefit)		2,140			973			2,876			(1,610	)
Net income (loss)	$	4,155		$	(400	)		5,582			(4,226	)
Earnings (loss) per share – Basic	$	0.61		$	(0.06	)	$	0.82		$	(0.63	)
Earnings (loss) per share – Diluted	$	0.61		$	(0.06	)	$	0.82			(0.63	)
Weighted average shares of Common Stock outstanding
Basic		6,774,653			6,751,739			6,773,995			6,742,012
Diluted		6,853,372			6,751,739			6,847,078			6,742,012
MARKET SEGMENT INFORMATION
	For the Quarter Ended June 30,						For the Six-Months  Ended June 30,
	2010			2009			2010			2009
Net Sales
Service centers	$	23,774		$	13,117		$	41,005		$	30,649
Forgers		13,127			10,420			23,111			23,391
Rerollers		8,892			1,960			12,552			7,964
Original equipment manufacturers		3,568			3,797			5,998			8,196
Wire redrawers		598			1,160			1,421			2,107
Conversion services		781			292			1,192			596
Other		551			17			691			46
Total net sales	$	51,291		$	30,763		$	85,970		$	72,949
Tons shipped		11,795			6,855			20,250			16,448

3

BUSINESS SEGMENT RESULTS

Universal Stainless & Alloy Products Segment

	For the Quarter Ended June 30,				For the Six-Months Ended June 30,
	2010		2009		2010		2009
Net Sales
Stainless steel	$	26,701	$	18,234	$	43,940	$	44,229
Tool steel		8,716		1,531		14,644		4,739
High-strength low alloy steel		935		647		1,384		1,662
High-temperature alloy steel		629		393		1,220		1,127
Conversion services		556		206		843		394
Other		510		11		664		40
		38,047		21,022		62,695		52,191
Intersegment		11,660		5,857		18,255		11,373
Total net sales		49,707		26,879		80,950		63,564
Material cost of sales		23,732		10,445		37,889		30,711
Operation cost of sales		16,937		14,131		30,311		30,591
Selling and administrative expenses		2,252		1,354		4,030		5,227
Operating income (loss)	$	6,786	$	949	$	8,720	$	(2,965	)

Dunkirk Specialty Steel Segment

	For the Quarter Ended June 30,					For the Six-Months Ended June 30,
	2010		2009			2010		2009
Net Sales
Stainless steel	$	10,014	$	7,414		$	16,807	$	15,181
Tool steel		147		32			394		153
High-strength low alloy steel		2,050		1,720			3,613		3,448
High-temperature alloy steel		767		483			2,068		1,768
Conversion services		225		86			349		202
Other		42		6			45		6
		13,245		9,741			23,276		20,758
Intersegment		671		465			1,071		830
Total net sales		13,916		10,206			24,347		21,588
Material cost of sales		7,857		6,345			13,812		15,139
Operation cost of sales		3,741		3,493			7,010		7,718
Selling and administrative expenses		1,040		752			1,922		1,616
Operating income (loss)	$	1,278	$	(384	)	$	1,603	$	(2,885	)

4

CONSOLIDATED BALANCE SHEET

	June 30, 2010		December  31, 2009
Assets
Cash	$	34,743	$	42,349
Accounts receivable, net		30,393		17,028
Inventory, net		55,648		41,322
Other current assets		5,244		9,344
Total current assets		126,028		110,043
Property, plant & equipment, net		70,332		70,085
Other assets		1,450		1,586
Total assets	$	197,810	$	181,714
Liabilities and Stockholders’ Equity
Trade accounts payable	$	14,407	$	7,783
Outstanding checks in excess of bank balance		367		734
Accrued employment costs		4,541		1,178
Current portion of long-term debt		2,834		2,223
Other current liabilities		1,530		553
Total current liabilities		23,679		12,471
Long-term debt		9,403		10,823
Deferred taxes		14,125		14,049
Other liabilities		316		145
Total liabilities		47,523		37,488
Stockholders’ equity		150,287		144,226
Total liabilities and stockholders’ equity	$	197,810	$	181,714

5

CONSOLIDATED STATEMENT OF CASH FLOW DATA

For the Six-month Period Ended June 30,

	2010			2009
Cash flows provided by operating activities:
Net income (loss)	$	$5,582		$	(4,226	)
Adjustments to reconcile to net cash provided by operating activities:
Depreciation and amortization		2,666			2,338
Deferred tax increase (decrease)		171			(262	)
Stock based compensation expense		569			499
Tax benefit from share-based payment arrangements		(8	)		(86	)
Changes in assets and liabilities:
Accounts receivable, net		(13,365	)		13,166
Inventory		(14,326	)		18,047
Trade accounts payable		6,624			(11,850	)
Accrued employment costs		3,363			(1,286	)
Accrued income taxes		5,211			(241	)
Other, net		(92	)		(807	)
Cash flow (used in) provided by operating activities		(3,605	)		15,292
Cash flow used in investing activities:
Proceeds from sale of fixed assets		17
Capital expenditures		(3,421	)		(7,645	)
Cash flow used in investing activities		(3,404	)		(7,645	)
Cash flows provided by financing activities:
Long-term debt issuance		—			12,000
State grant funding purchase of new equipment		500			—
Long-term debt repayments		(808	)		(199	)
Net change in outstanding checks in excess of bank balance		(367	)		(176	)
Deferred financing costs		—			(84	)
Proceeds from issuance of common stock		70			313
Tax benefit from share-based payment arrangements		8			86
Cash flow (used in) provided by financing activities		(597	)		11,940
Net cash flow	$	(7,606	)	$	19,587

6