EXHIBIT 99.1
[LOGO 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
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Comm-Partners LLC
June Filingeri
(203) 972-0186
UNIVERSAL STAINLESS REPORTS SECOND QUARTER 2003 RESULTS IN LINE WITH FORECAST
BRIDGEVILLE, PA, July 23, 2003 -- Universal Stainless & Alloy Products,
Inc. (Nasdaq:USAP) today reported second quarter 2003 sales of $16.8 million and
a net loss of $440,000, or $0.07 per diluted share. This compares to sales of
$21.4 million, net income of $777,000 and diluted earnings per share of $0.12
reported in the comparable period of 2002.
The 2003 second quarter results were in line with the Company's estimate
reported April 23 and show sequential improvement over first quarter 2003 sales
of $14.7 million and net loss of $583,000 or $0.09 per diluted share.
Commenting on the results, President and CEO Mac McAninch stated: "We
achieved our highest sales level in four quarters and cut our operating loss by
half over the first quarter. Our service center sales were up 14% from the 2003
first quarter and 36% from the same period last year directly as a result of our
expanded product capability through Dunkirk Specialty Steel and our leadership
position in tool steel. While overall demand for aerospace and power generation
products remains weak, we are concentrating on the repair segment of those
markets. As a result, sales to forgers increased 44% over the first quarter."
Mr. McAninch continued: "Industry conditions remain highly competitive, as
economic recovery has not materialized in the majority of our markets. Despite
this, we remain disciplined in our pricing while continuing to focus on reducing
costs, increasing cash flow and maintaining a strong balance sheet."
USAP REPORTS SECOND QUARTER RESULTS IN LINE WITH FORECAST - Page 2 -
Segment Review
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The Universal Stainless & Alloy Products segment had sales of $14.5 million
and an operating loss of $255,000 for the second quarter of 2003, compared with
sales of $20.9 million and operating income of $1.7 million in the same period
of 2002. The higher second quarter 2002 sales mainly reflect a temporary benefit
to commodity reroller sales resulting from tariffs imposed by President Bush on
certain imported specialty steel products.
Second quarter 2003 sales rose 17% over the $12.4 million reported in the
first quarter of 2003 due mainly to a 35% increase in tool steel sales, a 37%
increase in sales to forgers and a 39% increase in shipments of non-commodity
reroll products to the Dunkirk Specialty Steel segment. The operating loss
narrowed by 67% from the $774,000 reported in the 2003 first quarter due to a
shift to higher margin products and higher utilization from the increased sales
level.
The Dunkirk Specialty Steel segment reported 2003 second quarter sales of
$5.4 million and an operating loss of $374,000. This compares with sales of $2.2
million and an operating loss of $376,000 in the same period of 2002, which was
during its early start-up phase and included the shipment of products that were
purchased as part of its February 14, 2002 acquisition by the Company.
In the first quarter of 2003, Dunkirk's sales were $4.8 million and the
operating loss was $599,000. The improvement over the first quarter of 2003
reflects higher sales of finished bar products to service centers and OEMs.
Business Outlook
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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 third quarter 2003 sales will range from $15 to
$19 million and that it will incur a net loss per diluted share of $0.07 to
$0.12. In the third quarter of 2002, sales were $15.9 million and diluted
earnings per share were $0.03. The following factors were considered in
developing these estimates:
o The Company's total backlog approximated $13.0 million on June 30, 2003, as
compared to $14.6 million at March 30, 2003.
o Demand for reroll and forging semi-finished products from the Universal
Stainless & Alloy Products segment is expected to increase mainly through
its focus on the aerospace and power generation repair markets.
o Sales from the Dunkirk Specialty Steel segment are expected to approximate
$5 million in the 2003 third quarter, based on its June 30, 2003 backlog of
$3.8 million. The Company remains committed to its pricing discipline with
the result that Dunkirk Specialty Steel's sales are expected to remain at
current levels given competitive industry conditions in response to the
weak economic environment.
USAP REPORTS SECOND QUARTER RESULTS IN LINE WITH FORECAST - Page 3 -
The Company noted that it is in compliance with its amended financial
covenants with PNC Bank through June 30, 2003. The Company also noted that it
has reached a tentative agreement with PNC Bank to replace certain financial
covenants with an asset-based funding formula.
Mr. McAninch concluded, "Our business will remain competitive and
challenging given the weak economy. We are taking all possible steps to fully
regain our footing and return to profitability. In this regard, we have added
John DeSanzo as General Manager of the Bridgeville operation. John has nearly 30
years of industry experience and is hard at work evaluating and improving our
processes and utilization at Bridgeville to improve on-time deliveries and
reduce costs. We will continue to focus on strengthening Universal Stainless and
the value we offer our customers as we position ourselves for better economic
conditions."
Webcast
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A simultaneous Webcast of the Company's conference call discussing the 2003
second quarter and the third 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
July 30th. It can be accessed by dialing 706-645-9291, passcode 1481049. This is
a toll call.
About Universal Stainless & Alloy Products, Inc.
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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
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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 Six-Months Ended
June 30, June 30,
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2003 2002 2003 2002
---- ---- ---- ----
Net sales $16,837 $21,422 $ 31,537 $39,018
Cost of products sold 15,941 18,574 30,621 32,819
Selling and administrative expenses 1,525 1,537 2,918 2,910
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Operating income (loss) (629) 1,311 (2,002) 3,289
Interest expense (94) (118) (189) (228)
Other income 23 31 50 62
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Income (loss) before taxes (700) 1,224 (2,141) 3,123
Income tax provision (benefit) (260) 447 (1,118) 1,140
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Net income (loss) $ (440) $ 777 $(1,023) $ 1,983
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Earnings (loss) per share - Basic $(0.07) $ 0.13 $ (0.16) $ 0.32
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Earnings (loss) per share - Diluted $(0.07) $ 0.12 $ (0.16) $ 0.32
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Weighted average shares of
Common Stock outstanding
Basic 6,284,699 6,176,813 6,284,669 6,127,043
========= ========= ========= =========
Diluted 6,285,895 6,253,245 6,285,757 6,182,916
========= ========= ========= =========
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BUSINESS SEGMENT AND OTHER INFORMATION
Net sales
Universal Stainless & Alloy Products $ 14,499 $ 20,882 $ 26,900 $ 38,520
Dunkirk Specialty Steel 5,395 2,173 10,179 2,379
Intersegment (3,057) (1,633) (5,542) (1,881)
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Consolidated net sales $ 16,837 $ 21,422 $ 31,537 $ 39,018
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Operating income (loss)
Universal Stainless & Alloy Products $ (255) $ 1,687 $ (1,029) $ 4,171
Dunkirk Specialty Steel (374) (376) (973) (882)
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Total operating income (loss) (629) 1,311 (2,002) 3,289
Depreciation and amortization of fixed assets 741 750 1,547 1,500
Other income 23 31 50 62
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EBITDA $ 135 $ 2,092 $ (405) $ 4,851
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Tons shipped 8,646 12,642 16,059 20,988
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CONSOLIDATED BALANCE SHEET
(Dollars in thousands)
June 30, December 31,
2003 2002
---- ----
Cash $ 6,037 $ 3,308
Accounts receivable, net 12,347 11,550
Inventory 21,937 22,717
Deferred taxes 1,192 1,127
Other current assets 2,392 2,454
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Current assets 43,905 41,156
Property, plant & equipment, net 40,687 42,246
Other assets 624 642
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$ 85,216 $ 84,044
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Accounts payable $ 5,966 $ 4,190
Bank overdrafts 916 275
Accrued employment costs 1,006 1,019
Current portion of long-term debt 1,972 1,971
Other current liabilities 660 163
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Current liabilities 10,520 7,618
Long-term debt 6,560 7,502
Deferred taxes 8,333 8,123
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Total liabilities 25,413 23,243
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Stockholders' equity 59,803 60,801
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$ 85,216 $ 84,044
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CONSOLIDATED STATEMENT OF CASH FLOW DATA
For the Six-Months Ended June 30,
2003 2002
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Cash flow from operating activities $ 3,013 $ 4,595
Cash flow due to investing activities (191) (3,093)
Cash flow due to financing activities (93) 1,779
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Net cash flow $ 2,729 $ 3,281
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