-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, MQ7QfyyO+JtThvV5Ev2T630b1OiyFpzALA89cXDX/RsIwFgQ+gacPNgr/RCIh/No 9RiMGSF6R4Bt2G/mdiHKTQ== 0000898431-06-000004.txt : 20060119 0000898431-06-000004.hdr.sgml : 20060119 20060119091226 ACCESSION NUMBER: 0000898431-06-000004 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20060119 ITEM INFORMATION: Results of Operations and Financial Condition FILED AS OF DATE: 20060119 DATE AS OF CHANGE: 20060119 FILER: COMPANY DATA: COMPANY CONFORMED NAME: UNIVERSAL STAINLESS & ALLOY PRODUCTS INC CENTRAL INDEX KEY: 0000931584 STANDARD INDUSTRIAL CLASSIFICATION: STEEL WORKS, BLAST FURNACES ROLLING MILLS (COKE OVENS) [3312] IRS NUMBER: 251724540 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-25032 FILM NUMBER: 06536902 BUSINESS ADDRESS: STREET 1: 600 MAYER ST CITY: BRIDGEVILLE STATE: PA ZIP: 15017 BUSINESS PHONE: 4122577600 MAIL ADDRESS: STREET 1: 600 MAYER ST CITY: BRIDGEVILLE STATE: PA ZIP: 15017 8-K 1 form_8k.txt FORM 8-K SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ---------------- 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): January 19, 2006 Universal Stainless & Alloy Products, Inc. ------------------------------------------------------ (Exact name of registrant as specified in its charter) Delaware 000-25032 25-1724540 ---------------------------- -------------- ------------------- (State or other jurisdiction (Commission (IRS Employer of incorporation) File Number) Identification No.) 600 Mayer Street, Bridgeville, Pennsylvania 15017 ------------------------------------------- ------------- (Address of principal executive offices) (Zip code) Registrant's telephone number, including area code: (412) 257-7600 Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2.): / / Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) / / Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) / / Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) / / Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) Item 2.02. Results of Operations and Financial Condition. On January 19, 2006, Universal Stainless and Alloy Products, Inc. issued a press release regarding its earnings for the fourth quarter ended December 31, 2005. 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: January 19, 2006 EX-99 2 exhibit99_1.txt EXHIBIT 99.1 [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 FOURTH QUARTER EPS OF $0.55 CAPPING RECORD 2005 - FULL YEAR EPS REACHES $2.02 ON SALES OF $170 MILLION - - BACKLOG GROWTH CONTINUES - BRIDGEVILLE, PA, January 19, 2006 -- Universal Stainless & Alloy Products, Inc. (Nasdaq: USAP) reported today that sales for the fourth quarter of 2005 rose 14% to $42.0 million compared with $37.0 million in the same period of 2004. Fourth quarter 2005 net income rose 38% to $3.6 million, or $0.55 per diluted share, and included $358,000 of other income from the receipt of 2005 import duties, equivalent to $0.04 per diluted share. This compares with net income of $2.6 million, or $0.40 per diluted share, reported in the fourth quarter of 2004, which included 2004 import duties of $507,000, equivalent to $0.05 per diluted share The Company's fourth quarter 2005 results exceeded its forecast of sales in the range of $33 to $38 million and diluted EPS in the range of $0.37 to $0.42, before including the benefit of import duties. For the full year 2005, sales rose 41% to a record $170.0 million compared with $120.6 million in 2004. Net income for 2005 increased 83% to a record $13.1 million, or $2.02 per diluted share, including the import duties received in the 2005 fourth quarter. Full year 2004 net income was $7.1 million, or $1.12 per diluted share, and included a total of $1.1 million of other income from import duties, equivalent to $0.11 per diluted share, reflecting the receipt of a substantial portion of the 2003 and 2004 import duties awarded to the Company. Before including import duties in both periods, full year 2005 net income was double that of 2004. President and CEO Mac McAninch commented: "Our very strong fourth quarter capped a record year for our Company. Our niche markets of aerospace, power generation, petrochemical and tool steel were robust all year and current indications are they will remain strong in 2006. Our cost recovery pricing strategy continued to be both effective for us and fair to our customers given the ongoing volatility of raw material costs and high energy prices." USAP REPORTS 2005 FOURTH QUARTER RESULTS - PAGE 2 - Mr. McAninch continued: "We also committed to further reinvest in our operations to increase throughput and efficiency at a time of acute customer need for our products, and to expand our capabilities to produce higher value-added products. We delivered on that promise with more than $8 million in capital improvements in 2005, including the addition of a vacuum-arc remelt furnace that became operational in December. In addition, we focused on process improvements throughout the year, especially at our Bridgeville and Titusville facilities which comprise the Universal Stainless and Alloy Products segment of our business. As a result, that segment achieved sales of $153 million in 2005, surpassing the company-wide record we achieved in 2004." SEGMENT REVIEW - -------------- In the fourth quarter of 2005, the Universal Stainless & Alloy Products segment had sales of $37.7 million and operating income of $4.7 million, yielding an operating margin of 12%. This compares with sales of $32.7 million and operating income of $2.3 million, or 7% of sales, in the fourth quarter of 2004, which included a bad debt charge of $282,000. In the 2005 third quarter, sales in this segment were $40.0 million and operating income was $4.0 million, or 10% of sales, including a write-off of $363,000 mainly for the retirement of fixed assets replaced. The 15% increase in sales compared with the 2004 fourth quarter reflects higher product prices and a favorable product mix, including strong growth in shipments of bar and special shape products. This more than offset the Company's continued reduction in shipments to rerollers. Fourth quarter 2005 sales were 6% lower than the prior quarter mainly due to lower sales to rerollers and forgers. Operating income was more than double that of the 2004 fourth quarter and up 17% from the 2005 third quarter due to the improved pricing, production processes and mix of products shipped. The Dunkirk Specialty Steel segment reported fourth quarter 2005 sales of $13.0 million and operating income of $1.3 million, resulting in an operating margin of 10%. This compares with sales of $10.5 million and operating income of $1.2 million, or 12% of sales, in the fourth quarter of 2004. In the third quarter of 2005, sales were $14.0 million and operating income was $1.8 million, or 13% of sales. Dunkirk's sales increased 24% over the 2004 fourth quarter due to higher selling prices and increased shipments of bar products to service centers and OEMs and of rod and wire products to redrawers and OEMs. They were 7% lower than the 2005 third quarter due to lower sales to redrawers and normal seasonal factors. Operating income rose just 2% over the fourth quarter of 2004 and was 28% lower than the prior quarter due to the high cost of raw materials at the time of feedstock procurement and manufacturing delays resulting from the mix of products in production. USAP REPORTS 2005 FOURTH QUARTER RESULTS - PAGE 3 - 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 first quarter 2006 sales will range from $40 to $45 million and that diluted EPS will range from $0.50 to $0.55. This compares with sales of $43.0 million and diluted EPS of $0.45 in the first quarter of 2005. The following factors were considered in developing these estimates: O The Company's total backlog at December 31, 2005 approximated $116 million compared to $106 million at September 30, 2005, reflecting continued strong aerospace, power generation, petrochemical and tool steel markets. O Production at the Bridgeville facility is expected to benefit from the recent addition of a milling machine, the improvements achieved in bar manufacturing and the initial contribution of the newly installed vacuum-arc remelt furnace. O Sales from the Dunkirk Specialty Steel segment are expected to remain at the $13 to $14 million level because of the expectation that the manufacturing delays will not be resolved until the end of the quarter. Mr. McAninch concluded: "Our goal in 2006 is to take further advantage of our strong marketplace through additional improvements in production processes and investment in our facilities, as we continue to focus on building value for our shareholders, customers and employees." WEBCAST - ------- A simultaneous Webcast of the Company's conference call discussing the fourth quarter of 2005 and the first quarter 2006 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 and continuing through January 25th. It can be accessed by dialing 706-645-9291, passcode 4039267. This is a toll call. USAP REPORTS 2005 FOURTH QUARTER RESULTS - PAGE 4 - 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 rerollers, forgers, service centers, original equipment manufacturers 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 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 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. 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 Year Ended December 31, December 31, 2005 2004 2005 2004 ---- ---- ---- ---- NET SALES Stainless steel $ 32,191 $ 28,944 $ 135,588 $ 94,530 Tool steel 5,556 5,890 20,737 17,075 High-strength low alloy steel 2,336 597 6,606 3,682 High-temperature alloy steel 1,371 673 3,694 2,468 Conversion services 497 751 3,030 2,386 Other 92 157 367 501 ------ ------- ---------- ---------- Total net sales 42,043 37,012 170,022 120,642 Cost of products sold 34,653 31,396 140,952 102,972 Selling and administrative expenses 2,106 2,053 8,441 7,401 ------ ------- ---------- ---------- Operating income 5,284 3,563 20,629 10,269 Interest expense (256) (120) (851) (422) Other income 374 542 437 1,119 ------ ------- ---------- ---------- Income before taxes 5,402 3,985 20,215 10,966 Income tax provision 1,826 1,392 7,159 3,835 ------- ------- ---------- ---------- Net income $ 3,576 $ 2,593 $ 13,056 $ 7,131 ======= ======= ========== ========== Earnings per share - Basic $ 0.56 $ 0.41 $ 2.05 $ 1.13 ======= ====== ========== ========== Earnings per share - Diluted $ 0.55 $ 0.40 $ 2.02 $ 1.12 ======= ====== ========== ========== Weighted average shares of Common Stock outstanding Basic 6,403,185 6,318,951 6,375,257 6,304,909 Diluted 6,506,596 6,427,348 6,479,114 6,379,579 - ---------------------------------------------------------------------------------------------------------- MARKET SEGMENT INFORMATION For the Quarter Ended For the Year Ended December 31, December 31, 2005 2004 2005 2004 ---- ---- ---- ---- NET SALES Service centers $ 19,817 $ 16,645 $ 73,213 $ 52,261 Rerollers 6,214 8,735 39,254 30,200 Forgers 7,172 6,827 29,914 22,008 Original equipment manufacturers 5,922 2,248 13,992 8,349 Wire redrawers 2,329 1,662 10,263 5,008 Conversion services 497 751 3,030 2,386 Other 92 144 356 430 ------ ------- ---------- ---------- Total net sales $ 42,043 $ 37,012 $ 170,022 $ 120,642 ====== ======= ========== ========== Tons shipped 10,668 13,662 51,233 48,350 ====== ======= ========== ==========
BUSINESS SEGMENT RESULTS UNIVERSAL STAINLESS & ALLOY PRODUCTS SEGMENT
For the Quarter Ended For the Year Ended December 31, December 31, 2005 2004 2005 2004 ---- ---- ---- ---- NET SALES Stainless steel $ 21,666 $ 19,739 $ 90,530 $ 65,208 Tool steel 5,324 5,770 20,047 16,672 High-strength low alloy steel 1,312 189 3,199 1,576 High-temperature alloy steel 1,019 656 3,254 2,182 Conversion services 412 605 2,534 1,961 Other 78 129 295 427 ------ ------- ---------- ---------- 29,811 27,088 119,859 88,026 Intersegment 7,893 5,620 33,399 20,208 ------ ------- ---------- ---------- Total net sales 37,704 32,708 153,258 108,234 Material cost of sales 16,412 16,044 75,568 49,967 Operation cost of sales 15,151 12,788 56,885 45,521 Selling and administrative expenses 1,467 1,581 5,791 5,253 ------ ------- ---------- ---------- Operating income $ 4,674 $ 2,295 $ 15,014 $ 7,493 ====== ======= ========== ========== DUNKIRK SPECIALTY STEEL SEGMENT For the Quarter Ended For the Year Ended December 31, December 31, 2005 2004 2005 2004 ---- ---- ---- ---- NET SALES Stainless steel $ 10,525 $ 9,205 $ 45,058 $ 29,322 Tool steel 232 120 690 403 High-strength low alloy steel 1,024 408 3,407 2,106 High-temperature alloy steel 352 17 440 286 Conversion services 85 146 496 425 Other 14 28 72 74 ------ -------- ---------- ---------- 12,232 9,924 50,163 32,616 Intersegment 750 535 2,848 2,107 ------ -------- ---------- ---------- Total net sales 12,982 10,459 53,011 34,723 Material cost of sales 7,750 5,739 29,496 17,834 Operation cost of sales 3,324 3,008 14,141 11,653 Selling and administrative expenses 639 472 2,650 2,148 ------ -------- ---------- ---------- Operating income $ 1,269 $ 1,240 $ 6,724 $ 3,088 ====== ======== ========== ==========
CONSOLIDATED BALANCE SHEET
December 31, December 31, 2005 2004 ---- ---- ASSETS Cash $ 620 $ 241 Accounts receivable, net 27,963 24,562 Inventory 51,398 38,318 Other current assets 2,790 3,418 ----------- -------------- Total current assets 82,771 66,539 Property, plant & equipment, net 45,761 40,716 Other assets 495 585 ----------- -------------- Total assets $ 129,027 $ 107,840 =========== ============== LIABILITIES AND STOCKHOLDERS' EQUITY Accounts payable $ 12,579 $ 11,666 Outstanding checks in excess of bank balance 3,101 2,638 Accrued employment costs 2,958 1,830 Current portion of long-term debt 1,555 2,044 Other current liabilities 914 442 ----------- -------------- Total current liabilities 21,107 18,620 Bank revolver 6,117 8,635 Long-term debt 11,200 3,555 Deferred taxes 9,600 10,093 ----------- -------------- Total liabilities 48,024 40,903 Stockholders' equity 81,003 66,937 ----------- -------------- Total liabilities and stockholders' equity $ 129,027 $ 107,840 =========== ==============
CONSOLIDATED STATEMENT OF CASH FLOW DATA For the Year Ended December 31,
2005 2004 ---- ---- Cash flows from operating activities: Net income $ 13,056 $ 7,131 Adjustments to reconcile to net cash provided by (used in) operating activities: Depreciation and amortization 3,085 3,061 Loss on retirement of fixed assets 705 - Deferred taxes (90) 724 Tax benefit from exercise of stock options 207 51 Changes in assets and liabilities: Accounts receivable, net (3,401) (11,872) Inventory (13,080) (16,037) Trade accounts payable 913 4,981 Accrued employment costs 1,128 997 Other, net 808 1,247 ------------ ---------- Cash flow provided by (used in) operating activities 3,331 (9,717) ------------ ---------- Cash flow from investing activities: Acquisition of real property through purchase agreements (344) - Capital expenditures (8,464) (3,586) ------------ ---------- Cash flow used in investing activities (8,808) (3,586) ------------ ---------- Cash flows from financing activities: Proceeds from long-term debt 8,050 - Repayments of long-term debt (894) (1,944) Borrowings under revolving line of credit (2,518) 8,635 Increase in outstanding checks in excess of bank balance 463 1,825 Deferred financing costs (48) (26) Proceeds from issuance of common stock 803 319 ------------ ---------- Cash flow provided by financing activities 5,856 8,809 ------------ ---------- Net cash flow $ 379 $ (4,494) ============ ==========
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