-----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, JYYVVLGx5vxYEr6SdQ8+kkSgB7oaGvwoJa0lt05e7JJkFUQHn4QlKSa4gsorwDr9 FR7PT/t5HSR6livfF7opjQ== 0000898431-07-000015.txt : 20070118 0000898431-07-000015.hdr.sgml : 20070118 20070118091111 ACCESSION NUMBER: 0000898431-07-000015 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20070118 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20070118 DATE AS OF CHANGE: 20070118 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: 07536488 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 18, 2007 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 18, 2007, Universal Stainless and Alloy Products, Inc. issued a press release regarding its earnings for the fourth quarter ended December 31, 2007. A copy of the press release is attached hereto as Exhibit 99.1. 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. Item 9.01 Financial Statements and Exhibits. (d) Exhibits 99.1 Press Release dated January 18, 2007 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 18, 2007 EX-99 2 release.txt [GRAPHIC OMITTED][GRAPHIC OMITTED] CONTACTS: Richard M. Ubinger June Filingeri Vice President of Finance, President Chief Financial Officer and Treasurer Comm-Partners LLC (412) 257-7606 (203) 972-0186 FOR IMMEDIATE RELEASE UNIVERSAL STAINLESS REPORTS RECORD SALES AND EARNINGS FOR FOURTH QUARTER AND FULL YEAR 2006 - Fourth Quarter EPS Reaches $0.97 on $56 Million in Sales - - Full-Year Sales Top $200 Million and EPS Climbs to $3.12 - BRIDGEVILLE, PA, January 18, 2007 - Universal Stainless & Alloy Products, Inc. (Nasdaq: USAP) reported today that sales for the fourth quarter of 2006 rose 33% to a record $55.8 million compared with $42.0 million in the same period of 2005. Fourth quarter 2006 net income rose 80% to a record $6.4 million, or $0.97 per diluted share. This compares with net income of $3.6 million, or $0.55 per diluted share, reported in the fourth quarter of 2005. For the full year 2006, sales rose 20% to a record $203.9 million compared with $170.0 million in 2005. Net income for 2006 increased 58% to a record $20.6 million, or $3.12 per diluted share compared with $13.1 million, or $2.02 per diluted share reported for 2005. The 2006 fourth quarter and full year results included $465,000 of other income from the receipt of 2006 import duties, equivalent to $0.05 per diluted share, and a reduction in the annual income tax rate to 35.2% from 36.0%, equivalent to $0.04 per diluted share. The 2005 fourth quarter and full year results included import duties of $358,000, equivalent to $0.04 per diluted share, and a reduction in the annual income tax rate to 35.4% from 36.0%, equivalent to $0.02 per diluted share. The Company's fourth quarter 2006 results exceeded its forecast of sales in the range of $45 to $50 million and diluted EPS in the range of $0.70 to $0.75. Chairman and CEO Mac McAninch commented: "We achieved record results in the fourth quarter of 2006 as we have each quarter this year due to the strength of our niche markets coupled with our targeted investments in capital equipment and personnel, which have enabled us to take advantage of market opportunities. Substantial aerospace demand continued to be the major force driving our growth in the fourth quarter accompanied by increased year-over-year sales to the petrochemical and power generation markets. In fact, the sizeable increase in our fourth quarter forger sales was for billet product to be used for power generation applications. While our sales of tool steel slowed in the second half of 2006, we view this as temporary because of the favorable outlook for heavy equipment manufacturers later in 2007." USAP REPORTS RECORD 2006 FOURTH QUARTER RESULTS - Page 2 - Mr. McAninch continued: "Both of our operating segments reached important milestones for the full year. Sales at our Universal Stainless segment reached $179 million, while Dunkirk's sales crossed the $70 million threshold for the first time. These record results mainly reflect our successful shift to higher value-added products as well as higher nickel prices which increased the surcharge passed on to our customers." Mr. McAninch concluded: "We are entering 2007 with a great deal of optimism for further growth due to the continued strength of our markets. We continue to focus on initiatives to build the Company. We have expanded our executive team with the addition of Ken Matz as our new president, which we announced earlier this week. We also will continue to re-invest in our Company to meet the needs of our customers, to further increase our value-added sales and to build additional value for our shareholders." Segment Review - -------------- In the fourth quarter of 2006, the Universal Stainless & Alloy Products segment had sales of $47.1 million and operating income of $4.9 million, yielding an operating margin of 10%. This compares with fourth quarter 2005 sales of $37.7 million and operating income of $4.7 million, or 12% of sales. In the third quarter of 2006, sales were $47.2 million and operating income was $4.0 million, or 9% of sales. The reduction in operating margin in the 2006 fourth quarter in comparison to the prior year quarter is due to higher material costs incurred, as the price of nickel continued to rise throughout the quarter. The 25% increase in sales from the 2005 fourth quarter reflects the contribution of the new vacuum-arc remelt furnaces installed in 2005 and 2006, the addition of two milling machines and a plate flattener, and efficiency improvements in Bridgeville. It also was due to higher product prices and a favorable product mix including increased shipments to forgers and of bar products to service centers. Fourth quarter 2006 sales were level with the 2006 third quarter as lower sales of semi-finished product to rerollers and of tool steel plate to service centers were offset by increased sales to forgers. The Dunkirk Specialty Steel segment reported record sales for the 2006 fourth quarter of $20.3 million and record operating income of $4.0 million, resulting in an operating margin of 20%. This compares with sales of $13.0 million and operating income of $1.3 million, or 10% of sales, in the fourth quarter of 2005. In the third quarter of 2006 sales were $19.8 million and operating income was $3.8 million, or 19% of sales. Dunkirk's 56% increase in sales and 212% rise in operating income over the 2005 fourth quarter were due to the improved VAR remelted feedstock supply from Bridgeville, workforce additions, the timing of feedstock procurement and rising nickel prices that affected the surcharge mechanism. The year-over-year growth in sales reflected increases in nearly every customer category, with sales to redrawers up 40%, to service centers up 60% and to OEMs up 70%. Sales rose 2% over the 2006 third quarter and operating income increased 4% from the 2006 third quarter due to the effect of higher nickel prices. USAP REPORTS RECORD 2006 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 2007 sales will range from $52 to $57 million and that diluted EPS will range from $0.82 to $0.87. This compares with sales of $44.9 million and diluted EPS of $0.59 in the first quarter of 2006. The following factors were considered in developing these estimates: o The Company's total backlog at December 31, 2006 remained at high levels, approximating $120 million compared to $124 million at September 30, 2006. o The Company expects to continue to work down its backlog and improve its on-time delivery performance in the 2007 first quarter because it is shipping more remelted products from its seventh VAR furnace installed in August and is continuing to improve manufacturing processes and efficiency company-wide. o End market demand is expected to remain strong in the 2007 first quarter. Nickel prices are expected to remain level with the 2006 fourth quarter. o Sales from the Dunkirk Specialty Steel segment are expected to approximate $20 million in the first quarter of 2007 based on its backlog of $51 million at December 31, 2006. Its operating income as a percentage of sales is expected to approximate the average for 2006 of 16%, as the majority of its feedstock to support these sales reflect the higher nickel prices reached in the second half of 2006. Webcast - ------- A simultaneous Webcast of the Company's conference call discussing the fourth quarter of 2006 and the first quarter 2007 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 5578498. 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 rerollers, forgers, service centers, original equipment manufacturers and wire redrawers. USAP REPORTS RECORD 2006 FOURTH QUARTER RESULTS - Page 4 - 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, 2006 2005 2006 2005 ---- ---- ---- ---- Net Sales - --------- Stainless steel $ 41,474 $ 32,191 $ 151,633 $ 135,588 Tool steel 4,744 5,556 23,389 20,737 High-strength low alloy steel 6,145 2,336 16,467 6,606 High-temperature alloy steel 2,792 1,371 9,837 3,694 Conversion services 443 497 2,137 3,030 Other 209 92 410 367 ------- -------- ---------- --------- Total net sales 55,807 42,043 203,873 170,022 Cost of products sold 43,758 34,653 160,682 140,952 Selling and administrative expenses 2,619 2,106 10,792 8,441 ------ -------- ---------- --------- Operating income 9,430 5,284 32,399 20,629 Interest expense (296) (256) (1,106) (851) Other income 516 374 522 437 ------- -------- ---------- --------- Income before taxes 9,650 5,402 31,815 20,215 Income tax provision 3,222 1,826 11,201 7,159 ------- -------- ---------- --------- Net income 6,428 $ 3,576 $ 20,614 $ 13,056 ======= ======== ========== ========= Earnings per share - Basic $ 0.99 $ 0.56 $ 3.20 $ 2.05 ======= ======== ========== ========= Earnings per share - Diluted $ 0.97 $ 0.55 $ 3.12 $ 2.02 ======= ======== ========== ========= Weighted average shares of Common Stock outstanding Basic 6,516,880 6,403,185 6,451,037 6,375,257 Diluted 6,658,566 6,507,520 6,612,530 6,479,114
- ------------------------------------------------------------------------------- MARKET SEGMENT INFORMATION For the Quarter Ended For the Year Ended December 31, December 31, 2006 2005 2006 2005 ---- ---- ---- ---- Net Sales - --------- Service centers $ 25,760 $ 19,817 $ 101,510 $ 73,213 Forgers 13,504 7,172 38,539 29,914 Rerollers 8,193 6,214 33,273 39,254 Original equipment manufacturers 4,392 5,922 18,368 13,992 Wire redrawers 3,330 2,329 9,660 10,263 Conversion services 443 497 2,137 3,030 Other 185 92 386 356 ------- -------- -------- -------- Total net sales $ 55,807 $ 42,043 $ 203,873 $170,022 ======= ======== ========= ======== Tons shipped 12,064 10,668 50, 51,233 ====== ======= ======== ========
BUSINESS SEGMENT RESULTS Universal Stainless & Alloy Products Segment For the Quarter Ended For the Year Ended December 31, December 31, 2006 2005 2006 2005 ---- ---- ---- ---- Net Sales - --------- Stainless steel $ 28,019 $ 21,666 $ 102,372 $ 90,530 Tool steel 4,281 5,324 21,747 20,047 High-strength low alloy steel 3,141 1,312 8,177 3,199 High-temperature alloy steel 1,097 1,019 3,787 3,254 Conversion services 287 412 1,530 2,534 Other 174 78 325 295 ------- -------- ---------- -------- 36,999 29,811 137,938 119,859 Intersegment 10,143 7,893 41,232 33,399 ------- -------- ---------- -------- Total net sales 47,142 37,704 179,170 153,258 Material cost of sales 23,489 16,412 85,298 75,568 Operation cost of sales 17,090 15,151 66,790 56,885 Selling and administrative expenses 1,713 1,467 7,392 5,791 ------- -------- ---------- -------- Operating income $ 4,850 $ 4,674 $ 19,690 $ 15,014 ========= ======== ========== ========
Dunkirk Specialty Steel Segment For the Quarter Ended For the Year Ended December 31, December 31, 2006 2005 2006 2005 ---- ---- ---- ---- Net Sales - --------- Stainless steel $ 13,455 $ 10,525 $ 49,261 $ 45,058 Tool steel 463 232 1,642 690 High-strength low alloy steel 3,004 1,024 8,290 3,407 High-temperature alloy steel 1,695 352 6,050 440 Conversion services 156 85 607 496 Other 35 14 85 72 ------- ------- ---------- ------- 18,808 12,232 65,935 50,163 Intersegment 1,446 750 4,320 2,848 ------- ------- ---------- -------- Total net sales 20,254 12,982 70,255 53,011 Material cost of sales 10,949 7,750 38,705 29,496 Operation cost of sales 4,438 3,324 16,654 14,141 Selling and administrative expenses 906 639 3,400 2,650 ------- ------- ---------- -------- Operating income $ 3,961 $ 1,269 $ 11,496 $ 6,724 ======= ======== ========== ========
CONSOLIDATED BALANCE SHEET December 31, December 31, 2006 2005 ---- ---- Assets - ------ Cash $ 2,909 $ 620 Accounts receivable, net 33,308 27,963 Inventory 66,019 51,398 Other current assets 3,044 2,790 ------------ -------------- Total current assets 105,280 82,771 Property, plant & equipment, net 49,251 45,761 Other assets 584 495 ------------ -------------- Total assets $ 155,115 $ 129,027 ============ ============== Liabilities and Stockholders' Equity - ------------------------------------ Trade accounts payable $ 13,123 $ 12,579 Accrued employment costs 4,121 2,958 Outstanding checks in excess of bank 3,427 3,101 balance Current portion of long-term debt 2,364 1,555 Other current liabilities 1,902 914 ------------ -------------- Total current liabilities 24,937 21,107 Bank revolver 8,392 6,117 Long-term debt 8,836 11,200 Deferred taxes 8,402 9,600 ------------ -------------- Total liabilities 50,567 48,024 Stockholders' equity 104,548 81,003 ------------ -------------- Total liabilities and stockholders' $ 155,115 $ 129,027 equity ============ ==============
CONSOLIDATED STATEMENT OF CASH FLOW DATA For the Year Ended December 31, 2006 2005 ---- ---- Cash flows provided by operating activities: Net income $ 20,614 $ 13,056 Adjustments to reconcile to net cash provided by operating activities: Depreciation and amortization 3,337 3,085 Loss on retirement of fixed assets 911 705 Deferred tax decrease (1,836) (90) Stock based compensation expense 27 - Tax benefit from exercise of stock options - 207 Excess tax benefits from share-based payment arrangements (1,073) - Changes in assets and liabilities: Accounts receivable, net (5,345) (3,401) Inventory (14,621) (13,080) Trade accounts payable 54 913 Accrued employment costs 1,163 1,128 Other, net 2,334 808 ------------ ---------- Cash flow provided by operating activities 6,301 3,331 ------------ ---------- Cash flow used in investing activities: Acquisition of assets and real property through purchase agreements - (344 ) Capital expenditures (7,716) (8,464) ------------ ---------- Cash flow used in investing activities (7,716) (8,808) ------------ ---------- Cash flows provided by financing activities: Revolving credit net borrowings 2,275 (2,518) Proceeds from long-term debt - 8,050 Deferred financing costs - (48) Long-term debt repayments (1,555) (89) Net change in outstanding checks in excess of bank balance 326 463 Proceeds from issuance of common stock 1,585 803 Excess tax benefits from share-based payment arrangements 1,073 - ----------- ---------- Cash flow provided by financing activities 3,704 5,856 ----------- ---------- Net cash flow $ 2,289 $ 379 =========== ==========
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