-----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, MZtbmaLq0X5t3uAV7GvZRngsTDCKrvefF6fQoYlWKYkSM2KZFHJiq4K+tYbESWa7 95NOA6YNkHxChaSRzsVKRA== 0000898431-09-000049.txt : 20090429 0000898431-09-000049.hdr.sgml : 20090429 20090429093719 ACCESSION NUMBER: 0000898431-09-000049 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20090424 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Material Impairments ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20090429 DATE AS OF CHANGE: 20090429 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: 1207 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-25032 FILM NUMBER: 09777511 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 form8_k.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): April 24, 2009 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 April 29, 2009, Universal Stainless and Alloy Products, Inc. (the "Company") issued a press release regarding its earnings for the first quarter ended March 31, 2009. A copy of the press release is attached hereto as Exhibit 99.1. The information in Item 2.02 of this Current Report on Form 8-K, including the attached press release regarding the Company's earnings for the first quarter ended March 31, 2009, 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 2.06. Material Impairments. On April 24, 2009, the Company's management concluded and reported to the Company's Board of Directors that it had determined, based on its analysis of overdue trade accounts receivables, work-in-process inventory, commercial claims and personnel reductions, that an impairment charge in the amount of $3.7 million should be taken under generally accepted accounting principles applicable to the Company. This impairment charge is due primarily to the write-off of the accounts receivable from a significant customer and scrapping of slow moving inventory. The Company intends to re-melt the related work-in-process inventory for other uses. The Company does not believe this impairment charge will result in any future cash expenditures. Item 9.01. Financial Statements and Exhibits. (d) Exhibits 99.1 Press Release dated April 29, 2009 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: April 29, 2009 EX-99 2 exhibit99_1.txt EXHIBIT 99.1 EXHIBIT 99.1 [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 FIRST QUARTER 2009 RESULTS - Sales of $42.2 Million in Line with Forecast, 26% below 10Q08 on 18% Fewer Tons Shipped - - Net Loss of $3.8 Million Includes $3.6 Million of Unusual Charges - - Cash Flow from Operations was $2.6 Million in 1Q09 - - Cash on Hand Increased to $25.8 Million vs. Total Debt of $13.3 Million - - First Phase of Melt Shop Project Completed On-Time and On-Budget - BRIDGEVILLE, PA, April 29, 2009 - Universal Stainless & Alloy Products, Inc. (Nasdaq: USAP) reported today that sales for the first quarter of 2009 were $42.2 million, which was at the high end of its forecast of $32 million to $42 million. This compares with sales of $56.8 million in the first quarter of 2008. The Company recorded a net loss for the first quarter of 2009 of $3.8 million, or $0.57 per diluted share, which included unusual charges of $3.6 million equivalent to $0.53 per share, after-tax, as detailed below. The Company announced on March 24 that the deepening recession and economic uncertainty would contribute to an expected loss for the quarter and include unusual charges. In the first quarter of 2008, the Company recorded net income of $4.7 million, or $0.70 per diluted share. The first quarter of 2009 included the following unusual charges (totaling $6.0 million pre-tax): o $1.9 million increase to the bad debt reserve due to the inability of a privately held service center customer to pay amounts owed on 2008 business and a related $0.5 million increase to the inventory reserve; o $1.5 million due to a decline in raw material values and the consumption of high cost material during the quarter; o $1.0 million write-down of stock inventory; o $0.9 million attributed to the reduction of operating levels; and o $0.2 million resulting from a 20% reduction in salaried employees. Cash flow from operations remained positive in the first quarter of 2009 and totaled $2.6 million. Capital expenditures were a near-record $3.7 million including initial expenditures of $2.5 million for the $13 million melt shop upgrade project. At March 31, 2009, cash was $25.8 million, working capital was $100.6 million and long-term debt was $12.9 million. President and CEO Dennis Oates commented: "The persistence of very difficult economic and credit conditions in the first quarter of 2009 resulted in reduced market demand, significant de-stocking in the specialty steel supply channel and liquidity problems for several of our privately-held customers. We have executed plans to aggressively reduce costs, generate cash and adjust our operating levels to market realities. "These actions are designed to improve our performance under current conditions and position us to seize opportunities when the markets recover. We continue to strengthen our organization with industry veterans through the addition of Bill Beible as Senior Vice President of Operations and the naming of Chris Ayers to our Board of Directors. Lastly, our strategic investment program is progressing on time and on budget. These investments are focused on reducing production cycle times, increasing customer service levels, improving material yields, reducing operating costs and enhancing working capital management." Mr. Oates concluded: "Given the unprecedented uncertainty in our industry, we are not providing specific earnings guidance for the second quarter of 2009. We anticipate that second quarter sales will be below those of the first quarter of 2009 based on current low order entry and a decline in our backlog to $58 million at March 31 from $75 million at year-end. Our performance in the second quarter of 2009 is expected to be aided by our cost saving initiatives and better alignment of material costs to surcharges. We also expect to generate positive cash flow and maintain our strong balance sheet." Segment Review - -------------- For the first quarter of 2009, the Universal Stainless & Alloy Products segment had sales of $36.7 million and an operating loss of $3.9 million, including $5.0 million of unusual charges. In the first quarter of 2008, sales were $48.2 million and operating income was $4.9 million, or 10% of sales. In the fourth quarter of 2008, sales were $53.1 million and operating income of $1.9 million, or 3% of sales. Segment sales declined 24% from the first quarter of 2008 primarily due to a 19% decrease in tons shipped. Increased shipments to forgers and OEMs were offset by lower shipments to rerollers and to service centers, mainly of tool steel plate. Segment sales decreased 31% from the fourth quarter of 2008 on 19% fewer tons shipped. The Dunkirk Specialty Steel segment recorded sales of $11.4 million and an operating loss of $2.5 million for the first quarter of 2009, including unusual charges of $1.0 million. In the first quarter of 2008, sales were $20.1 million and operating income was $2.8 million, or 14% of sales. In the fourth quarter of 2008, sales were $11.4 million and the operating loss of $1.3 million, including a $248,000 charge related to the relocation of the round bar finishing line to Dunkirk from Bridgeville. Dunkirk's sales declined 43% from the first quarter of 2008 while tons shipped decreased 28% due to lower shipments to all customer categories and lower surcharges. Dunkirk's sales were level with the fourth quarter of 2008 while tons shipped increased 23%, with the benefit of a strong increase in shipments to service centers offset by lower surcharges. Webcast - ------- A simultaneous Webcast of the Company's conference call discussing the first quarter of 2009, 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. 2 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. 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- 3 UNIVERSAL STAINLESS & ALLOY PRODUCTS, INC. FINANCIAL HIGHLIGHTS (Dollars in thousands, except per share information) (Unaudited) CONSOLIDATED STATEMENT OF OPERATIONS For the Quarter Ended March 31, 2009 2008 ---- ---- Net Sales Stainless steel $ 33,762 $ 42,028 Tool steel 3,329 9,107 High-strength low alloy steel 2,743 4,011 High-temperature alloy steel 2,019 1,146 Conversion services 304 525 Other 29 28 --------- --------- Total net sales 42,186 56,845 Cost of products sold 43,864 46,779 Selling and administrative expenses 4,737 3,075 --------- --------- Operating income (loss) (6,415) 6,991 Interest expense (24) (28) Other income 30 87 --------- --------- Income (loss) before taxes (6,409) 7,050 Income tax (benefit) provision (2,583) 2,327 --------- --------- Net income (loss) $ (3,826) $ 4,723 ========= ========= Earnings (loss) per share - Basic $ (0.57) $ 0.71 ========= ========= Earnings (loss) per share - Diluted $ (0.57) $ 0.70 ========= ========= Weighted average shares of Common Stock outstanding Basic 6,732,284 6,663,213 Diluted 6,761,436 6,771,482 MARKET SEGMENT INFORMATION For the Quarter Ended March 31, 2009 2008 ---- ---- Net Sales Service centers $ 17,532 $ 29,234 Forgers 12,971 9,018 Rerollers 6,004 11,239 Original equipment manufacturers 4,399 5,441 Wire redrawers 947 1,369 Conversion services 304 525 Other 29 19 --------- --------- Total net sales $ 42,186 $ 56,845 ========= ========= Tons shipped 9,593 11,767 ========= ========= 4 BUSINESS SEGMENT RESULTS Universal Stainless & Alloy Products Segment For the Quarter Ended March 31, 2009 2008 ---- ---- Net Sales Stainless steel $ 25,995 $ 27,310 Tool steel 3,208 8,424 High-strength low alloy steel 1,015 1,113 High-temperature alloy steel 734 569 Conversion services 188 357 Other 29 10 --------- --------- 31,169 37,783 Intersegment 5,516 10,415 --------- --------- Total net sales 36,685 48,198 Material cost of sales 20,266 23,339 Operation cost of sales 16,460 17,790 Selling and administrative expenses 3,873 2,138 --------- --------- Operating income (loss) $ (3,914) $ 4,931 ========= ========= Dunkirk Specialty Steel Segment For the Quarter Ended March 31, 2009 2008 ---- ---- Net Sales Stainless steel $ 7,767 $ 14,718 Tool steel 121 683 High-strength low alloy steel 1,728 2,898 High-temperature alloy steel 1,285 577 Conversion services 116 168 Other - 18 --------- --------- 11,017 19,062 Intersegment 365 988 --------- --------- Total net sales 11,382 20,050 Material cost of sales 8,794 11,839 Operation cost of sales 4,225 4,489 Selling and administrative expenses 864 937 --------- --------- Operating income (loss) $ (2,501) $ 2,785 ========= ========= 5 CONSOLIDATED BALANCE SHEET March 31, December 31, 2009 2008 ---- ---- Assets Cash $ 25,781 $ 14,812 Accounts receivable, net 29,190 33,057 Inventory 51,397 63,222 Other current assets 10,973 8,239 --------- ---------- Total current assets 117,341 119,330 Property, plant & equipment, net 65,203 62,626 Other assets 1,365 988 --------- --------- Total assets $ 183,909 $ 182,944 ========= ========== Liabilities and Stockholders' Equity Trade accounts payable $ 11,935 $ 19,350 Outstanding checks in excess of bank balance 790 540 Accrued employment costs 3,189 3,795 Current portion of long-term debt 409 403 Other current liabilities 381 421 --------- ---------- Total current liabilities 16,704 24,509 Long-term debt 12,940 1,046 Deferred taxes 12,033 11,689 Other liabilities 290 - --------- --------- Total liabilities 41,967 37,244 Stockholders' equity 141,942 145,700 --------- --------- Total liabilities and stockholders' equity $ 183,909 $ 182,944 ========= ========= 6 CONSOLIDATED STATEMENT OF CASH FLOW DATA For the Three-Month Period Ended March 31, 2009 2008 ---- ---- Cash flows provided by operating activities: Net income (loss) $ (3,826) $ 4,723 Adjustments to reconcile to net cash provided by operating activities: Depreciation and amortization 1,164 982 Loss on retirement of fixed assets - 286 Deferred tax (decrease) increase (609) 91 Stock based compensation expense 250 195 Tax benefit from share-based payment arrangements - (183) Changes in assets and liabilities: Accounts receivable, net 3,867 (7,174) Inventory 11,825 37 Trade accounts payable (7,415) 767 Accrued employment costs (606) (1,669) Other, net (2,013) 2,153 --------- -------- Cash flow provided by operating activities 2,637 208 --------- -------- Cash flow used in investing activities: Capital expenditures (3,734) (3,092) --------- -------- Cash flow used in investing activities (3,734) (3,092) --------- -------- Cash flows used in financing activities: Long-term debt issuance 12,000 - Long-term debt repayments (100) (99) Net change in outstanding checks in excess of bank balance 250 2,740 Deferred financing costs (84) Proceeds from issuance of common stock - 207 Tax benefit from share-based payment arrangements - 183 --------- -------- Cash flow used in financing activities 12,066 3,031 --------- -------- Net cash flow $ 10,969 $ 147 ========= ======== 7 -----END PRIVACY-ENHANCED MESSAGE-----