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): July 19, 2012

Universal Stainless & Alloy Products, Inc.

(Exact name of registrant as specified in its charter)

Delaware	000-25032	25-1724540
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer 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 July 19, 2012, Universal Stainless and Alloy Products, Inc. issued a press release regarding its earnings for the second quarter ended June 30, 2012. 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 regarding the Company’s earnings for the second quarter ended June 30, 2012, 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 July 19, 2012

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/ Douglas M. McSorley
	Vice President of Finance,
	Chief Financial Officer and Treasurer

Dated: July 19, 2012

EX-99.1

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 SECOND QUARTER 2012 RESULTS

- Sales are $67.9 Million; EPS is $0.62

- North Jackson Facility Is Operationally Accretive to Results

- Quarter-end Backlog Totals $89.0 Million

- Conference Call and Webcast Scheduled for Tomorrow, July 20, at 9:00 a.m. (ET)

BRIDGEVILLE, PA, July 19, 2012 – Universal Stainless & Alloy Products, Inc. (Nasdaq: USAP) reported today that sales for the second quarter of 2012 were $67.9 million, an increase of 7% from the second quarter of 2011 but 9% below the record 2012 first quarter.

Operating income for the second quarter of 2012 was $7.3 million, a decline of 14% from the second quarter of 2011 and 25% below the 2012 first quarter. Operating income was 10.8% of sales in the second quarter of 2012 compared with 13.4% in the second quarter of 2011 and 13.0% of sales in the 2012 first quarter.

Net income for the second quarter of 2012 was $4.5 million, or $0.62 per diluted share, which includes a benefit of $0.02 per diluted share due to research and development tax credits. This compares with net income of $5.5 million, or $0.79 per diluted share, in the second quarter of 2011, which included $0.04 per diluted share of expense for the acquisition of the Company’s North Jackson facility. In the first quarter of 2012, net income was $6.3 million, or $0.86 per diluted share, including a benefit of $0.07 per diluted share due to state income tax adjustments as well as an after-tax loss of $0.2 million, or $0.03 per diluted share, attributable to the ramp-up of North Jackson. The operating income of the Company‘s North Jackson facility was accretive to second quarter 2012 results.

For the second quarter of 2012, the Company narrowed its negative cash flow from operations to $0.5 million despite investment in working capital and in the ramp-up of North Jackson. Capital expenditures were $10.3 million in the second quarter, including $7.2 million for the North Jackson operation. At June 30, 2012, the Company had total debt of $114.7 million, or 37.3% of total capitalization.

Shipment volume for the second quarter of 2012 increased 6% from the second quarter of 2011 but was 5% lower than the 2012 first quarter. Compared to the first quarter of 2012, tons shipped to the aerospace, petrochemical and power generation markets declined by 10%, 11% and 25%, respectively, while service center plate volume increased 48%.

Chairman, President and CEO Dennis Oates commented: “Despite continued end market strength, we experienced changes in our customers’ buying patterns as the second quarter progressed. Falling raw material prices and the prospect of lower future surcharges combined with growing economic caution influenced customers to reduce their order quantities, negatively impacting our shipment volume, order entry and backlog.

“The lower shipment volume and the gap between surcharges and our raw material costs reduced margins in the second quarter, although our operating margin as a percentage of sales remained above 10%. As anticipated we reached an important milestone in the quarter with our North Jackson facility becoming operationally accretive

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for the first time.

“Soft demand due to channel inventory adjustments is expected to continue through the normal summer slowdown. However, the fundamental drivers of our end markets remain in place and our long-term growth strategy and prospects remain intact.”

Segment Review

For the second quarter of 2012, the Universal Stainless & Alloy Products segment, including the North Jackson operation, had sales of $61.8 million and operating income of $4.5 million, yielding an operating margin of 7.2% of sales. In the second quarter of 2011, sales were $60.4 million and operating income was $6.4 million, or 10.7% of sales. For the first quarter of 2012, sales were $60.3 million and operating income was $5.8 million, or 9.6% of sales.

Segment sales increased 2% from the second quarter of 2011 on 2% higher tons shipped mainly due to increased shipments to service centers and of conversion pounds with the addition of North Jackson, offset by lower shipments to forgers of quick-turn ingot. Segment sales increased 3% from the 2012 first quarter on a 2% increase in volume, including higher shipments of tool steel to service centers, offset by lower shipments to forgers.

Sales for the Dunkirk Specialty Steel segment were $25.3 million for the second quarter of 2012 and operating income was $2.7 million, yielding an operating margin of 10.7% of sales. This compares with sales in the second quarter of 2011 of $25.6 million and operating income of $3.0 million, or 11.6% of sales. In the first quarter of 2012, sales were $30.5 million and operating income was $3.4 million, or 11.0% of sales

Dunkirk’s sales decreased 1% from the second quarter of 2011 on a 5% decrease in tons shipped. Dunkirk’s sales decreased 17% from the 2012 first quarter on 18% lower tons shipped, due to lower shipments to all major customer categories.

Webcast

The Company has scheduled a conference call for tomorrow, July 20, at 9:00 a.m. (Eastern) to discuss second quarter results. A simultaneous webcast 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 2012.

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. The Company’s products are used in a variety of industries, including aerospace, power generation, petrochemical and heavy equipment manufacturing. Established in 1994, the Company, with its experience, technical expertise, and dedicated workforce, stands 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, the concentrated nature of the Company’s customer base to date and the Company’s dependence on its significant customers; the receipt, pricing and timing of future customer orders; changes in product mix; the limited number of raw material and energy suppliers and significant fluctuations that may occur in raw material and energy prices; risks related to property, plant and equipment, including the Company’s reliance on the continuing operation of critical manufacturing equipment; risks associated with labor matters; the Company’s ongoing requirement for continued compliance with laws and regulations, including applicable safety and environmental regulations; the ultimate outcome of the Company’s current and future litigation and matters; risks related to acquisitions that the Company may make; and the impact of various economic, credit and market risk uncertainties. Many of these factors are not within the

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Company’s control and involve known and unknown risks and uncertainties that may cause the Company’s actual results in future periods to be materially different from any future performance suggested herein. Any unfavorable change in the foregoing or other factors could have a material adverse effect on the Company’s business, financial condition and results of operations. Further, the Company operates in an industry sector where securities values may be volatile and may be influenced by economic and other factors 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 -

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UNIVERSAL STAINLESS & ALLOY PRODUCTS, INC.

FINANCIAL HIGHLIGHTS

(Dollars in thousands, except per share information)

(Unaudited)

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

	For the Quarter Ended June 30,						For the Six-Months Ended June 30,
	2012*			2011			2012*			2011
Net Sales
Stainless steel	$	52,286		$	48,253		$	112,412		$	95,051
Tool steel		6,565			7,478			10,870			12,969
High-strength low alloy steel		5,841			4,771			12,079			9,485
High-temperature alloy steel		1,728			1,778			4,169			3,458
Conversion services		1,397			996			2,864			2,010
Scrap sales and other		49			42			86			156
Total net sales		67,866			63,318			142,480			123,129
Cost of products sold		56,296			51,146			116,635			100,159
Selling and administrative expenses		4,263			3,697			8,846			7,527
Operating income		7,307			8,475			16,999			15,443
Interest expense		(618	)		(118	)		(1,322	)		(243	)
Other income		38			143			61			143
Income before income taxes		6,727			8,500			15,738			15,343
Income tax provision		2,222			2,975			4,947			5,370
Net income	$	4,505		$	5,525		$	10,791		$	9,973
Earnings per common share – Basic	$	0.66		$	0.81		$	1.57		$	1.46
Earnings per common share – Diluted **	$	0.62		$	0.79		$	1.48		$	1.43
Weighted average shares of Common Stock outstanding
Basic		6,863,904			6,821,567			6,856,310			6,817,317
Diluted		7,465,260			6,995,361			7,445,391			6,973,785

MARKET SEGMENT INFORMATION

	For the Quarter Ended June 30,				For the Six-Months Ended June 30,
	2012*		2011		2012*		2011
Net Sales
Service centers	$	41,804	$	34,305	$	83,460	$	62,933
Forgers		9,149		11,925		22,868		23,795
Rerollers		10,426		10,672		21,422		23,477
Original equipment manufacturers		3,548		4,205		8,545		8,326
Wire redrawers		1,493		1,173		3,235		2,432
Conversion services		1,397		996		2,864		2,010
Scrap sales and other		49		42		86		156
Total net sales	$	67,866	$	63,318	$	142,480	$	123,129
Tons Shipped		13,277		12,591		27,311		25,604

* Includes the results of the North Jackson operation, which was acquired on August 18, 2011.

** 2012 diluted earnings per common share have been adjusted for interest expense on convertible notes.

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BUSINESS SEGMENT RESULTS

Universal Stainless & Alloy Products Segment

	For the Quarter Ended June 30,				For the Six-Months Ended June 30,
	2012*		2011		2012*		2011
Net Sales
Stainless steel	$	32,675	$	28,657	$	68,788	$	59,234
Tool steel		6,088		7,092		9,857		12,137
High-strength low alloy steel		1,931		688		3,987		1,154
High-temperature alloy steel		528		569		1,488		1,427
Conversion services		1,337		772		2,610		1,562
Scrap sales and other		37		21		98		129
		42,596		37,799		86,828		75,643
Intersegment		19,215		22,652		35,247		39,958
Total net sales		61,811		60,451		122,075		115,601
Material cost of sales		31,113		31,987		59,979		61,073
Operation cost of sales		23,555		19,709		46,196		38,300
Selling and administrative expenses		2,671		2,309		5,652		4,868
Operating income	$	4,472	$	6,446	$	10,248	$	11,360

* The Universal Stainless & Alloy Products segment includes the results of the North Jackson operation from the August 18, 2011 acquisition date.

Dunkirk Specialty Steel Segment

	For the Quarter  Ended June 30,				For the Six-Months Ended June 30,
	2012		2011		2012			2011
Net Sales
Stainless steel	$	19,611	$	19,596	$	43,624		$	35,817
Tool steel		477		386		1,013			832
High-strength low alloy steel		3,910		4,083		8,092			8,331
High-temperature alloy steel		1,200		1,209		2,681			2,031
Conversion services		60		224		254			448
Scrap sales and other		12		21		(12	)		27
		25,270		25,519		55,652			47,486
Intersegment		68		78		179			92
Total net sales		25,338		25,597		55,831			47,578
Material cost of sales		14,687		15,673		32,861			29,017
Operation cost of sales		6,346		5,561		13,696			10,602
Selling and administrative expenses		1,592		1,388		3,194			2,659
Operating income	$	2,713	$	2,975	$	6,080		$	5,300

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CONDENSED CONSOLIDATED BALANCE SHEETS

	June 30, 2012		December 31, 2011
Assets
Cash	$	180	$	274
Accounts receivable, net		40,847		34,554
Inventory, net		103,086		85,088
Deferred income taxes		21,845		28,438
Refundable income taxes		5,090		4,844
Other current assets		2,349		2,198
Total current assets		173,397		155,396
Property, plant and equipment, net		197,398		183,148
Goodwill		20,479		20,479
Long-term refundable income taxes		1,305		—
Other long-term assets		2,709		2,649
Total assets	$	395,288	$	361,672
Liabilities and Stockholders’ Equity
Accounts payable	$	28,952	$	29,912
Accrued employment costs		4,972		7,547
Current portion of long-term debt		—		3,000
Other current liabilities		1,788		966
Total current liabilities		35,712		41,425
Long-term debt		114,731		91,650
Deferred income taxes		52,038		48,291
Other long-term liabilities		172		—
Total liabilities		202,653		181,366
Stockholders’ equity		192,635		180,306
Total liabilities and stockholders’ equity	$	395,288	$	361,672

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CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW

	For the Six-Months Ended June 30,
	2012*			2011
Operating activities:
Net income	$	10,791		$	9,973
Adjustments to reconcile net income to net cash used in operating activities:
Depreciation and amortization		6,096			2,931
Deferred income tax		10,341			(211	)
Share-based compensation expense, net		672			745
Changes in assets and liabilities:
Accounts receivable, net		(6,293	)		(3,693	)
Inventory, net		(17,998	)		(13,408	)
Accounts payable		(4,825	)		2,048
Accrued employment costs		(2,575	)		(618	)
Income taxes		(1,222	)		743
Other, net		680			(252	)
Net cash used in operating activities		(4,333	)		(1,742	)
Investing activities:
Capital expenditures, net of amount included in accounts payable		(16,196	)		(3,672	)
Net cash used in investing activities		(16,196	)		(3,672	)
Financing activities:
Payment on term loan facility		(20,000	)		—
Borrowings under revolving credit facility		78,664			—
Payments on revolving credit facility		(38,583	)		—
Debt repayments		—			(1,416	)
Proceeds from the issuance of Common Stock		770			404
Payment of deferred financing costs		(348	)		—
Purchase of Treasury Stock		(233	)		—
Tax benefit from share-based payment arrangements		165			60
Net cash provided by (used in) financing activities		20,435			(952	)
Net decrease in cash		(94	)		(6,366	)
Cash at beginning of period		274			34,400
Cash at end of period	$	180		$	28,034
Supplemental Non-Cash Investing Activity:
Capital expenditures included in accounts payable	$	3,865		$	944

* Includes the results of the North Jackson operation, which was acquired on August 18, 2011.

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