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): May 18, 2018

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))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR §230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR §240.12b-2).

Emerging growth company  ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ☐

Item 1.01. Entry into a Material Definitive Agreement.

On May 18, 2018, Universal Stainless & Alloy Products, Inc. (the “Company”) entered into a letter agreement with PNC Bank, National Association, as a lender and as administrative agent and co-collateral agent, and Bank of America, N.A., as a lender and as co-collateral agent, with respect to the Company’s revolving credit, term loan and security agreement (the “Letter Agreement”). Pursuant to the terms of the Letter Agreement, the first $30.0 million of any net cash proceeds received by the Company from the issuance of equity securities through and including June 30, 2018 will be applied (i) first, to the outstanding principal amount under the Company’s senior secured revolving credit facility, (ii) second, to the outstanding principal amount under the Company’s senior secured term loan facility and (iii) third, to any remaining amounts outstanding under the Company’s senior secured credit facility. The Letter Agreement also provides that the Company’s borrowing availability under the Company’s senior secured revolving credit facility will be reduced after any such application of net proceeds from the issuance of equity securities by an amount equal to 50% of any such net cash proceeds that are applied to the outstanding principal amount under the Company’s senior secured revolving credit facility.

The foregoing is a description of the material terms and conditions of the Letter Agreement and is not a complete discussion of the Letter Agreement. Accordingly, the foregoing is qualified in its entirety by reference to the full text of the Letter Agreement, which is filed as Exhibit 10.1 to this Current Report on Form 8-K and incorporated herein by reference.

Item 8.01. Other Events.

Public Offering

On May 24, 2018, the Company issued a press release announcing its intention to offer shares of the Company’s common stock, $0.001 par value per share, in an underwritten public offering. The Company’s press release announcing this intention is filed as Exhibit 99.1 to this Current Report on Form 8-K and incorporated herein by reference.

Investor Presentations

The investor presentation slides filed as Exhibit 99.2 to this Current Report on Form 8-K have been prepared for investor presentations made by senior management of the Company from time to time and are incorporated herein by reference. The slides will be available on the Company’s website at www.univstainless.com. Information contained on the Company’s website is not incorporated by reference into this Current Report on Form 8-K.

Item 9.01. Financial Statements and Exhibits.

(d) Exhibits.

10.1	Letter Agreement, dated May 18, 2018, among Universal Stainless  & Alloy Products, Inc., the other borrowers party thereto, PNC Bank, National Association, as a lender and as administrative agent and co-collateral agent, and Bank of America, N.A., as a lender and as co-collateral agent.
99.1	Press Release dated May 24, 2018.
99.2	Investor presentation slides.

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/ Paul A. McGrath
	Paul A. McGrath
	Vice President of Administration,
	General Counsel and Secretary

Dated: May 24, 2018

EX-10.1

Exhibit 10.1

May 18, 2018

Universal Stainless & Alloy Products, Inc.

600 Mayer Street

Bridgeville, PA 15017

Attention: Mr. Christopher T. Scanlon, Chief Financial Officer

Re: Credit facility provided to Universal Stainless & Alloy Products, Inc., a Delaware corporation (“Universal”), Dunkirk Specialty Steel, LLC, a Delaware limited liability company (“Dunkirk”) and North Jackson Specialty Steel, LLC, a Delaware limited liability company (“North Jackson”) (Universal, Dunkirk and North Jackson, collectively, the “Borrowers”, and each a “Borrower”), by PNC Bank, National Association (“PNC”), various other financial institutions from time to time (PNC and such other financial institutions are each a “Lender” and collectively, the “Lenders”), PNC, as administrative agent for the Lenders (in such capacity, the “Administrative Agent”) and PNC and Bank of America, N.A., as co-collateral agents for the Lenders (collectively, the “Co-Collateral Agents”)

Dear Mr. Scanlon:

Reference is made to that certain Revolving Credit, Term Loan and Security Agreement, dated as of January 21, 2016, by and among the Borrowers, the Lenders party thereto, the Administrative Agent and the Co-Collateral Agents (as amended, modified, supplemented or restated from time to time, the “Credit Agreement”). Capitalized terms used herein and not otherwise defined shall have the meanings assigned to them in the Credit Agreement.

Notwithstanding the provisions of Section 2.20(b) to the Credit Agreement, the Borrowers, the Administrative Agent and the Lenders hereby agree that (i) any net cash proceeds received by any Loan Party on or after the date of this letter through and including June 30, 2018 that are required to be repaid by such Loan Party and applied to the Advances pursuant to Section 2.20(b) of the Credit Agreement (other than net cash proceeds received in respect of the issuance or other incurrence of Indebtedness), in an aggregate amount not to exceed $30,000,000.00, shall be applied (x) first, to the outstanding principal amount of the Revolving Advances, (y) second, to the outstanding principal installments of the Term Loan in the inverse order of the maturities thereof and (z) third, to the remaining Advances in such order as Administrative Agent may determine and (ii) the Co-Collateral Agents shall institute reserves pursuant to sub-clause (v) of clause (y) of Section 2.1(a)(A) of the Credit Agreement in an amount equal to fifty percent (50%) of any net cash proceeds received and applied to the Revolving Advances pursuant to the foregoing clause (i).

The agreements and consents contained herein shall be limited to the specific agreements and consents made herein. Except as otherwise modified herein, all other terms and conditions of the Credit Agreement and the other Loan Documents continue in full force and effect and are unmodified by this letter.

If the foregoing terms and conditions are acceptable to you, please indicate your acceptance by signing in the spaces indicated below. This letter agreement shall constitute a rider to and form a part of the Credit Agreement, as the same may be amended, modified or supplemented from time to time.

PNC Bank, National Association, as a Lender, as Administrative Agent and as Co-Collateral Agent
By:	/s/ Michael Etienne
Name:	Michael Etienne
Title:	Senior Vice President

Bank of America, N.A., as a Lender and as Co-Collateral Agent
By:	/s/ Susanna Profis
Name:	Susanna Profis
Title:	Senior Vice President

Consented and agreed to as of the first datewritten above:

Universal Stainless & Alloy Products, Inc.
By:	/s/ Christopher T. Scanlon
Name:	Christopher T. Scanlon
Title:	CFO and Treasurer

Dunkirk Specialty Steel, LLC
By:	/s/ Christopher T. Scanlon
Name:	Christopher T. Scanlon
Title:	Executive Officer

North Jackson Specialty Steel, LLC
By:	/s/ Christopher T. Scanlon
Name:	Christopher T. Scanlon
Title:	Treasurer

EX-99.1

Exhibit 99.1

CONTACTS:	Dennis Oates	Christopher T. Scanlon	June Filingeri
	Chairman,	VP Finance, CFO	President
	President and CEO	and Treasurer	Comm-Partners LLC
	(412) 257-7609	(412) 257-7662	(203) 972-0186

FOR IMMEDIATE RELEASE

UNIVERSAL STAINLESS ANNOUNCES COMMON STOCK OFFERING

BRIDGEVILLE, PA, May 24, 2018 — Universal Stainless & Alloy Products, Inc. (the “Company”) (Nasdaq: USAP) announced today its intention to offer, subject to market and other conditions, shares of common stock in an underwritten registered public offering. The Company expects to grant the underwriter a 30-day option to purchase additional shares of common stock in an amount up to 15% of the number of shares of common stock to be offered.

The Company intends to use the net proceeds from the offering to repay amounts outstanding under the Company’s senior secured revolving credit facility.

Cowen and Company, LLC is acting as the sole book-running manager for the offering.

The offering of these securities is being made pursuant to an effective shelf registration statement. The offering will be made only by means of a prospectus supplement and the accompanying prospectus. Copies of the preliminary prospectus supplement and the accompanying prospectus may be obtained by sending a request to: Cowen and Company, LLC, c/o Broadridge Financial Services, 1155 Long Island Avenue, Edgewood, NY 11717, Attention: Prospectus Department, or by telephone at (631) 274-2806 or by accessing the SEC’s website, www.sec.gov.

This news release shall not constitute an offer to sell or a solicitation of an offer to buy, nor shall there be any sale of these securities in any state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction.

About Universal Stainless & Alloy Products, Inc.

The Company, established in 1994 and headquartered in Bridgeville, PA, manufactures and markets semi-finished and finished specialty steels, including stainless steel, nickel alloys, tool steel and certain other alloyed steels. The Company’s products are used in a variety of industries, including aerospace, power generation, oil and gas, and heavy equipment manufacturing. 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 Company’s ability to maintain its relationships with its significant customers and market segments; the Company’s response to competitive factors in its industry that may adversely affect the

market for finished products manufactured by the Company or its customers; the Company’s ability to compete successfully with domestic and foreign producers of specialty steel products and products fashioned from alternative materials; the demand for the Company’s products and the prices at which the Company is able to sell its products in the aerospace industry, from which a substantial amount of our sales is derived; the Company’s ability to develop, commercialize, market and sell new applications and new products; the receipt, pricing and timing of future customer orders; the impact of changes in the Company’ product mix on the Company’s profitability; the Company’s ability to maintain the availability of raw materials and operating supplies with acceptable pricing; the availability and pricing of electricity, natural gas and other sources of energy that the Company needs for the manufacturing of its products; risks related to property, plant and equipment, including the Company’s reliance on the continuing operation of critical manufacturing equipment; the Company’s success in timely concluding collective bargaining agreements and avoiding strikes or work stoppages; the Company’s ability to attract and retain key personnel; 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 matters; the Company’s ability to meet its debt service requirements and to comply with applicable financial covenants; risks associated with conducting business with suppliers and customers in foreign countries; risks related to acquisitions that the Company may make; the Company’s ability to protect its information technology infrastructure against service interruptions, data corruption, cyber-based attacks or network security breaches; the impact on the Company’s effective tax rates of changes in tax rules, regulations and interpretations in the United States and other countries where it does business; and the impact of various economic, credit and market risk uncertainties. Many of these factors are not within the 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.

# # #

EX-99.2

Investor Presentation

Growing Advanced Alloys

May 2018

NASDAQ: USAP

Exhibit 99.2

univstainless.com

© Copyright 2018 Universal Stainless & Alloy Products, Inc. All Rights Reserved.

Forward Looking Statement

Except for historical information contained herein, the statements in this presentation 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 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.

Non-GAAP Financial Measures

Some of the information included in this presentation is derived from the Company’s consolidated financial

information but is not presented in the Company’s financial statements prepared in accordance with U.S.

Generally Accepted Accounting Principles (GAAP). Some of this data is considered “non-GAAP financial

measures” under SEC rules. These non-GAAP financial measures supplement our GAAP disclosures and should

not be considered an alternative to the GAAP measure. Reconciliation to the most directly comparable GAAP

financial measure is provided.

2

Universal Stainless At a Glance

•

Leading manufacturer of specialty steel

products focused on creating sustainable

value for all stakeholders

•

Fully integrated and geographically

contiguous operations designed to ensure

quality and consistency of products to meet

customer demands

•

Products are specifically tailored to address

the aerospace, heavy equipment / auto, power

generation and oil & gas markets through

service centers, OEMs, forgers and rerollers

3

Overview

© Copyright 2018 Universal Stainless & Alloy Products, Inc. All Rights Reserved.

Semi-Finished Products

Semi-Finished Products

Finished Products

Finished Products

Sales by End Market

Q1 2018

2017

2017

Q1 2018

Sales by Customer Type

Company History —

Transformational Acquisitions;

Expansion in Premium Alloys Unfolding

4

Acquired Bridgeville, PA Facility

•

Company

was

founded

in

conjunction

with

the

acquisition

of

the Bridgeville Facility

•

Capabilities included melting

and rolling semi-finished

specialty steel products

Acquired Titusville, PA Facility

•

Expanded production

capability

for aerospace and

power generation applications

Acquired

Dunkirk, NY Facility

•

Purchase of a finishing facility

transformed the Company into a

fully integrated manufacturer

of specialty steel products

Acquired North Jackson, OH Facility

•

Construction-stage

facility

with

state-of-the-art

radial

forge,

Vacuum Induction Melting (VIM) furnace, Vacuum Arc Remelting

(VAR) furnaces and other heat treating / finishing equipment —

now

fully

operational

•

Fast-tracks

the

Company’s

move

toward

technologically

advanced

alloys

for

aerospace,

power

generation

and

oil

&

gas

markets; accelerates profit growth

Poised for Growth

•

USAP

continues

to

grow

premium alloy sales and is

focused on margin expansion

through

process integration and

improving product mix

•

Significant additional available

capacity

to deliver growth

© Copyright 2018 Universal Stainless & Alloy Products, Inc. All Rights Reserved.

Strategic Objectives

5

Grow our portfolio of technologically advanced, higher-margin alloys

Increase and broaden penetration in key, growing end markets

Optimize Universal’s integrated manufacturing system

Targeted capital investment

Relentless focus on operational improvement

Expand targeted customer approvals for new products

1

5

6

2

3

4

© Copyright 2018 Universal Stainless & Alloy Products, Inc. All Rights Reserved.

Increase USAP Margins

•

Improve cycle times, yields company-wide

•

Reduce 3rd party costs with internal forge & finish capability

•

Eliminate capacity constraints in re-melting

•

Move up value chain with Vacuum Induction Melting (VIM) of

technologically advanced premium metals

•

Expand product and tolling reach with advanced radial hydraulic

forging technology

Expand Addressable Markets

•

Selected premium alloy markets in aerospace, power generation, 

oil & gas & high end manufacturing

•

Larger and longer squares, rounds, bars and custom shapes

•

International markets

Excel in Industry Lead-times and Customer Service

Acquisition of North Jackson —

Fast Track Key Strategic Initiatives

6

New Customer Approvals Received

2016 —

2017:

38

New Products Under Development

as of the end of Q1 2018:

14

Premium Alloys as Percentage

Sales:

New Products Developed

January 2017 through Q1 2018:

14

Q1 2018

2017

13.5%

18.6%

1

2

3

© Copyright 2018 Universal Stainless & Alloy Products, Inc. All Rights Reserved.

Moving Toward Higher-Value Alloys

7

1.

Premium alloys represent all Vacuum Induction Melted (VIM) products.

Acquisition of North Jackson in 2011

•

State-of-the-art hydraulic radial forge; VIM furnace

•

Added key capabilities in aerospace, power

generation and oil & gas applications

o

Successful market entry into aerospace parts,

landing gear, helicopter rotor masts and gears, and

drill shafts for oil & gas applications

Continue to Penetrate Key End Markets

•

Opportunity for continued growth in aerospace due

to a more comprehensive product offering

•

Oil & gas presents an upside opportunity given

market recovery

•

Growth in high end industrial applications and

infrastructure

Premium Alloys to Drive Margin Accretion

•

Continued growth in higher-value premium alloy

sales expected to be accretive to gross margin

Strong Momentum for Premium Alloys

•

Accelerated sales growth for Q1 2018 premium

alloys, which grew 83.2% compared with Q1 2017,

contributed to overall sales growth

© Copyright 2018 Universal Stainless & Alloy Products, Inc. All Rights Reserved.

© Copyright 2018 Universal Stainless & Alloy Products, Inc. All Rights Reserved.

Integrated Manufacturing Process

8

*AOD: Argon Oxygen Decarburization

VIM: Vacuum Induction Melting

VAR: Vacuum-Arc Remelting

ESR: Electro-Slag Remelting

VIM

AOD

VAR

ESR

Primary Melt / Remelt*

Primary Melt / Remelt*

Rotary Forge

Large Diameter Forged Bar

Rolling Mill

Reroll /

Forging

Billet

Plate

Bloom

Bar

Bridgeville / North Jackson / Dunkirk

Hot Working

Hot Working

Bridgeville / North Jackson / Titusville

Bar

Rod & Wire

Shapes

Dunkirk / North Jackson

Titusville

Finishing

Finishing

Specialty Shapes

Specialty Shapes

•

Delivering a broad set of product offerings starting from either VIM or AOD melt capability

•

Consistent operating model; integrated quality systems; sharing best practices

Business Model Provides Unique Leverage to

Market Improvements

9

Unique Leverage to Market Recoveries

•

A majority of sales are made to service centers,

forgers and re-rollers

•

Higher concentration of service center sales

translates into greater benefit in recovering markets

Representative Customers —

Direct and Indirect

Sales by Customer Type

Delivering Growth in 2018

•

Aerospace market is strong; increasing optimism

among oil & gas customers; tool steel plate market

remains healthy

•

Q1 2018 sales of $63.7 million up 30.4% from Q1

2017

•

Q1 2018 backlog of $90.6 million, up 16.7%

sequentially, and up 58.8% from Q1 2017

o

Highest backlog levels since Q2 2012

•

Bookings at the highest level since Q1 2012

2017

Q1 2018

Service

Centers

(69%)

Rerollers

(12%)

OEM

(8%)

Forgers

(9%)

Other

(2%)

Rerollers

(13%)

OEM

(7%)

Forgers

(8%)

Other

(2%)

Service

Centers

(70%)

© Copyright 2018 Universal Stainless & Alloy Products, Inc. All Rights Reserved.

End Markets —

Overview

10

Aerospace

Aerospace

•

Airbus / Boeing record backlog equal to

~8 years of production

1

•

Passenger traffic growth rate at record

levels, driving aftermarket demand

•

Industry and our customers are healthy

•

Expanding OEM participation

•

Light vehicle production levels are

expected to remain strong

•

Off-road equipment sector in strong

recovery

•

Tool steel requirements expected to

continue shift to domestic supply

•

Natural gas continues to supplant coal

as a source of electricity generation

•

Solid maintenance business on higher

utilization

•

Short term weakness in new turbine

market as evidenced by recent GE &

Siemens announcements

Power Generation

Power Generation

•

Increasing customer optimism in

improving market with stronger oil prices

($60+ per barrel), growing US rig count

and better international outlook

•

Uptick in oil & gas demand represents

an upside opportunity

Oil & Gas

Oil & Gas

Sales by Customer

Type Q1 2018

Source:

Wall Street research, Boeing, Airbus.

1.

Years of production is calculated by adding the total backlog for Boeing and Airbus and dividing by the cumulative average annual production for 2018E-2020E

© Copyright 2018 Universal Stainless & Alloy Products, Inc. All Rights Reserved.

Heavy Equipment / Auto

End Markets —

Aerospace

11

Source:

Wall Street research, IATA, Boeing Current Market Outlook 2017-2036.

1.

Revenue per Kilometers figures are estimates based on historical figures and forecasted RPK growth rates.

Robust Aircraft Delivery Schedule

The USAP Opportunity

•

Aircraft production growth rates, combined with new

customer approvals, are driving increased demand for

premium alloys from USAP

•

USAP’s alloys are used across a variety of aircraft

applications, from the airframe to the engines

Aerospace Market Remains Robust

•

Airbus and Boeing delivery schedules expected to

continue

recent

growth

—

combined

backlog

is

equal

to

~8 years of production

•

Passenger traffic remains strong, growing above

expectations in 2017, which is driving strong aftermarket

demand for specialty metals

•

Defense spending supports specialty metal demand

Illustrative Product Applications in Aero

Passenger Traffic Growth Remains Strong (RPK)

1

Landing

Gear

Hinges &

Actuators

Rings &

Casings;

Bearings

Hydraulic

Systems

Forged

Titanium

Components

Lavatory

Flush

Systems

1

1

2

2

3

3

4

4

5

5

6

6

635

688

718

761

833

762

748

763

813

850

1,397

1,436

1,481

1,574

1,683

0

500

1,000

1,500

2,000

2015

2016

2017

2018E

2019E

Airbus

Boeing

(Boeing and Airbus Deliveries)

4.6

4.6

4.9

5.3

5.6

5.9

6.2

6.7

7.1

7.6

8.0

8.4

17.8

0.0

2.0

4.0

6.0

8.0

10.0

'08

'09

'10

'11

'12

'13

'14

'15

'16

'17

'18E

'19E

'36E

(RPKs

in trillions)

© Copyright 2018 Universal Stainless & Alloy Products, Inc. All Rights Reserved.

18.0

U.S. Light Vehicle Population and Avg Vehicle Age

End Markets —

Heavy Equipment / Auto

Source: Wall Street Research, U.S. Bureau of Economic Analysis, Light Weight Vehicle Sales retrieved from Federal Reserve Bank of St. Louis as of December 2017.

Robust U.S. Light Vehicle Sales

The USAP Opportunity

•

While opportunity for tool steel is primarily driven by the

auto sector, off-road / large vehicles also require significant

tooling

•

Demand for tool steel is heavily correlated with cadence of

new

model

introductions

—

new

models

require

OEMs

to

re-tool factories

•

Higher unit production levels also drive demand, as re-

tooling is required for existing models

Positive Demand Dynamics for Tool Steel

•

New model introductions are expected to accelerate in the

next few years, bolstering tool steel demand

•

Strong levels of North American light vehicle production FY

2017 at 17.2 million units; 16% greater than the ten year

average production rate

•

Average age of light vehicles continues to increase.

However, this is expected to plateau given anticipated ramp

in future light vehicle sales

•

Significant recovery in off-road equipment sales in 2017

(i.e. Caterpillar)

•

Share capture from imported tool steel product

12

© Copyright 2018 Universal Stainless & Alloy Products, Inc. All Rights Reserved.

End Markets —

Oil & Gas

13

The USAP Opportunity

•

Oil & gas sales have accounted for ~10% of revenue

since 2013 —

customer optimism continues to

increase

•

Expanded North Jackson high-value product offering;

positioned to seize opportunities in oil & gas market

Oil & Gas Showing Signs of Recovery, but 

Remains Below 2014 Highs

•

Current oil prices in $60+/bbl range recently up ~50%

since bottoming in 2016

•

Firmer commodity prices are driving higher rig counts

and drilling activity; year-end 2017 US rig count up

72.4% vs. PY

Source: Wall Street research, Capital IQ, Baker Hughes, U.S. EIA and Bloomberg Estimates as of April 2018.

1.

2006-2016 Average Rig Count is the sum of the average weekly and monthly rig counts for the U.S. and Canada, respectively. 2017-2020E sourced through Wall Street research.

© Copyright 2018 Universal Stainless & Alloy Products, Inc. All Rights Reserved.

End Markets —

Power Generation

14

Source:

Capital

IQ,

U.S.

Energy

Information

Administration

Annual

Energy

Outlook

–

Reference

Case

(2017),

Bloomberg

Estimates

as

of

April

2018.

The USAP Opportunity

•

Continued emphasis on increased efficiency and

reduced emissions necessitate higher operating

temperatures and therefore more advanced alloys

•

USAP’s specialty and premium alloys are used in

critical gas-powered turbine components

Shift Toward Natural Gas Power Generation

•

Natural gas continues to supplant coal as a leading fuel

for electricity generation, led by demand from the

industrial and electric power sectors

•

By 2040, natural gas is expected to account for nearly

40% of U.S. power generation

•

Current demand is driven primarily by maintenance

business —

upside potential from new turbine market in

the long term

© Copyright 2018 Universal Stainless & Alloy Products, Inc. All Rights Reserved.

Natural Gas Prices Support Shift to Gas Turbines

Universal Stainless —

Advancing Our Position to

Serve Clients and Achieve Profitable Growth

Successful progress in strategy execution has

strengthened operations, expanded product offerings

Transformative acquisition

of North Jackson expands

addressable markets + moves up value chain in products

Growing ability to capture aerospace, oil & gas, and power

generation opportunities and better serve all end markets

Commitment to responsible capital investment supported

by solid operating cash flow and balance sheet

Experienced management team relentlessly focused on

operational improvement, customer service, profitable growth

15

© Copyright 2018 Universal Stainless & Alloy Products, Inc. All Rights Reserved.

Financial Performance

Review

univstainless.com

Historical Financial Performance

17

•

Net sales increase of 30.4% for Q1 2018 driven by

improvements in nearly all end markets compared

with PY

•

Accelerated sales growth for Q1 2018 premium

alloys, which grew 103.1% compared with Q1 2017,

contributed to overall sales growth

•

Improved average dollar per ton shipped in FY 2017

was primarily a result of increased sales of higher

value premium alloys

© Copyright 2018 Universal Stainless & Alloy Products, Inc. All Rights Reserved.

© Copyright 2018 Universal Stainless & Alloy Products, Inc. All Rights Reserved.

Historical Financial Performance (Cont.)

18

•

Increase in Q1 2018 EBITDA driven by top-line

growth, operational productivity enhancements,

improved operating leverage and favorable product

mix

•

Capex remains focused on high-return manufacturing

enhancements and maintenance projects

•

In Q1 2018 Cash Flow from Ops was impacted by an

increase in working capital to support topline growth

o

Increased sales drove $8.6 million in Accounts

Receivables

o

Inventory increased $3.8 million on increased backlog

1.

See page 23 for reconciliation to GAAP Net Income.

2.

Represents Long-Term Debt plus Current Portion of Long-Term Debt less Deferred Financing Costs. Q1 ’18 includes Long-Term NMTC Liability of $3.0m

© Copyright 2018 Universal Stainless & Alloy Products, Inc. All Rights Reserved.

Gross Margin %

Commodity Price Per Pound

Commodities & Gross Margin %

19

•

Gross margin increase in recent quarters was primarily attributable to operational productivity

enhancements, improved operating leverage combined with significant improvement in the alignment

of customer surcharges and commodity input costs

•

Recent increases in core commodities resulted in improved alignment of input costs and customer

surcharges

•

Gross margin for the full year of 2017 negatively impacted by temporarily higher maintenance and

outsourcing costs, as well as impact of facility fires in second half of year

Source: Internal Company Commodity Analysis.

Misalignment of input costs and customer surcharges

Low volumes / poor operating leverage

-

0.02

0.04

0.06

0.08

0.10

0.12

0.14

0.16

0.18

$0.20

-

2

4

6

8

10

12

$14

Mar-16

Jul-16

Nov-16

Mar-17

Jul-17

Nov-17

Mar-18

Nickel (left)

Moly (left)

Iron Scrap (right)

15.6%

10.2%

10.5%

-0.9%

-2.8%

3.4%

10.6%

11.9%

9.1%

8.7%

13.6%

10.7%

12.3%

14.5%

-5.0%

0.0%

5.0%

10.0%

15.0%

20.0%

2014

Q1

'15

Q2

'15

Q3

'15

Q4

'15

Q1

'16

Q2

'16

Q3

'16

Q4

'16

Q1

'17

Q2

'17

Q3

'17

Q4

'17

Q1

'18

© Copyright 2018 Universal Stainless & Alloy Products, Inc. All Rights Reserved.

Universal Stainless —

A Leader in Specialty Metals

20

Leading Manufacturer of Specialty Steel Products

Fully Integrated, Geographically Contiguous Operations

Improve Supply Chain Efficiency

Transitioning to Higher-Value Premium Alloy Sales

Well-Positioned to Further Penetrate Attractive End

Markets

Meaningful Leverage to Improving Market Environment

Significant Financial Flexibility Provided by Recent

Refinancing

Experienced Management Team Relentlessly Focused on

Operational Improvement, Customer Service and Safety

© Copyright 2018 Universal Stainless & Alloy Products, Inc. All Rights Reserved.

Appendix

univstainless.com

Adjusted EBITDA Reconciliation to GAAP Net Income

22

Adjusted EBITDA is not a recognized term under GAAP and does not purport to be an alternative to our net (loss) income determined in accordance with GAAP.  We believe that Adjusted EBITDA provides

information that is useful to investors because it allows for a more direct comparison of our performance for the period reported with our performance in prior periods. Because all companies do not use identical

calculations, the presentation of our Adjusted EBITDA may not be comparable to similarly titled measures of other companies.

($ in thousands)

2010

2011

2012

2013

2014

2015

2016

2017

Q1 2017

Q1 2018

Net (loss) income

$13,242

$18,122

$14,617

($4,062)

$4,050

($20,672)

($5,347)

$7,610

($1,219)

$2,125

Interest expense

435

1,265

2,284

2,598

3,035

2,324

3,659

4,022

939

1,142

Provision (benefit) for income taxes

6,821

10,356

6,334

(2,504)

3,149

(12,144)

(3,526)

(7,601)

(262)

777

Depreciation and amortization

5,486

8,851

14,368

16,280

17,476

18,608

18,533

18,823

4,717

4,756

EBITDA

$25,984

$38,594

$37,603

$12,312

$27,710

($11,884)

$13,319

$22,854

$4,175

$8,800

Adjustments to EBITDA

Share-based compensation expense

1,819

1,580

1,649

1,827

2,082

1,865

1,405

1,564

534

326

Write-off of deferred financing costs

-

-

-

-

-

-

768

-

-

-

Goodwill impairment

-

-

-

-

-

20,268

-

-

-

-

Adjusted EBITDA

$27,803

$40,174

$39,252

$14,139

$29,792

$10,249

$15,492

$24,418

$4,709

$9,126

© Copyright 2018 Universal Stainless & Alloy Products, Inc. All Rights Reserved.

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