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Universal Stainless announces net result for Q2 2014

Universal Stainless & Alloy Products Inc announced that net sales for the Q2 of 2014 were USD 52.3 million, an increase of 12% from the Q1 of 2014 and 22% higher than the Q2 of 2013. Sales of premium alloy products rose to USD 4.3 million, an increase of 58% sequentially and more than double their level in the Q2 of 2013. Premium alloy products represented 8% of total net sales in the 2014 Q2.

Compared with the Q1 of 2014, sales to the aerospace market increased 13%, power generation sales were up 21%, oil and gas market sales increased 27%, while heavy equipment market sales were lower by 7%. On a tons shipped basis, aerospace shipments increased 3% from the first quarter of 2014, power generation shipments were up 25%, shipments to the oil and gas market were level, and heavy equipment market shipments were lower by 9%. The Company’s backlog (before surcharges) has increased 30% from the start of this year to USD 61.0 million at the end of the second quarter.

The Company’s gross margin for the Q2 of 2014 continued to show strong improvement, reaching USD 8.4 million, or 16.1% of sales, compared with USD 6.1 million, or 13.0% of sales, in the Q1 of 2014 and USD 5.3 million, or 12.4% of sales, in the Q2of 2013.

Operating income for the Q2 of 2014 was USD 3.2 million, which is more than double operating income of USD 1.4 million in the Q1 of 2014 and up more than seven fold from operating income of USD 0.4 million in the Q2 of 2013.

The Company reported net income of USD 1.4 million, or USD 0.20 per diluted share, for the Q2 of 2014. That compares with a net loss of USD 0.5 million, or USD 0.07 per diluted share, in the Q1 of 2014, which included USD 0.12 of state tax charges, and net income of USD 0.5 million, or USD 0.06 per diluted share, in the Q2 of 2013, including USD 0.11 of tax benefits.

For the first six months of 2014, net sales increased 8% to USD 99.0 million compared with net sales of USD 92.0 million in the same period of 2013. Net income for the first six months of 2014 increased to USD 1.0 million, or USD 0.13 per diluted share, compared to net income of USD 0.5 million, or USD 0.06 per diluted share, in the first six months of 2013.

For the Q2 of 2014, the Company used USD 1.8 million in cash from operations for investment in working capital to support increased sales activity and operating levels. At June 30th 2014, total debt was USD 91.8 million, an increase of 4% from the end of the Q1 of 2014, largely as a result of the higher activity levels; however, total debt was lower by 11% from the Q2 of 2013. Debt to total capitalization was 31.5% at the end of the Q2 2014.

Mr Dennis Oates chairman, President and CEO of Universal Stainless & Alloy said that “Increasing demand in the aerospace market, which represents nearly 60% of our sales, was the main driver of the continued improvement in our second quarter performance, which also benefited from increased sales to the power generation and oil and gas markets. Premium product sales reached 8% of total sales, as we continued to execute our plan to move toward more advanced alloys.”

He said that “The favorable shift in our product mix combined with solid manufacturing activity levels, improved yields, lower scrap rates, and better matching of surcharges to material costs, all contributed to the strong step up in our gross margin for the quarter. With the recent approvals received from GE Aviation, which completed our certification by three of the world’s largest aircraft engine manufacturers, we have entered the third quarter on a positive footing.”

Source – Strategic Research Institute

(www.nctv.net)

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