.gif?width=220&height=200&mediaprotectionhash=b13da841472e6e7ed500ee35df2a350aaf53d75246118b33ea2095cc7e9a3fc4&ext=.gif)
Universal Stainless Reports 4th Quarter 2011 Results
01/30/2012 - Universal Stainless & Alloy Products, Inc. reported net income of $4.3 million on sales of $62.2 million for the fourth quarter, and net income of $18.1 million on record sales of $252.6 million for the full year of 2011.
Universal Stainless & Alloy Products, Inc. reported net income of $4.3 million on sales of $62.2 million for the fourth quarter, and net income of $18.1 million on record sales of $252.6 million for the full year of 2011.
Fourth Quarter Results — Net income of $4.3 million ($0.59 per diluted share), which compares to net income of $3.6 million ($0.52 per diluted share) in the year-ago fourth quarter, and net income of $3.9 million ($0.55 per diluted share) in the previous quarter (3Q-2011).
Current results include a $0.7 million after-tax loss attributable to the North Jackson operation that reduced EPS by $0.13 per diluted share. Excluding these North Jackson-related costs, fourth quarter net income was $5.0 million ($0.72 per diluted share). Third quarter 2011 results included $1.9 million ($0.28 per diluted share) in North Jackson-related acquisition and start-up expenses.
Sales of $62.2 million reflect a 21% increase from sales of $51.6 million in the fourth quarter of 2010, but were below the record of $67.3 million reached in the previous quarter (3Q-2011).
Operating income was $7.0 million and included $0.9 million of operating expense related to start-up of the North Jackson operation acquired in August 2011. Operating income compares to operating income of $5.5 million in the year-ago fourth quarter, and $7.2 million in the previous quarter (3Q-2011), which included $1.7 million of operating expense related to the acquisition and start-up of the North Jackson operation.
Full-Year Results — For full year 2011, net income rose 37% to $18.1 million ($2.56 per diluted share). Results included after-tax expense of $3.2 million ($0.51 per diluted share) related to the acquisition, financing and start-up of the North Jackson operation. Sales increased 33% over the same period to a record $252.6 million, which compares with sales of $189.4 million for 2010.
Operating Results — Cash flow from operations reached $9.6 million in the fourth quarter, and capital expenditures were $16.6 million, including $14.4 million for the North Jackson operation. At December 31, 2011, the company had cash of $0.3 million and total debt of $94.7 million, or 34.4% of total capitalization.
Shipment volume for the fourth quarter of 2011 increased 4% from the fourth quarter of 2010 but was 8% lower than the 2011 third quarter.
Management Comments — "End market trends remained favorable and our sales were strong in the fourth quarter, although they did not match the third quarter mainly due to customer receiving schedules shifting from December into the first quarter of 2012,” commented Chairman, President and CEO Dennis Oates. “Record order entry in the fourth quarter contributed to a new peak in our backlog of $102.6 million at quarter-end, including $14.0 million for our new North Jackson facility.
"Driving profitable growth remained a main focus in the quarter through higher-value sales mix, cost reduction and pricing actions. As a result, we achieved a consolidated operating margin on our legacy Universal business (before including North Jackson) of 12.8%, which was among the highest in the past four years, despite a continued decline in nickel prices.
"The accelerated start-up of North Jackson is on schedule. In December, our team completed first heats on our vacuum induction melting (VIM) furnace and on two newly installed vacuum arc remelting (VAR) furnaces.
"We have entered 2012 with positive market momentum, record backlog and a full focus on accelerating the ramp-up of our North Jackson operation to achieve further profitable growth."
Segment Review — For the fourth quarter of 2011, the Universal Stainless & Alloy Products segment, including the North Jackson operation, had sales of $49.2 million and operating income of $4.0 million, yielding an operating margin of 8.2% of sales. Before including the North Jackson operation, segment sales were $48.6 million and operating income was $4.9 million, or 10.1% of sales. This compares to sales of $46.1 million and operating income of $4.2 million (9.2% of sales) in the year-ago fourth quarter. For the third quarter of 2011, segment sales, including the North Jackson operation, were $60.6 million and operating income was $4.8 million (7.9% of sales). Before including North Jackson, segment operating income was $6.5 million (10.7% of sales).
Segment sales rose 7% from the fourth quarter of 2010 on 2% lower tons shipped mainly due to increased shipments to service centers. Segment sales were 19% lower than the 2011 third quarter on 14% lower volume mainly due to lower shipments to service centers and forgers.
Sales for the Dunkirk Specialty Steel segment were $24.5 million for the fourth quarter of 2011 and operating income was $2.5 million, yielding an operating margin of 10.1% of sales. This compares with sales of $17.1 million and operating income of $1.3 million (7.8% of sales) in the fourth quarter of 2010. In the previous quarter (3Q-2011), sales were $25.3 million and operating income was $2.5 million (9.9% of sales).
Dunkirk's sales increased 43% from the year-ago fourth quarter on a 34% increase in tons shipped, mainly due to increased shipments to service centers. Dunkirk's sales decreased 3% from the previous quarter (3Q-2011) on 5% lower tons shipped, mainly due to lower shipments to service centers and lower conversion pounds.
Headquartered in Bridgeville, Pa., Universal Stainless & Alloy Products 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.
