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Universal Stainless Reports First Quarter 2011 Results
04/29/2011 - Universal Stainless & Alloy Products, Inc. reported that sales for the first quarter of 2011 were $59.8 million, an increase of 72% from the first quarter of 2010 and up 16% from the 2010 fourth quarter. Net income for the first quarter was more than triple the level of last year's first quarter and up 25% from the fourth quarter of 2010.
Universal Stainless & Alloy Products, Inc. reported that sales for the first quarter of 2011 were $59.8 million, an increase of 72% from the first quarter of 2010 and up 16% from the 2010 fourth quarter.
Net income for the first quarter of 2011 was $4.4 million, or $0.64 per diluted share, which was more than triple the level of the first quarter of 2010 and up 25% from the fourth quarter of 2010. Business development expenses of $0.4 million pre-tax, equivalent to $0.04 per fully diluted share, were included in the first quarter 2011 results.
The company recorded negative cash flow from operations of $1.7 million due to continuing investment in managed working capital to support increased sales activity and backlog. Capital expenditures for the first quarter of 2011 were $2.2 million. At March 31, 2011, the company had cash of $30.5 million and total debt of $10.1 million.
Total shipment volume for the first quarter of 2011 increased 54% from the year-ago first quarter and 15% from the previous quarter. Compared with the fourth quarter of 2010, volume shipped to the aerospace market increased 26%, service center plate shipments increased 71%, and petrochemical volume rose 7%. Shipments to the power generation market were 6% lower than the record level in the fourth quarter.
Executive Comments — Chairman, President and CEO Dennis Oates said: "Robust business activity across all end markets led to strong first quarter growth including record consolidated bookings and record Dunkirk segment shipments. Activity levels reflected increasing confidence and higher build rates in aerospace, continued strong repair and maintenance spending in power generation, additional oil and gas exploration, and recovery in supply channel demand for tool steel. Our focus remains on driving profitable growth through further operational improvement and seizing market opportunities."
Segment Review — For the first quarter of 2011, the Universal Stainless & Alloy Products segment had sales of $55.2 million and operating income of $4.9 million, yielding an operating margin of 8.9% of sales. This compares with sales of $31.2 million and operating income of $1.9 million, or 6.2% of sales, in the first quarter of 2010. In the fourth quarter of 2010, sales were $46.1 million and operating income was $4.2 million, or 9.2% of sales.
Segment sales rose 77% from the first quarter of 2010 on a 65% increase in tons shipped mainly due to higher shipments to rerollers, destined mostly for the aerospace market, the company noted. Segment sales rose 20% from the fourth quarter of 2010 on a 20% increase in tons shipped due to higher shipments to service centers and forgers.
Sales for the Dunkirk Specialty Steel segment reached a record $22.0 million for the first quarter of 2011 and operating income was $2.3 million, yielding an operating margin of 10.6% of sales. This compares with sales in the first quarter of 2010 of $10.1 million and operating income of $0.3 million, or 3.2% of sales. In the fourth quarter of 2010, sales were $17.1 million and operating income was $1.3 million, or 7.8% of sales.
Dunkirk's sales increased 118% from the first quarter of 2010 on a 96% increase in tons shipped mainly due to more-than-double the shipments to service centers. Dunkirk's sales increased 28% from the fourth quarter of 2010 on a 30% increase in tons shipped, also mainly due to higher shipments to service centers.
