Jan. 20, 2006 — Universal Stainless & Alloy Products, Inc. reported net income of $3.6 million on sales of $42.0 million for the fourth quarter, and record net income of $13.1 million on record sales of $170.0 million for the full year 2005.

Fourth Quarter Results—The $3.6 million net income ($0.55 per diluted share) represents a 38% increase compared with net income of $2.6 million ($0.40 per diluted share) reported in the fourth quarter of 2004. Income included $358,000 of other income from the receipt of 2005 import duties, equivalent to $0.04 per diluted share; fourth quarter 2004 income included 2004 import duties of $507,000, equivalent to $0.05 per diluted share. Sales of $42.0 million reflect a 14% increase compared with $37.0 million in the same period of 2004.

Full Year Results—Record net income of $13.1 million ($2.02 per diluted share) reflects an 83% increase compared to 2004 net income of $7.1 million ($1.12 per diluted share). Income included import duties received in the fourth quarter, while 2004 net income included $1.1 million of other income from import duties ($0.11 per diluted share), reflecting the receipt of a substantial portion of the 2003 and 2004 import duties awarded to the company. Before including import duties in both periods, full year 2005 net income was double that of 2004.

Record sales of $170.0 million reflect a 41% increase compared with $120.6 million in 2004.

Comments—President and CEO Mac McAninch commented: "Our very strong fourth quarter capped a record year for our Company. Our niche markets of aerospace, power generation, petrochemical and tool steel were robust all year and current indications are they will remain strong in 2006. Our cost recovery pricing strategy continued to be both effective for us and fair to our customers given the ongoing volatility of raw material costs and high energy prices."

Mr. McAninch continued: "We also committed to further reinvest in our operations to increase throughput and efficiency at a time of acute customer need for our products, and to expand our capabilities to produce higher value-added products. We delivered on that promise with more than $8 million in capital improvements in 2005, including the addition of a vacuum-arc remelt furnace that became operational in December. In addition, we focused on process improvements throughout the year, especially at our Bridgeville and Titusville facilities which comprise the Universal Stainless and Alloy Products segment of our business. As a result, that segment achieved sales of $153 million in 2005, surpassing the company-wide record we achieved in 2004."

Business Outlook—The company estimates that first quarter 2006 sales will range from $40 to $45 million and that diluted EPS will range from $0.50 to $0.55. This compares with sales of $43.0 million and diluted EPS of $0.45 in the first quarter of 2005.

In developing these estimates, the company considered its current backlog, which approximated $116 million at December 31, 2005 compared to $106 million at September 30, 2005, reflecting continued strong aerospace, power generation, petrochemical and tool steel markets. The company expects production at the Bridgeville facility to benefit from the recent addition of a milling machine, the improvements achieved in bar manufacturing and the initial contribution of the newly installed vacuum-arc remelt furnace. The company also expects sales from the Dunkirk Specialty Steel segment to remain at the $13 to $14 million level because of the expectation that the manufacturing delays will not be resolved until the end of the quarter.

Mr. McAninch concluded: "Our goal in 2006 is to take further advantage of our strong marketplace through additional improvements in production processes and investment in our facilities, as we continue to focus on building value for our shareholders, customers and employees."

Headquartered in Bridgeville, Pa., Universal Stainless & Alloy Products manufactures and markets a broad line of semi-finished and finished specialty steels, including stainless steel, tool steel and certain other alloyed steels. The company's products are sold to rerollers, forgers, service centers, original equipment manufacturers and wire redrawers.