Universal Stainless & Alloy (USAP) Tops Q2 EPS by 1c, Revenues Beat

Universal Stainless & Alloy (NASDAQ: USAP) reported Q2 EPS of ($0.27), $0.01 better than the analyst estimate of ($0.28). Revenue for the quarter came in at $52.5 million versus the consensus estimate of $47.89 million.

• Q2 2020 Sales total $52.5 million; Premium alloy sales rise 62.3% sequentially
• Q2 2020 Net Loss of $3.3 million, or $0.38 per diluted share; Net loss of $2.4 million, or $0.27 per diluted share, excluding charges in response to the COVID-19 pandemic
• EBITDA totals $1.4 million in Q2 2020
• Quarter-end Backlog of $71.8 million versus $110.7 million at end of Q1 2020
• Q2 2020 cash flow from operations totaled $7.4 million

Chairman, President and CEO Dennis Oates commented: “The COVID-19 pandemic continues to cause dislocation in the metals supply chain, as it takes a further sharp toll on end market demand, especially in aerospace and oil & gas.

“In aerospace, the decrease in aircraft production rates has been further impacted by reduced air travel causing airlines to cancel and delay orders for new airplanes. Aftermarket demand declined in the quarter due to the significant reduction in air traffic which began in March. While defense market sales remained strong, demand and related sales levels from the aerospace and oil and gas markets remain under extreme pressure.

“Our premium alloy sales increased 62.3% from the first quarter to $12.4 million, nearing the record level achieved in the second quarter of 2019. Premium alloys remain our highest priority for targeted growth and we continue to gain traction with new products and approvals, with underlying demand coming from defense and specialty applications. Tool steel sales remained solid in the second quarter, while sales to the general industrial market grew 27.7% from the first quarter.

“Even with the areas of strength in the second quarter, our current order entry and backlog point to a sequential step-down in quarterly sales and operating activity for the balance of the year.

“We are adapting our operations to lower activity levels, aggressively reducing costs, and generating cash. As a result, our current cost structure is in-line with our forecasted revenues and operating levels. We will continue to review demand and operating levels as the markets we serve continue to evolve.”

For earnings history and earnings-related data on Universal Stainless & Alloy (USAP) click here.

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