Universal Stainless & Alloy (USAP) Tops Q1 EPS by 13c, Revenues Beat

Universal Stainless & Alloy (NASDAQ: USAP) reported Q1 EPS of ($0.51), $0.13 better than the analyst estimate of ($0.64). Revenue for the quarter came in at $37 million versus the consensus estimate of $33.89 million.

• Q1 2021 Sales rise 18.2% sequentially to $37.0 million; Premium alloy sales up 26.6% from Q4 2020
• Q1 2021 Net Loss is $4.5 million, or $0.51 per diluted share; Net loss is $2.6 million, or $0.29 per diluted share, excluding $2.6 million (pre-tax) of fixed cost absorption charges
• Q1 2021 Adjusted EBITDA is $2.1 million; EBITDA is a loss of $0.7 million
• Quarter-end Backlog increases 21.0% to $58.0 million versus $48.0 million at end of Q4 2020

Chairman, President and CEO Dennis Oates commented: “We expected gradual improvement in activity levels in 2021, but our first quarter results point to even better momentum in end market demand, accompanied by a healthy pace of order entry and backlog growth for Universal.

“With the exception of General Industrial, all of our end markets reported double-digit sequential sales growth in the quarter. In total, our first quarter sales increased 18% sequentially including nearly 27% higher premium alloy sales, driven by strong aerospace demand especially for defense, and 36% higher tool steel sales for industrial and automotive applications.

“In the aerospace end market, we saw easing of destocking in the supply chain, coupled with accelerated rates of air travel. The prospects for recovery in the commercial aerospace market in 2021 remain intact.

“We have continued to align spending to current forecasted revenue and operating levels while we control working capital. Semi-fixed spending at our production facilities and general and administrative costs are down considerably year-over-year, thanks to our cost reduction efforts.

“A major strategic initiative for us in 2021 is capital investment in our premium alloy production assets, including adding a vacuum arc remelt furnace and an 18-ton crucible to expand our capabilities and reduce costs. These projects are on schedule for commissioning by the end of the year.”

Mr. Oates concluded: “Amid continuing recovery from the Covid pandemic, we have started 2021 on a positive footing. With the continued dedication of our team, the support of our customers and our commitment to providing critical products to our markets, we are focused on making further progress during the course of the year.”

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

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