Recycling Today archives
Bridgeville, Pennsylvania-based Universal Stainless & Alloy Products Inc. reports third quarter sales and income well above what the company experienced a year ago and slightly above figures from the previous quarter.
The company's third quarter net sales of $71.3 million represents an increase of 3 percent from $69 million in sales from the prior quarter. The figure is up by 54 percent from sales in the third quarter of 2022, when the company was still recovering from a liquid metal spill that idled its melt shop in Bridgeville.
For the first nine months of the year, net sales at Universal have increased by 41 percent to $206.2 million from $145.9 million in the same period of 2022, again partially because of last year’s idle stretch.
The company’s net income of $1.9 million more than doubled in the third quarter of this year compared with the prior quarter, while the firm lost $1.3 million in the third quarter of 2022 as it recovered from the melt shop incident.
“We continued to meet our growth plan for the third quarter with sales of $71.3 million—the second highest ever, gross margin expansion to 15.2 percent, a doubling of our net income sequentially to $1.9 million, or 20 cents per diluted share, and a 20 percent increase in adjusted earnings before interest, taxes, depreciation and amortization (EBITDA), which was one and a half times greater than in the third quarter a year ago,” says Dennis Oates, president and CEO of Universal Stainless
“Our profitability benefitted from a richer product mix and higher prices, even as we experienced negative surcharge misalignment due to falling commodity prices.”
The company’s ability to sell more product comes during a year when the overall stainless steel sector has been producing and selling less product globally, according to the Brussels-based World Stainless Association.
At Universal, Oates says specialty alloys have played a role. “We also grew premium alloy sales compared to the second quarter, and our aerospace sales achieved a record $54 million,” he says. “Demand for our products remains robust, and we have a substantial book of business extending through 2024, with 37 percent of our backlog consisting of premium alloys.”
The metals producer says its backlog book, before surcharges, at the end of September was at a robust level of $345 million, compared with $355 million June 30 and $246 million Sept. 30, 2022. Universal's average selling price per pound in that backlog also increased by more than 5 percent at the end of the third quarter compared with June 30.
Oates sees additional opportunities for growth lying ahead for Universal. “We are now in the commissioning phase of our capital project to add two vacuum-arc remelt (VAR) furnaces at our North Jackson [Ohio] facility," he says. "Once complete, this project will increase our capacity in premium and specialty alloys by 20 percent. It also will enable us to further expand our portfolio of more technologically advanced, higher margin products, with added applications in the aerospace market, including defense.
“We are on-track to achieve further sequential growth in the fourth quarter along with record sales and strengthened profitability for full year 2023. As we look to 2024, we are highly optimistic that our positive growth trajectory will continue. Our confidence is based on the commitment, hard work and talents of all our employees.”
In 2024, however, Universal will have a modified leadership structure. The company has named Christopher M. Zimmer as its new president and CEO effective Nov. 1. Oates will remain board chair and take on a newly-established title of executive chair at Universal.
Zimmer, who also has been appointed to the board of directors, is a 15-year veteran of Universal. He joined the company in 2008 as vice president of sales and marketing, becoming executive vice president and chief commercial officer in 2014 and then chief operating officer in April of last year.
“We have a strong organization, a committed board and have enjoyed the long-term support of our shareholders and customers,” Oates says. “I have the utmost confidence that Chris’s leadership working in concert with the senior management team sets the stage for Universal to have a very exciting future.”