• Gross Margin in the Third Quarter Improves 130 Basis Points Sequentially to 11.9% of Sales
• Net Loss in the Third Quarter Totals $0.5 Million, or $0.07 per Diluted Share, Improved From a Net Loss of $0.8 Million, or $0.11 per Diluted Share in the Second Quarter
• Adjusted EBITDA in the Third Quarter Increases 10.0% Sequentially to $5.0 Million

BRIDGEVILLE, Pa., Oct. 26, 2016 (GLOBE NEWSWIRE) -- Universal Stainless & Alloy Products, Inc. (USAP) today reported that net sales for the third quarter of 2016 were $39.7 million, down 3.4% sequentially from the second quarter of 2016, with the decrease driven primarily by sales to the Aerospace end market, specifically to our Service Center customers.   In the third quarter of 2015, net sales were $43.4 million.  For the first nine months of 2016, net sales were $120.3 million, compared with $149.0 million in the same period of 2015. 

Sales of premium alloys in the third quarter of 2016 totaled $3.4 million, or 8.6% of sales, compared with $3.8 million, or 9.2% of sales, in the second quarter, and $4.4 million, or 10.2% of sales, in the third quarter of 2015.   Premium alloy sales in the first nine months of 2016 were $11.3 million, or 9.4% of total sales, compared with $13.7 million, or 9.2% of total sales, in the same period of 2015.

The Company’s gross margin for the third quarter of 2016 improved to $4.7 million, or 11.9% of sales, compared with $4.3 million, or 10.6% of sales, in the second quarter of 2016.  The improvement reflects the continued benefit of productivity enhancements, as well as further alignment of customer surcharges and input commodity costs.  In the third quarter of 2015, gross margin was a negative $0.4 million, or a negative 0.9% of sales.

The Company''s net loss for the third quarter of 2016 was $0.5 million, or $0.07 per diluted share, improved from a net loss of $0.8 million, or $0.11 per diluted share, in the second quarter of 2016.  In the third quarter of 2015, the Company had a net loss of $17.0 million, or $2.41 per diluted share, which included losses of $15.5 million, or $2.19 per diluted share, related to a goodwill impairment charge, costs associated with idling of plants, supplier loss impact, non-cash inventory write-offs, and other exit and severance costs.

The Company’s adjusted EBITDA for the third quarter was $5.0 million and represents a 10.0% improvement over the second quarter at an adjusted EBITDA margin of 12.7%.  Adjusted EBITDA is defined in the non-GAAP financial measures disclosure, and in the supporting table.

Backlog (before surcharges) at September 30, 2016 was $39.4 million, up 2.3% from $38.5 million at the end of the 2016 second quarter. Mill lead times remain short, reflecting a continued soft marketplace, and therefore keeping the Company’s backlog suppressed from historical levels.

In the third quarter of 2016, the Company generated cash flow from operating activities of $1.7 million. Capital expenditures for the third quarter were $1.4 million, and total debt less cash was improved by $0.4 million.

Chairman, President and CEO Dennis Oates commented: “The further expansion in our gross profit margin was key to our sequential profitability improvement, reflecting improved operational productivity and better alignment of input commodity costs and surcharges.    

“As expected, 2016 continues to be a transition year, as evident in the Aerospace market, and is evolving with modest improvement in market demand from the recent low point in the fourth quarter of 2015.

“Despite current softness in Aerospace as we finish 2016, we remain optimistic about the overall health of Aerospace, as well as our other end markets, given positive industry trends.   We remain focused on capturing opportunities while continuing to advance the transformation of Universal Stainless through our move to higher value, higher margin premium alloys.” 

-The 18th China(Guangzhou)Int''l Stainless Steel Industry Exhibition