Universal Stainless reports strong aerospace sales

Universal Stainless & Alloy Products Inc. reports net sales in this year’s first quarter at $65.9 million, marking a 17.2 percent increase from the $56.2 million worth of metal sold in the fourth quarter of 2022.

The Bridgeville, Pennsylvania-based metals producer also says its first-quarter 2023 sales figure was an increase of 38.5 percent from net sales of $47.6 million one year ago, in the first quarter of 2022.

Universal Stainless reports an improvement in gross margin, even though outright profitability again eluded it in the first quarter of this year.

The company reports a net loss of $500,000 in the first quarter, which compared with a net loss of $3.7 million in the prior quarter and a net loss of $1.6 million in the first quarter of 2022.

Overall improved numbers can be found elsewhere in Universal Stainless’ first-quarter figures, including operating income of $1.4 million versus an operating loss of $3.2 million in the fourth quarter of 2022 and an operating loss of $1 million in the first quarter of 2022.

The company’s earnings before interest, taxes, depreciation and amortization (EBITDA) in the most recent quarter rose to $6.5 million from $1.7 million in the prior quarter.

Universal Stainless says its sales of premium alloys in the first quarter of 2023 reached a record $17.7 million, or 26.8 percent of overall sales. “The company’s premium alloy sales are mainly driven by aerospace demand,” Universal Stainless says.

“I am pleased to report that our first quarter results exceeded our expectations,” President and CEO Dennis Oates says. “Net sales were the highest since the second quarter of 2019. Premium alloy product sales were at record levels. Both were driven by continued robust demand in the aerospace market. In fact, premium product sales nearly doubled year-over-year as we pushed forward with our growth strategy.

“Importantly, we achieved a gross profit margin of 11.7 percent of sales, breaking through the double-digit level also for the first time since 2019. Increased shipment volume and plant activity levels, the higher premium sales mix, higher base selling prices and positive surcharges were the main contributors to our improved profitability. Increased hiring along with training and better retention also aided the quarter and bodes well for the rest of the year. While supply chain issues persisted, they improved from last year.”

The company also reports it engaged in capital expenditures in the first quarter of $4.5 million compared with $1.1 million in the prior quarter Approximately half of capital expenditures in the 2023 first quarter were for the company’s vacuum arc remelt (VAR) expansion project at its North Jackson, Ohio, facility.

That expansion should contribute to Universal’s role as a consumer of carbon and stainless scrap metal and alloys.

“We have entered 2023 on a very strong footing," Oates says. "Backlog at the end of the first quarter reached a record $366 million, and bookings of $117 million were also a quarter record. Business conditions remain positive, even with current economic uncertainty, with strong aerospace market demand continuing unabated. These factors point to continued sales growth and profitability improvement over the balance of the year.”