UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, DC 20549 FORM 10-Q ☑ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Quarterly Period Ended June 30, 2022 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Transition Period from to Commission File Number 001-39467 UNIVERSAL STAINLESS & ALLOY PRODUCTS, INC. (Exact name of Registrant as specified in its charter) DELAWARE 25-1724540 (State or other ju ...

[PART I. FINANCIAL INFORMATION](index=3&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) Unaudited consolidated financial statements and explanatory notes for Universal Stainless & Alloy Products, Inc. for Q1 2022 and 2021 [Item 1. Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) Presents the unaudited consolidated financial statements and accompanying notes for Universal Stainless & Alloy Products, Inc. for the first quarter of 2022 and 2021 [Consolidated Statements of Operations](index=3&type=section&id=Consolidated%20Statements%20of%20Operations) Details the company's revenues, costs, and net loss for the three months ended March 31, 2022 and 2021 Consolidated Statements of Operations (Three months ended March 31) | Metric (in Thousands) | 2022 | 2021 | | :-------------------- | :--- | :--- | | Net sales | $47,562 | $37,038 | | Cost of products sold | $43,509 | $37,286 | | Gross margin | $4,053 | $(248) | | Operating loss | $(996) | $(5,479) | | Net loss | $(1,615) | $(4,529) | | Net loss per common share - Basic | $(0.18) | $(0.51) | | Net loss per common share - Diluted | $(0.18) | $(0.51) | [Consolidated Statements of Comprehensive Loss](index=4&type=section&id=Consolidated%20Statements%20of%20Comprehensive%20Loss) Presents the net loss and other comprehensive income/loss components for the three months ended March 31, 2022 and 2021 Consolidated Statements of Comprehensive Loss (Three months ended March 31) | Metric (in Thousands) | 2022 | 2021 | | :-------------------- | :--- | :--- | | Net loss | $(1,615) | $(4,529) | | Unrealized gain on derivatives | $135 | $15 | | Comprehensive loss | $(1,480) | $(4,514) | [Consolidated Balance Sheets](index=5&type=section&id=Consolidated%20Balance%20Sheets) Outlines the company's assets, liabilities, and stockholders' equity as of March 31, 2022, and December 31, 2021 Consolidated Balance Sheets (as of March 31, 2022 and December 31, 2021) | Metric (in Thousands) | March 31, 2022 | December 31, 2021 | | :-------------------- | :------------- | :---------------- | | **ASSETS** | | | | Total current assets | $184,756 | $170,561 | | Total assets | $342,799 | $330,632 | | **LIABILITIES AND STOCKHOLDERS' EQUITY** | | | | Total current liabilities | $38,253 | $31,638 | | Long-term debt, net | $73,585 | $66,852 | | Total liabilities | $117,549 | $104,311 | | Total stockholders' equity | $225,250 | $226,321 | | Total liabilities and stockholders' equity | $342,799 | $330,632 | [Consolidated Statements of Cash Flow](index=6&type=section&id=Consolidated%20Statements%20of%20Cash%20Flow) Summarizes cash flows from operating, investing, and financing activities for the three months ended March 31, 2022 and 2021 Consolidated Statements of Cash Flow (Three months ended March 31) | Metric (in Thousands) | 2022 | 2021 | | :-------------------- | :--- | :--- | | Net cash (used in) provided by operating activities | $(3,979) | $1,617 | | Net cash used in investing activity | $(2,520) | $(2,683) | | Net cash provided by financing activities | $6,660 | $1,325 | | Net increase in cash | $161 | $259 | | Cash at end of period | $279 | $423 | [Consolidated Statements of Shareholders' Equity](index=7&type=section&id=Consolidated%20Statements%20of%20Shareholders'%20Equity) Details changes in common stock, additional paid-in capital, retained earnings, and comprehensive income for Q1 2022 and 2021 Consolidated Statements of Shareholders' Equity (Three months ended March 31, 2022) | Metric (in Thousands) | Common stock | Additional paid-in capital | Retained earnings | Accumulated other comprehensive income (loss) | | :-------------------- | :----------- | :------------------------- | :---------------- | :-------------------------------------------- | | Balance at Dec 31, 2021 | $9 | $95,590 | $130,682 | $40 | | Share-based compensation | - | $409 | - | - | | Net gain on derivative instruments | - | - | - | $135 | | Net loss | - | - | $(1,615) | - | | Balance at Mar 31, 2022 | $9 | $95,999 | $129,067 | $175 | Consolidated Statements of Shareholders' Equity (Three months ended March 31, 2021) | Metric (in Thousands) | Common stock | Additional paid-in capital | Retained earnings | Accumulated other comprehensive income (loss) | | :-------------------- | :----------- | :------------------------- | :---------------- | :-------------------------------------------- | | Balance at Dec 31, 2020 | $9 | $94,276 | $131,440 | $(45) | | Share-based compensation | - | $309 | - | - | | Net gain on derivative instruments | - | - | - | $15 | | Net loss | - | - | $(4,529) | - | | Balance at Mar 31, 2021 | $9 | $94,585 | $126,911 | $(30) | [Notes to the Unaudited Consolidated Financial Statements](index=8&type=section&id=Notes%20to%20the%20Unaudited%20Consolidated%20Financial%20Statements) Provides detailed explanations of accounting policies and specific financial items supporting the consolidated financial statements [Note 1: Nature of Business and Basis of Presentation](index=8&type=section&id=Note%201%3A%20Nature%20of%20Business%20and%20Basis%20of%20Presentation) Describes the company's core business of manufacturing specialty steel products and the basis for financial statement preparation - The Company manufactures and markets semi-finished and finished specialty steel products, including stainless steel, nickel alloys, tool steel, and other alloyed steels, serving industries such as aerospace, power generation, oil and gas, heavy equipment, and general industrial manufacturing[24](index=24&type=chunk) - The financial statements are prepared in accordance with U.S. GAAP for interim financial reports, with certain information condensed or omitted as per SEC regulations[25](index=25&type=chunk) [Note 2: Net loss per Common Share](index=8&type=section&id=Note%202%3A%20Net%20loss%20per%20Common%20Share) Explains the computation of basic and diluted net loss per common share, including factors affecting dilution Net Loss Per Common Share Computation (Three months ended March 31) | Metric (in Thousands, except per share amounts) | 2022 | 2021 | | :---------------------------------------------- | :--- | :--- | | Net loss | $(1,615) | $(4,529) | | Weighted average number of shares of common stock outstanding | 8,946,174 | 8,888,815 | | Diluted weighted average number of shares of common stock outstanding | 8,946,174 | 8,888,815 | | Net loss per common share - Basic | $(0.18) | $(0.51) | | Net loss per common share - Diluted | $(0.18) | $(0.51) | - Options to purchase **748,775 shares** (2022) and **757,775 shares** (2021) were excluded from diluted EPS calculation because their exercise prices exceeded the average market price of common stock, or due to the company being in a net loss position[30](index=30&type=chunk) [Note 3: Revenue Recognition](index=9&type=section&id=Note%203%3A%20Revenue%20Recognition) Details the company's policies for recognizing revenue from product sales and conversion services, including timing and melt type breakdown - Revenue is primarily from product sales, recognized when control is transferred to the customer, typically upon shipment, with certain customer agreements requiring revenue recognition over time for specified product grades and shapes with no alternative use[31](index=31&type=chunk)[33](index=33&type=chunk)[34](index=34&type=chunk) Net Sales by Melt Type (Three months ended March 31) | Melt Type (in Thousands) | 2022 | 2021 | | :----------------------- | :--- | :--- | | Specialty alloys | $38,220 | $29,091 | | Premium alloys (A) | $8,933 | $7,553 | | Conversion services and other sales | $409 | $394 | | Total net sales | $47,562 | $37,038 | <br>(A) Premium alloys represent all vacuum induction melted (VIM) products. [Note 4: Inventory](index=10&type=section&id=Note%204%3A%20Inventory) Outlines inventory valuation methods, composition, and significant adjustments related to activity levels - Inventory is valued at the lower of cost or net realizable value, with cost determined by the weighted average cost method, and raw materials include ferrous and non-ferrous scrap metal and alloys[37](index=37&type=chunk)[39](index=39&type=chunk) - In Q1 2021, **$2.6 million** of fixed overhead costs were expensed directly due to low activity levels from the COVID-19 pandemic, with no such charge in Q1 2022[40](index=40&type=chunk) Inventory Composition (in Thousands) | Inventory Category | March 31, 2022 | December 31, 2021 | | :----------------- | :------------- | :---------------- | | Raw materials and starting stock | $14,340 | $12,263 | | Semi-finished and finished steel products | $126,508 | $122,396 | | Operating materials | $11,256 | $10,620 | | Gross inventory | $152,104 | $145,279 | | Inventory reserves | $(4,472) | $(4,595) | | Total inventory, net | $147,632 | $140,684 | [Note 5: Leases](index=10&type=section&id=Note%205%3A%20Leases) Describes the company's lease agreements for equipment and presents future minimum lease payment obligations - The Company's leases are primarily for mobile and other production equipment, generally with terms of **60 months or less**, and right-of-use assets and lease liabilities are recorded at the present value of minimum lease payments[41](index=41&type=chunk)[42](index=42&type=chunk) Future Minimum Lease Payments (as of March 31, 2022, in Thousands) | Year | Operating Leases | Finance Leases | | :--- | :--------------- | :------------- | | 2022 | $251 | $211 | | 2023 | $243 | $242 | | 2024 | $147 | $225 | | 2025 | $35 | $112 | | 2026 | $14 | - | | Total minimum lease payments | $690 | $790 | | Less amounts representing interest | $(29) | $(75) | | Present value of minimum lease payments | $661 | $715 | | Less current obligations | $(310) | $(233) | | Total long-term lease obligations, net | $351 | $482 | [Note 6: Long-Term Debt](index=11&type=section&id=Note%206%3A%20Long-Term%20Debt) Details the composition of long-term debt, including credit facilities and the forgiveness of the PPP Term Note Long-Term Debt Composition (in Thousands) | Debt Type | March 31, 2022 | December 31, 2021 | | :------------------ | :------------- | :---------------- | | Revolving credit facility | $63,261 | $55,997 | | Term loan | $13,393 | $13,929 | | Finance leases | $715 | $783 | | Total debt | $77,369 | $70,709 | | Less: current portion of long-term debt | $(2,376) | $(2,392) | | Less: deferred financing costs | $(1,408) | $(1,465) | | Long-term debt, net | $73,585 | $66,852 | - The Company entered into a Second Amended and Restated Revolving Credit, Term Loan and Security Agreement on March 17, 2021, providing a **$105.0 million** revolving credit facility and a **$15.0 million** term loan, collateralized by substantially all company assets[47](index=47&type=chunk)[48](index=48&type=chunk) - The Paycheck Protection Program (PPP) Term Note of **$10.0 million** was fully forgiven in July 2021, resulting in a gain on extinguishment of debt[56](index=56&type=chunk)[121](index=121&type=chunk) [Note 7: New Markets Tax Credit Financing Transaction](index=12&type=section&id=Note%207%3A%20New%20Markets%20Tax%20Credit%20Financing%20Transaction) Explains the company's participation in the NMTC program for capital projects and its role as primary beneficiary of related VIEs - The Company entered a New Markets Tax Credit (NMTC) financing program in March 2018 for a capital project at its Dunkirk, NY facility, securing low-interest financing and potential future benefits[61](index=61&type=chunk) - The Company is deemed the primary beneficiary of the Investment Fund and CDE variable interest entities (VIEs) due to its control over activities, contractual obligations, and obligation to absorb losses[67](index=67&type=chunk)[26](index=26&type=chunk) - As of March 31, 2022, **$2.8 million** was recorded within Other long-term liabilities related to this transaction, representing funds contributed by PNC New Markets Investment Partners, LLC[64](index=64&type=chunk) [Note 8: Fair Value Measurement](index=13&type=section&id=Note%208%3A%20Fair%20Value%20Measurement) Describes the fair value hierarchy used for financial instruments and the valuation of specific assets and liabilities - The fair value hierarchy categorizes inputs into Level 1 (quoted prices in active markets), Level 2 (observable inputs other than Level 1), and Level 3 (unobservable inputs)[68](index=68&type=chunk)[69](index=69&type=chunk)[70](index=70&type=chunk) - Cash, accounts receivable, and accounts payable approximated fair value due to short-term maturities (Level 1), while the Term Loan and Revolving Credit facility approximated carrying amount due to floating short-term interest rates (Level 2)[72](index=72&type=chunk) [Note 9: Commitments and Contingencies](index=13&type=section&id=Note%209%3A%20Commitments%20and%20Contingencies) Addresses potential impacts of lawsuits and claims on the company's financial condition and liquidity - The Company is subject to various lawsuits and claims in the normal course of business, and management believes the likelihood of a material adverse effect on financial condition or liquidity from pending matters is remote[73](index=73&type=chunk) [Note 10: Income Taxes](index=13&type=section&id=Note%2010%3A%20Income%20Taxes) Discusses the estimated annual effective tax rates and factors contributing to differences from the federal statutory rate - The estimated annual effective tax rates for Q1 2022 and Q1 2021 were **10.6%** and **25.8%**, respectively, primarily differing from the federal statutory rate due to research and development credits and a forecast of income tax expense in 2022 versus a benefit in 2021[75](index=75&type=chunk) - The effective tax rate for Q1 2022 was **6.0%**, including approximately **$0.1 million** of expense related to share-based compensation as discrete items[76](index=76&type=chunk) [Note 11: Derivatives and Hedging](index=13&type=section&id=Note%2011%3A%20Derivatives%20and%20Hedging) Explains the company's use of foreign exchange forward contracts and interest rate swaps to manage market risks - The Company uses foreign exchange forward contracts to mitigate foreign currency risk on sales, with notional values of **$2.2 million** (March 31, 2022) and **$2.5 million** (December 31, 2021), designated as cash flow hedges[77](index=77&type=chunk) - A forward interest rate swap contract was entered in 2020 to fix interest rates on variable-rate debt, with a notional amount of **$10 million** at March 31, 2022, also designated as a cash flow hedge[78](index=78&type=chunk) [Note 12: Subsequent Events](index=14&type=section&id=Note%2012%3A%20Subsequent%20Events) Reports on a liquid metal spill at the Bridgeville facility and its potential operational and financial implications - Subsequent to the quarter-end, a liquid metal spill occurred at the Bridgeville electric arc melting facility, with no injuries, and melting operations are expected to resume in May 2022, though the full financial impact is currently unknown[79](index=79&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=15&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Analyzes the company's financial performance, liquidity, and capital resources for Q1 2022, highlighting sales growth, margin improvement, and operational challenges [Overview](index=15&type=section&id=Overview) Provides a general description of the company's business, key performance indicators, and market trends for Q1 2022 - The Company manufactures and markets specialty steel products, including stainless steel, nickel alloys, and tool steel, for various industries such as aerospace, power generation, and oil & gas[81](index=81&type=chunk) Key Performance Indicators (Q1 2022 vs Q4 2021) | Metric | Q1 2022 (Millions) | Q4 2021 (Millions) | Change (Millions) | Change (%) | | :--------------- | :----------------- | :----------------- | :---------------- | :--------- | | Net sales | $47.6 | $43.3 | $4.3 | 10.0% | | Total backlog (before surcharges) | $201.8 | $134.5 | $67.3 | 50.0% | - Sales to the aerospace end market increased by **$4.4 million** (**16.9%**) in Q1 2022 compared to Q4 2021, driven by increasing demand[82](index=82&type=chunk) - Gross margin for Q1 2022 was **8.5%** of net sales, including a **$1.1 million** benefit from the AMJP Program, an increase from negative **0.7%** in Q1 2021 but a decrease from **8.7%** in Q4 2021 due to supply chain issues, operational difficulties, labor shortages, and rising costs[85](index=85&type=chunk) [COVID-19 Pandemic](index=15&type=section&id=COVID-19%20Pandemic) Discusses the ongoing impact of COVID-19 on operational efficiency, backlog, end markets, and financial results - COVID-19 related challenges continued to negatively impact operational efficiency in Q1 2022 and may persist throughout 2022, with uncertain long-term effects on backlog, end markets, operations, cash flows, and financial results[86](index=86&type=chunk)[87](index=87&type=chunk) [Results of Operations](index=16&type=section&id=Results%20of%20Operations) Presents a detailed analysis of the company's financial performance, including net sales, gross margin, and net loss for Q1 2022 versus Q1 2021 Consolidated Results of Operations (Three months ended March 31, in Thousands) | Metric | 2022 Amount | 2022 % of net sales | 2021 Amount | 2021 % of net sales | Dollar variance | Percentage variance | | :-------------------------------- | :---------- | :------------------ | :---------- | :------------------ | :-------------- | :------------------ | | Net sales | $47,562 | 100.0 | $37,038 | 100.0 | $10,524 | 28.4 | | Cost of products sold | $43,509 | 91.5 | $37,286 | 100.7 | $6,223 | 16.7 | | Gross margin | $4,053 | 8.5 | $(248) | (0.7) | $4,301 | NM | | Selling, general and administrative expenses | $5,049 | 10.6 | $5,231 | 14.1 | $(182) | (3.5) | | Operating loss | $(996) | (2.1) | $(5,479) | (14.8) | $4,483 | 81.8 | | Loss before income taxes | $(1,718) | (3.6) | $(6,045) | (16.3) | $4,327 | 71.6 | | Net loss | $(1,615) | (3.4) | $(4,529) | (12.2) | $2,914 | 64.3 | | Tons shipped | 6,829 | | 7,048 | | (219) | (3.1) | | Sales dollars per shipped ton | $6,965 | | $5,255 | | $1,710 | 32.5% | [Market Segment Information](index=16&type=section&id=Market%20Segment%20Information) Breaks down net sales by market segment, showing performance across service centers, OEMs, rerollers, and forgers Net Sales by Market Segment (Three months ended March 31, in Thousands) | Market Segment | 2022 Amount | 2022 % of net sales | 2021 Amount | 2021 % of net sales | Dollar variance | Percentage variance | | :----------------------- | :---------- | :------------------ | :---------- | :------------------ | :-------------- | :------------------ | | Service centers | $33,253 | 69.9% | $25,844 | 69.8% | $7,409 | 28.7% | | Original equipment manufacturers | $4,704 | 9.9% | $4,795 | 12.9% | $(91) | (1.9)% | | Rerollers | $4,508 | 9.5% | $3,793 | 10.2% | $715 | 18.9% | | Forgers | $4,688 | 9.9% | $2,212 | 6.0% | $2,476 | 111.9% | | Conversion services and other | $409 | 0.8% | $394 | 1.1% | $15 | 3.8% | | Total net sales | $47,562 | 100.0% | $37,038 | 100.0% | $10,524 | 28.4% | [Melt Type Information](index=17&type=section&id=Melt%20Type%20Information) Analyzes net sales by melt type, distinguishing between specialty alloys, premium alloys, and conversion services Net Sales by Melt Type (Three months ended March 31, in Thousands) | Melt Type | 2022 Amount | 2022 % of net sales | 2021 Amount | 2021 % of net sales | Dollar variance | Percentage variance | | :----------------------- | :---------- | :------------------ | :---------- | :------------------ | :-------------- | :------------------ | | Specialty alloys | $38,220 | 80.4% | $29,091 | 78.5% | $9,129 | 31.4% | | Premium alloys (A) | $8,933 | 18.8% | $7,553 | 20.4% | $1,380 | 18.3% | | Conversion services and other | $409 | 0.8% | $394 | 1.1% | $15 | 3.8% | | Total net sales | $47,562 | 100.0% | $37,038 | 100.0% | $10,524 | 28.4% | <br>(A) Premium alloys represent all vacuum induction melted (VIM) products. [End Market Information](index=17&type=section&id=End%20Market%20Information) Provides a breakdown of net sales by end market, including aerospace, power generation, oil & gas, and heavy equipment Net Sales by End Market (Three months ended March 31, in Thousands) | End Market | 2022 Amount | 2022 % of net sales | 2021 Amount | 2021 % of net sales | Dollar variance | Percentage variance | | :------------------------------- | :---------- | :------------------ | :---------- | :------------------ | :-------------- | :------------------ | | Aerospace | $30,102 | 63.3% | $22,227 | 60.0% | $7,875 | 35.4% | | Power generation | $1,297 | 2.7% | $1,199 | 3.2% | $98 | 8.2% | | Oil & gas | $4,352 | 9.2% | $3,066 | 8.3% | $1,286 | 41.9% | | Heavy equipment | $8,074 | 17.0% | $8,080 | 21.8% | $(6) | (0.1)% | | General industrial, conversion services and other | $3,737 | 7.8% | $2,466 | 6.7% | $1,271 | 51.5% | | Total net sales | $47,562 | 100.0% | $37,038 | 100.0% | $10,524 | 28.4% | [Net sales](index=17&type=section&id=Net%20sales) Discusses the drivers behind the increase in net sales for Q1 2022, including pricing and product mix - Net sales increased by **$10.5 million** (**28.4%**) for Q1 2022 compared to Q1 2021, driven by a strong pricing environment, higher average sales dollars per shipped ton, increased premium alloy sales, and a shift towards more finished products[94](index=94&type=chunk) [Gross margin](index=17&type=section&id=Gross%20margin) Explains the improvement in gross margin for Q1 2022, attributing it to higher activity levels and AMJP grant benefits - Gross margin as a percentage of sales improved to **8.5%** in Q1 2022 from negative **0.7%** in Q1 2021, primarily due to higher activity levels, better absorption, and a **$1.1 million** benefit from the AMJP grant[95](index=95&type=chunk) [Selling, general and administrative expenses](index=17&type=section&id=Selling%2C%20general%20and%20administrative%20expenses) Reports on the decrease in selling, general, and administrative expenses for Q1 2022 compared to the prior year - SG&A expenses decreased by **$0.2 million** in Q1 2022 compared to Q1 2021[96](index=96&type=chunk) [Interest expense and other financing costs](index=17&type=section&id=Interest%20expense%20and%20other%20financing%20costs) Details the increase in interest expense due to higher debt levels and variable interest rates in Q1 2022 - Interest expense increased to approximately **$0.7 million** in Q1 2022 from **$0.5 million** in Q1 2021, reflecting higher debt levels and increased variable interest rates on the revolving credit facility[97](index=97&type=chunk) [Income tax benefit](index=17&type=section&id=Income%20tax%20benefit) Explains the estimated annual effective tax rates and the factors influencing the tax position for Q1 2022 and 2021 - The estimated annual effective tax rates for Q1 2022 and Q1 2021 were **10.6%** and **25.8%**, respectively, with the difference primarily due to research and development credits and a shift from an income tax benefit in 2021 to an expense forecast in 2022[99](index=99&type=chunk) - The ETR for Q1 2022 was **6.0%**, including approximately **$0.1 million** of expense from share-based compensation[100](index=100&type=chunk) [Net loss](index=18&type=section&id=Net%20loss) Summarizes the significant improvement in net loss for Q1 2022 compared to Q1 2021 - The Company reported a net loss of **$1.6 million** (**$0.18 per diluted share**) in Q1 2022, a significant improvement from a net loss of **$4.5 million** (**$0.51 per diluted share**) in Q1 2021[101](index=101&type=chunk) [Liquidity and Capital Resources](index=18&type=section&id=Liquidity%20and%20Capital%20Resources) Assesses the company's ability to meet short-term and long-term obligations, including cash flows, credit facilities, and capital expenditures - At March 31, 2022, the Company had approximately **$25.3 million** of remaining availability under its revolving credit facility[102](index=102&type=chunk) - Management believes current cash flows from operations and available credit are sufficient to meet working capital, capital expenditure, and other obligations for at least the next 12 months[103](index=103&type=chunk) [Net cash used in (provided by) operating activities](index=18&type=section&id=Net%20cash%20used%20in%20(provided%20by)%20operating%20activities) Analyzes the factors contributing to cash flow from operating activities, including working capital changes and grant receipts - Net cash used in operating activities was **$4.0 million** in Q1 2022, primarily due to a **$5.9 million** use of cash from managed working capital (increased accounts receivable and inventory) partially offset by an increase in accounts payable[104](index=104&type=chunk) - In Q1 2022, the Company received the first **$1.8 million** installment of a **$3.6 million** grant from the Aviation Manufacturing Jobs Protection (AMJP) Program, with the benefit recognized as a reduction to cost of sales[105](index=105&type=chunk) [Net cash used in investing activities](index=18&type=section&id=Net%20cash%20used%20in%20investing%20activities) Details cash outflows for capital expenditures and projected spending for the year 2022 - Cash used for capital expenditures was **$2.5 million** in Q1 2022, with expected total capital spending for 2022 approximating **$20.0 million**[107](index=107&type=chunk) [Net cash provided by financing activities](index=18&type=section&id=Net%20cash%20provided%20by%20financing%20activities) Explains the increase in cash provided by financing activities, driven by working capital requirements - Net cash provided by financing activities increased to **$6.7 million** in Q1 2022 from **$1.3 million** in Q1 2021, driven by higher working capital requirements due to inventory and accounts receivable growth[108](index=108&type=chunk) [Raw materials](index=18&type=section&id=Raw%20materials) Discusses the impact of raw material costs on cost of products sold and the use of sales price surcharges to mitigate risk - Raw material costs constituted approximately **40%** of the cost of products sold in Q1 2022 and Q1 2021, with average prices for major raw materials (nickel, molybdenum, vanadium, chrome, iron, carbon scrap) increasing through March 31, 2022[109](index=109&type=chunk) - The Company uses sales price surcharges to mitigate the risk of raw material cost fluctuations, which effectively offset changes over time, though timing differences can cause variations between reporting periods[110](index=110&type=chunk) [Credit Facility](index=18&type=section&id=Credit%20Facility) Provides details on the company's revolving credit facility and term loan, including compliance with covenants and interest rates - The Company was in compliance with all applicable financial covenants under its Credit Agreement as of December 31, 2021, and March 31, 2022[112](index=112&type=chunk) - The Credit Agreement, expiring March 17, 2026, provides a **$105.0 million** revolving credit facility and a **$15.0 million** term loan, collateralized by substantially all company assets[111](index=111&type=chunk)[113](index=113&type=chunk) - Interest on outstanding amounts under the facilities is payable monthly, with the Company electing a LIBOR-based rate for most debt in Q1 2022, ranging from **2.79%** to **2.96%** for the Revolving Credit Facility and **3.24%** for the Term Loan[116](index=116&type=chunk) [Paycheck Protection Program Term Note](index=19&type=section&id=Paycheck%20Protection%20Program%20Term%20Note) Reports on the full forgiveness of the $10.0 million PPP Term Note and the resulting gain on extinguishment of debt - The **$10.0 million** PPP Term Note, obtained in April 2020 under the CARES Act, was fully forgiven by the United States Small Business Administration in July 2021, resulting in a gain on extinguishment of debt[118](index=118&type=chunk)[121](index=121&type=chunk) [Notes](index=19&type=section&id=Notes) Details the full settlement of the $20.0 million Amended and Restated Notes in March 2021 - The **$20.0 million** Amended and Restated Notes, originally issued in 2016 and extended multiple times, were fully settled on March 17, 2021, with the remaining principal balance and applicable interest paid off[123](index=123&type=chunk)[124](index=124&type=chunk) [Leases](index=20&type=section&id=Leases) Describes new lease agreements and the accounting treatment for operating lease liabilities and right-of-use assets - The Company entered into one new operating lease agreement during Q1 2022 and no new finance lease agreements[128](index=128&type=chunk) - Operating lease liabilities and right-of-use assets are recorded at the present value of minimum lease payments and amortized over terms of five years or less[126](index=126&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=20&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) Reports no significant changes in market risk from the prior annual report, with exceptions noted in MD&A - No significant changes in market risk from the disclosures in the Annual Report on Form 10-K for 2021, other than those discussed in Item 2 and Item 1A of this report[129](index=129&type=chunk) [Item 4. Controls and Procedures](index=20&type=section&id=Item%204.%20Controls%20and%20Procedures) Confirms the effectiveness of disclosure controls and procedures and the absence of material changes in internal control over financial reporting - The Company's disclosure controls and procedures were effective as of March 31, 2022[129](index=129&type=chunk) - No material changes in internal control over financial reporting occurred during the fiscal quarter ended March 31, 2022[129](index=129&type=chunk) [PART II. OTHER INFORMATION](index=21&type=section&id=PART%20II.%20OTHER%20INFORMATION) This section contains additional information not covered in Part I, including legal proceedings, risk factors, and exhibits [Item 1. Legal Proceedings](index=21&type=section&id=Item%201.%20Legal%20Proceedings) Reports no material changes to legal proceedings from the prior annual report - No material changes in legal proceedings from the 2021 Annual Report on Form 10-K[131](index=131&type=chunk) [Item 1A. Risk Factors](index=21&type=section&id=Item%201A.%20Risk%20Factors) Indicates no material changes to the risk factors previously disclosed in the annual report - No material changes in risk factors from the 2021 Annual Report on Form 10-K[132](index=132&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=21&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) Confirms no unregistered sales of equity securities or use of proceeds to report for the period - None to report[133](index=133&type=chunk) [Item 3. Defaults Upon Senior Securities](index=21&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) States no defaults upon senior securities occurred during the reporting period - None to report[134](index=134&type=chunk) [Item 4. Mine Safety Disclosures](index=21&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This disclosure item is not applicable to the company's operations - Not Applicable[135](index=135&type=chunk) [Item 5. Other Information](index=21&type=section&id=Item%205.%20Other%20Information) No additional information is required to be reported under this item - Not Applicable[136](index=136&type=chunk) [Item 6. Exhibits](index=22&type=section&id=Item%206.%20Exhibits) Lists all exhibits filed with the Quarterly Report on Form 10-Q, including key agreements and certifications - Exhibits include Employment Agreement (10.1), CEO and CFO Certifications (31.1, 31.2, 32.1), and XBRL financial information (101, 104)[138](index=138&type=chunk) [SIGNATURES](index=23&type=section&id=SIGNATURES) Confirms the official signing of the report by the Chairman, President, CEO, and VP, CFO on April 20, 2022 - The report was signed by Dennis M. Oates (Chairman, President and CEO) and Steven V. DiTommaso (VP and CFO) on April 20, 2022[141](index=141&type=chunk)

Financial Data and Key Metrics Changes - Consolidated backlog increased by 50% from $134.5 million at year-end 2021 to a record $201.8 million before surcharges [6] - Net sales rose to $47.6 million, up 10% from the previous quarter and 20% year-over-year [9] - Gross margin was 8.5% of sales in Q1, compared to 8.7% in Q4 2021 and a negative 7% in Q1 2021 [15][25] - The net loss for Q1 was $1.6 million or $0.18 per diluted share, consistent with Q4 2021 [25] Business Line Data and Key Metrics Changes - Premium alloy sales increased by 27% to $8.9 million, representing 18.8% of total sales [13] - Finished bar and plate products saw volume increases of 136% and 40% respectively [8] - Heavy equipment sales were $8.1 million, down 11% from the previous quarter [51] - Oil and gas market sales increased by 7% to $4.5 million [53] Market Data and Key Metrics Changes - Aerospace sales increased by 17% to $30.1 million, accounting for 63% of total sales [41] - The heavy equipment market remains the second largest, while the oil and gas market is the third largest [51][53] - General industrial market sales rose by 33% to $3.4 million [59] Company Strategy and Development Direction - The company is focused on ramping up production and addressing supply chain challenges to improve margins [22][70] - Strategic investments include acquiring two new vacuum arc re-melt furnaces to enhance production capacity [39] - The company aims to achieve double-digit gross margins as it moves through 2022 [22][69] Management's Comments on Operating Environment and Future Outlook - Management noted ongoing supply chain challenges and inflation impacting costs, but expects gradual improvement [90] - The company anticipates stronger sales volume and improved margins as backlog and bookings remain robust [72] - Labor shortages are a challenge, with a need for an additional 50 to 75 employees to normalize production levels [92] Other Important Information - A liquid metal spill occurred at the electric arc melting facility, with cleanup costs estimated at $1.5 million [33][36] - The company has implemented four price increases in response to rising material costs [32] - The company achieved ISO 45001 Certification for occupational health and safety at its Bridgeville plant [40] Q&A Session Summary Question: Supply chain inventories in aerospace and potential restocking - Management indicated that supply chain inventory levels are low, and customers are ramping up purchases to meet demand [78][79] Question: Expectations for margins in light of supply chain issues - Management expects margin improvement as price increases take effect and production ramps up [86][88] Question: Details on the impact of the liquid metal spill - The spill will close the melt shop for six weeks, impacting absorption and production costs [113] Question: Path towards margins beyond 11% - Management highlighted further price increases and improved production activity as key to achieving higher margins [118] Question: Hedging strategies for raw materials - The company does not engage in extensive hedging but may buy extra materials to mitigate availability risks [119]

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, DC 20549 FORM 10-K UNIVERSAL STAINLESS & ALLOY PRODUCTS, INC. (Exact name of Registrant as specified in its charter) DELAWARE 25-1724540 (State or other jurisdiction of incorporation or organization) (IRS Employer Identification No.) 600 MAYER STREET, BRIDGEVILLE, PA 15017 (412) 257-7600 (Address of principal executive offices, including zip code) (Registrant's telephone number, including area code) Securities registered pursuant to Section 12(b) ...

Universal Stainless & Alloy Products, Inc. (NASDAQ:USAP) Q4 2021 Results Earnings Conference Call January 26, 2022 10:00 AM ET Company Participants June Filingeri - Investor Relations, President at CommPartners Denny Oates - Chairman, President, Chief Executive Officer Conference Call Participants Phil Gibbs - KeyBanc Capital Bob Sales - LMK Capital Operator Good day and thank you for standing by. Welcome to the Universal Stainless fourth quarter 2021 conference call and webcast. At this time, all participa ...

[PART I. FINANCIAL INFORMATION](index=3&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) This section presents the company's financial statements, management's analysis, market risk disclosures, and controls and procedures [Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) This section presents the company's operational results, financial position, and cash flows, highlighting a shift to net income and increased inventory [Consolidated Statements of Operations](index=3&type=section&id=Consolidated%20Statements%20of%20Operations) Q3 2021 net sales remained flat, but a $10 million PPP loan forgiveness led to a net income of $7.9 million, reversing a prior-year loss Consolidated Statements of Operations (Q3 & Nine Months, in thousands, except per share) | Metric | Q3 2021 | Q3 2020 | 9M 2021 | 9M 2020 | | :--- | :--- | :--- | :--- | :--- | | **Net sales** | $37,169 | $37,434 | $112,709 | $148,407 | | **Gross margin** | $2,307 | $(4,427) | $4,223 | $2,419 | | **Operating loss** | $(2,703) | $(8,580) | $(11,169) | $(13,039) | | **Gain on extinguishment of debt** | $10,000 | $0 | $10,000 | $0 | | **Net income (loss)** | $7,890 | $(7,000) | $868 | $(11,742) | | **Diluted EPS** | $0.87 | $(0.79) | $0.10 | $(1.33) | [Consolidated Balance Sheets](index=5&type=section&id=Consolidated%20Balance%20Sheets) Total assets increased to $321.0 million, driven by a $24.2 million rise in inventory, while total liabilities also grew to $93.4 million Consolidated Balance Sheet Highlights (in thousands) | Account | Sep 30, 2021 | Dec 31, 2020 | | :--- | :--- | :--- | | **Total current assets** | $160,656 | $137,116 | | Inventory, net | $135,604 | $111,380 | | **Total assets** | $320,954 | $303,046 | | **Total current liabilities** | $38,112 | $33,893 | | Long-term debt, net | $49,126 | $33,471 | | **Total liabilities** | $93,409 | $77,366 | | **Total stockholders' equity** | $227,545 | $225,680 | [Consolidated Statements of Cash Flow](index=6&type=section&id=Consolidated%20Statements%20of%20Cash%20Flow) Net cash used in operations was $4.9 million, primarily due to a $25.5 million increase in inventory, while financing provided $11.3 million Cash Flow Summary (Nine Months Ended Sep 30, in thousands) | Activity | 2021 | 2020 | | :--- | :--- | :--- | | **Net cash (used in) provided by operating activities** | $(4,871) | $12,604 | | **Net cash used in investing activity** | $(6,514) | $(8,480) | | **Net cash provided by (used in) financing activities** | $11,300 | $(4,236) | | **Net decrease in cash** | $(85) | $(112) | [Notes to the Unaudited Consolidated Financial Statements](index=9&type=section&id=Notes%20to%20the%20Unaudited%20Consolidated%20Financial%20Statements) Key notes detail revenue recognition, inventory, and debt structure, including a $10.0 million PPP loan forgiveness and a new $120.0 million credit facility - Revenue from specialty alloys constituted the majority of sales, though sales of premium alloys (VIM products) decreased in Q3 and the first nine months of 2021 compared to 2020[37](index=37&type=chunk) - In July 2021, the company's **$10.0 million Paycheck Protection Program (PPP) Term Note was fully forgiven** by the Small Business Administration, resulting in a corresponding gain on extinguishment of debt recorded in the third quarter[59](index=59&type=chunk) - On March 17, 2021, the company entered into a new Credit Agreement providing a **$105.0 million Revolving Credit Facility** and a **$15.0 million Term Loan**, replacing its prior credit agreement[50](index=50&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=16&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses Q3 sales, attributing decreases to supply chain issues, while highlighting strong backlog growth and improved gross margin [Overview](index=16&type=section&id=Overview) Q3 2021 sales were $37.2 million, impacted by supply chain issues, but backlog grew 26.5% sequentially to $125.1 million - Backlog (before surcharges) increased **26.5% sequentially to $125.1 million** at the end of Q3 2021, marking the third consecutive quarter of double-digit growth[86](index=86&type=chunk) - Q3 2021 sales of **$37.2 million** were negatively impacted by supply chain challenges and labor shortages, which delayed shipments[85](index=85&type=chunk) - Gross margin for Q3 2021 was **6.2% of net sales**, an improvement from **5.6% in Q2 2021** and a **negative 11.8% in Q3 2020**[88](index=88&type=chunk) [Results of Operations](index=17&type=section&id=Results%20of%20Operations) Q3 2021 net sales were flat, but gross margin improved, and a $10 million PPP loan forgiveness led to a $7.9 million net income Q3 2021 vs Q3 2020 End Market Sales (in thousands) | End Market | Q3 2021 Sales | Q3 2020 Sales | % Change | | :--- | :--- | :--- | :--- | | Aerospace | $22,253 | $25,138 | (11.5)% | | Power generation | $847 | $1,590 | (46.7)% | | Oil & gas | $4,041 | $2,755 | 46.7% | | Heavy equipment | $7,614 | $4,662 | 63.3% | - For the nine months ended Sep 30, 2021, net sales decreased **24.1% year-over-year**, driven by an **18.7% drop in shipment volume** and a **6.6% decrease in average sales price per ton**, primarily due to the economic impact of COVID-19 on aerospace and premium alloy product demand[111](index=111&type=chunk) - The company's estimated annual effective tax rate for 2021 is **136.9%**, significantly different from the **21.0% federal statutory rate**, mainly due to the non-taxable gain on the extinguishment of the PPP loan[78](index=78&type=chunk)[102](index=102&type=chunk)[116](index=116&type=chunk) [Liquidity and Capital Resources](index=21&type=section&id=Liquidity%20and%20Capital%20Resources) The company has $39 million available liquidity, with cash used in operations for inventory build-up and $6.5 million in capital expenditures - As of September 30, 2021, the company had approximately **$39 million of remaining availability** under its revolving credit facility[119](index=119&type=chunk) - Cash used in operations for the first nine months of 2021 was **$4.9 million**, largely due to a **$25.5 million increase in inventory** to support backlog growth and mitigate supply chain risks[123](index=123&type=chunk) - Capital expenditures for the first nine months of 2021 were **$6.5 million**, with a full-year expectation of approximately **$11.0 million**, primarily for strategic projects to expand melt and remelt capabilities for premium products[125](index=125&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=23&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) No significant changes in market risk disclosures were reported compared to the 2020 Annual Report on Form 10-K - The company reports **no significant changes in its market risk** compared to what was disclosed in its 2020 Annual Report on Form 10-K[143](index=143&type=chunk) [Controls and Procedures](index=23&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective, with no material changes to internal control over financial reporting - Management concluded that the company's **disclosure controls and procedures are effective** as of September 30, 2021[143](index=143&type=chunk) - There were **no changes in the company's internal control over financial reporting** during the third quarter of 2021 that have materially affected, or are reasonably likely to materially affect, internal controls[143](index=143&type=chunk) [PART II. OTHER INFORMATION](index=24&type=section&id=PART%20II.%20OTHER%20INFORMATION) This section details legal proceedings, risk factors, equity sales, defaults, mine safety, and exhibits [Legal Proceedings](index=24&type=section&id=Item%201.%20Legal%20Proceedings) No material changes to legal proceedings were reported since the 2020 Annual Report on Form 10-K - There are **no material changes to legal proceedings** since the 2020 Form 10-K filing[145](index=145&type=chunk) [Risk Factors](index=24&type=section&id=Item%201A.%20Risk%20Factors) No material changes in risk factors were reported compared to the 2020 Annual Report on Form 10-K - There have been **no material changes in risk factors** from those disclosed in the 2020 Form 10-K[146](index=146&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=24&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company reported no unregistered sales of equity securities or use of proceeds during the period - **None reported**[147](index=147&type=chunk) [Defaults Upon Senior Securities](index=24&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) The company reported no defaults upon senior securities - **None reported**[148](index=148&type=chunk) [Mine Safety Disclosures](index=24&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company - **Not Applicable**[149](index=149&type=chunk) [Other Information](index=24&type=section&id=Item%205.%20Other%20Information) This item is not applicable - **Not Applicable**[150](index=150&type=chunk) [Exhibits](index=25&type=section&id=Item%206.%20Exhibits) This section lists exhibits filed with the Form 10-Q, including CEO/CFO certifications and XBRL-formatted financial statements - Exhibits filed include Sarbanes-Oxley Act certifications for the CEO and CFO, and financial data in XBRL format[152](index=152&type=chunk)

Universal Stainless & Alloy Products, Inc. (NASDAQ:USAP) Q3 2021 Earnings Conference Call October 20, 2021 10:00 AM ET Company Participants Dennis Oates - Chairman, President, CEO, Interim Principal Financial & Accounting Officer Conference Call Participants Michael Hughes - SGF Capital Management Philip Gibbs - KeyBanc Capital Markets June Filingeri - IR Operator Good day, everyone. Thank you for standing by, and welcome to the Universal Stainless Third Quarter 2021 Conference Call. [Operator Instructions] ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, DC 20549 FORM 10-Q ☑ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Quarterly Period Ended June 30, 2021 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Transition Period from to Commission File Number 001-39467 UNIVERSAL STAINLESS & ALLOY PRODUCTS, INC. (Exact name of Registrant as specified in its charter) DELAWARE 25-1724540 (State or other ju ...

Universal Stainless & Alloy Products, Inc. (NASDAQ:USAP) Q2 2021 Earnings Conference Call July 21, 2021 10:00 AM ET Company Participants June Filingeri - Comm-Partners, LLC Dennis Oates - Chairman, President and Chief Executive Officer Christopher Zimmer - Executive Vice President and Chief Commercial Officer John Arminas - Vice President, General Counsel and Corporate Secretary Conference Call Participants Michael Leshock - KeyBanc Capital Markets, Inc. Alan Weber - Robotti & Company Advisors, LLC Robert S ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, DC 20549 FORM 10-Q ☑ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Quarterly Period Ended March 31, 2021 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Transition Period from to Commission File Number 001-39467 UNIVERSAL STAINLESS & ALLOY PRODUCTS, INC. (Exact name of Registrant as specified in its charter) DELAWARE 25-1724540 (State or other j ...