NEW YORK Universal Stainless & Alloy Products Inc. suffered a 24.2-percent drop in sales in the fourth quarter after "an expected pickup in order entry at year-end failed to materialize."
The Bridgeville, Pa.-based company posted sales of $47.15 million for the three months ended Dec. 31 vs. $62.17 million in the same period a year earlier, and net income plunged 74.6 percent to $1.08 million from nearly $4.26 million.
Full-year net income of $14.62 million was down 19.3 percent from $18.12 million in 2011 on sales that slipped 0.6 percent to $250.99 million.
Shipment volumes in the fourth quarter decreased 25 percent from a year earlier, primarily fueled by decreases of 20 percent, 41 percent and 53 percent in shipments to the aerospace, petrochemical and power generation markets, respectively.
The second half of 2012 was the "most challenging" for the company since 2009, Universal chairman, president and chief executive officer Dennis Oates said in a Jan. 29 conference call.
"Our fourth-quarter sales were consistent with low activity levels industry-wide," he said. "An expected pickup in order entry at year-end failed to materialize as economic uncertainty kept customers focused on inventory reduction."
Oates said that the company is entering the "final stages" of ramping up the North Jackson, Ohio, facility it acquired in June 2011 (amm.com, June 15, 2011). The company currently is working with customers on vacuum induction melting (VIM) products to be generated at the plant.
"We expect our North Jackson operation to begin making an increasingly positive contribution to our results as we go through 2013," Oates said. "In addition, there are early signs that some customers are returning to the market, although most are predicting a gradual recovery in meaningful demand."
Oates noted that activity in January has been markedly improved from the fourth quarter of 2012, and he expects the sales recovery to pick up momentum in the second half of 2013.
"Our customers are telling us they need the first quarter to get back into balance and that in March youll start to see some pickup," he said. "Id say that aerospace is the market closest to being in balance; when I look at our orders for this year, most of them are in aerospace."