Universal Stainless & Alloy Products grew its Q1 2020 sales by 6pc, but the company acknowledged hard times ahead as it works through a backlog with reduced operational capacity because of the COVID-19 pandemic.
The global crisis impelled the company to implement safeguarding measures for its employees, but its operational efficiency has suffered. Dennis Oates, chairman, president and chief executive officer, Universal Stainless said the company finished Q1 2020 with a $110.7mn backlog and that it has had to cut costs in order to bolster liquidity.
Moreover, the company, which has a strong presence in the aerospace market, expects depleting orders in the short term as the world’s air travel industry has been devastated by the pandemic.
Universal Stainless’ sales of premium alloys reached $7.7mn during the quarter, accounting for 13.1pc of total sales, but nevertheless declined from $9.4mn during Q1 2019. However, premium alloy sales rose from $7.4mn during Q4 2019. Specialty alloys sales totaled $50mn during Q1 2020, virtually unchanged from the same quarter a year ago.
The aerospace industry accounting for $42.4mn of the company’s $58.5mn Q1 sales, down marginally from $42.6mn in Q1 2019 when the company’s net sales reached $60.2mn. Heavy equipment comprised $6.1mn of Universal Stainless’s Q1 net sales, unchanged from a year ago. The company’s sales in the oil and gas sector fell to $4.4mn in the first quarter from $5.4mn during Q1 2019.
The firm recorded a net loss of $1.4mn in Q1 2020 compared with a net income of $1.2mn during the first quarter of last year. Its EDBITDA also declined to $4mn in Q1 2020 from $7mn during the first quarter of last year.