Universal Stainless & Alloy Products (USAP) Q2 2024 earnings summary

Executive summary

• Achieved record Q2 2024 net sales of $82.8 million, up 20% year-over-year, driven by strong aerospace demand and premium alloy sales.

• Gross margin reached a record 25.4% of sales ($21.0 million), reflecting cost improvements and favorable product mix.

• Net income for Q2 2024 was $8.9 million ($0.90 per diluted share), more than doubling from Q1 2024 and up from $0.9 million in Q2 2023.

• Aerospace market sales reached $68.6 million, 82.9% of total sales, up 34% year-over-year; premium alloys accounted for 25% of sales.

• Backlog at June 30, 2024 was $296.5 million, supported by sustained high demand, especially in aerospace and defense.

Financial highlights

• Q2 2024 net sales: $82.8 million (+20% year-over-year); gross margin: $21.0 million (25.4% of sales).

• Operating income for Q2 2024: $12.8 million (15.5% of sales), a record high.

• Adjusted EBITDA for Q2 2024: $18.5 million (22% of sales), up 135% year-over-year.

• Net cash from operating activities in Q2: $7.3 million; debt reduced by $3 million in Q2 and $15 million year-over-year.

• Net income for six months ended June 30, 2024: $13.0 million ($1.33 per diluted share), up from $0.4 million in 2023.

Outlook and guidance

• Management expects continued profitable growth, margin expansion, and robust aerospace and defense demand into 2025.

• Full-year 2024 capital expenditures projected at $18 million.

• SG&A expected to approximate $8.5 million per quarter for the rest of 2024.

• Management believes cash flows and available credit are sufficient for foreseeable needs.