Universal Stainless & Alloy Products, Inc. (NASDAQ:USAP) Q2 2023 Earnings Call Transcript July 26, 2023 10:00 AM ET
Company Participants
June Filingeri - CommPartners, IR
Denny Oates - Chairman, President and CEO
Chris Zimmer - EVP and COO
Steve DiTommaso - VP and CFO
Conference Call Participants
Phil Gibbs - KeyBanc Capital Markets
Operator
Good day, and thank you for standing by. Welcome to the Universal Stainless & Alloy Products Second Quarter 2023 Conference Call and Webcast. [Operator Instructions]. Please be advised that today's conference is being recorded.
I would now like to hand the conference over to June Filingeri. Please go ahead.
June Filingeri
Thank you. Good morning. This is June Filingeri of Comm-Partners, and I'd also like to welcome you to the Universal Stainless call and webcast. We are here to discuss the company's second quarter 2023 results reported this morning. With us from management are Denny Oates, Chairman, President, and Chief Executive Officer; Chris Zimmer, Executive Vice President and Chief Operating Officer; John Arminas, Vice President and General Counsel; and Steve DiTommaso, Vice President and Chief Financial Officer.
Before I turn the call over to management, let me quickly review procedures. After management has made formal remarks, we will take your questions. The conference operator Norma -- sorry about that, will take your questions. Also, please note that in this morning's call, management will make forward-looking statements under the Private Securities Litigation Reform Act of 1995. I would like to remind you of the risks related to these statements, which are more fully described in today's press release and in the company's filings with the Securities and Exchange Commission. With the formalities complete, I would now like to turn the call over to Denny Oates. Denny, we are ready to begin.
Denny Oates
Okay, June, thank you. Good morning, everyone. Thanks for joining us today. The main highlight of our second quarter performance is improving profitability, a product of the positive momentum we described on our last call. More specifically, gross profit margin reached 14.3% of sales despite an across-the-board drop in commodity metal prices that resulted in negative surcharge misalignment of about $0.5 million.
First quarter gross margin was 11.7%. The margin improvement in the most recent quarter led to a more than doubling of operating income to $3.1 million. We turned the corner on bottom line profitability with net income reaching $900,000 or $0.10 per diluted share. The main drivers of second quarter profitability were higher shipment volume, both sequentially and year-over-year, increased production, improved productivity at key operations, and higher base selling prices.