Universal Stainless & Alloy Products, Inc. (NASDAQ:USAP) Q4 2022 Earnings Conference Call January 25, 2023 10:00 AM ET

Company Participants

June Filingeri - CommPartners, IR

Denny Oates - Chairman, President and CEO

Steve DiTommaso - VP and CFO

Conference Call Participants

Phil Gibbs - KeyBanc

John Deysher - Pinnacle

Douglas Dethy - D.C. Capital

Operator

Good day, and thank you for standing by. Welcome to the Universal Stainless Fourth Quarter 2022 Conference Call and Webcast. At this time participants are in a listen-only mode. [Operator Instructions]. Please be advised that today's conference call is being recorded.

I would now like to hand the conference over to your speaker for today, June Filingeri. Please go ahead.

June Filingeri

Thank you, Lisa. Good morning. This is June Filingeri of Comm-Partners, and I would also like to welcome you to the Universal Stainless conference call. We are here to discuss the company's fourth quarter 2022 results reported this morning. With us from management are Denny Oates, Chairman, President and Chief Executive Officer; Chris Zimmer, Executive Vice President and Chief Commercial 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. Our conference operator, Lisa, will instruct you on procedures at that time. 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 these formalities complete, I would now like to turn the call over to Denny Oates. Denny, we are ready to begin.

Denny Oates

Thanks, June. Good morning, everyone. Thanks for joining us today. The fourth quarter of 2022 was marked by important top line growth, especially in premium alloy and aerospace products. At the same time, we were challenged by misalignment of surcharges and material costs, several unplanned outages and very difficult weather conditions in December.

To summarize the fourth quarter compared to the third quarter, net sales increased 22%, premium alloy sales jumped 69%, aerospace sales rose 27%, order backlog hit a new record high of $288 million. However, our gross margin declined to 4.3% from 6.4% in the third quarter.