Universal Stainless & Alloy Products, Inc. (NASDAQ:USAP) Q3 2023 Earnings Call Transcript October 25, 2023 10:00 AM ET

Company Participants

June Filingeri - Comm-Partners LLC

Dennis Oates - Chairman, President and Chief Executive Officer

Christopher M. Zimmer - Executive Vice President and Chief Operating Officer

Steven DiTommaso - Vice President and Chief Financial Officer

Conference Call Participants

Philip Gibbs - KeyBanc

Robert Sales - LMK Capital Management

Operator

Thank you for standing by, and welcome to the Universal Stainless & Alloy Products, Inc. Third Quarter 2023 Conference Call and Webcast. At this time all participants are in listen-only mode. After the speakers’ presentation there will be a question-and-session. [Operator Instructions] As a reminder, today's program is being recorded.

And now I'd like to introduce your host for today's program, June Filingeri. Please go ahead.

June Filingeri

Thank you. Good morning. This is June Filingeri of Comm-Partners. And I also would like to welcome you to the Universal's call and webcast. We are here to discuss the company's third 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. Jonathan, our operator, 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 the formalities complete, I would now like to turn the call over to Denny Oates. Denny, we are ready to begin.

Dennis Oates

Thanks, June. Good morning, everyone. Thanks for joining us today. Our third quarter performance essentially met our short-term expectations, both top line and bottom line. Let me hit some of the highlights. Total sales of $71.3 million were the second highest quarterly sales on record. Premium alloy sales grew 28% sequentially putting us on track for a record 2023.

Our gross margin expanded to 15.2% of sales, the highest since the second quarter of 2018, despite commodity headwinds. Operating income increased by 43% from the second quarter. As a result, our net income doubled sequentially to $1.9 million or $0.20 per diluted share. Adjusted EBITDA increased to $9.5 million, up 20% from Q2 and was 1.5 times greater than the third quarter last year.