Universal Stainless & Alloy Products Inc (USAP, Financial) filed Annual Report for the period ended 2010-12-31.
Universal Stainless & Alloy Products Inc. has a market cap of $221 million; its shares were traded at around $32.53 with a P/E ratio of 16.8 and P/S ratio of 1.2. Mutual Fund and Other Gurus that owns USAP: John Keeley of Keeley Fund Management, HOTCHKIS & WILEY of Hotchkis & Wliey Capital Management LLC, Chuck Royce of Royce& Associates.
The Companys customer base increased from 568 customers at December 31, 2009 to 595 customers at December 31, 2010. The Companys five largest customers in the aggregate accounted for approximately 45% and 38% of sales for the years ended December 31, 2010 and 2009, respectively. For the year ended December 31, 2010, sales to Carpenter Technology Corporation (CRS) accounted for 14% of the Companys sales and 17% of accounts receivable. No other customer accounted for more than 10% of the Companys sales for the year ended December 31, 2010. Sales outside of the United States approximated 5% of 2010, 10% of 2009 and 4% of 2008 sales, respectively.
High import penetration of specialty steel products, especially stainless and tool steels, also impacts the competitive nature within the United States. Unfair pricing practices by foreign producers have resulted in high import penetration into the U.S. markets in which the Company participates. According to SSINA, import penetration for the years ended December 31, 2009 and 2008 was 51% and 53%, respectively, for stainless bar, and 39% and 49%, respectively, for stainless rod. Import penetration during the first ten months of 2010 for stainless bar and rod was 49% and 36%, respectively, according to SSINA.
Under the 1996 Employee Stock Purchase Plan, as amended (the Plan), the Company is authorized to issue up to 150,000 shares of Common Stock to its full-time employees, nearly all of whom are eligible to participate. Under the terms of the Plan, employees can choose as of January 1 and July 1 of each year to have up to 10% of their total earnings withheld to purchase up to 100 shares of the Companys Common Stock each six-month period. The purchase price of the stock is 85% of the lower of its beginning-of-the-period or end-of-the-period market prices. At December 31, 2010, the Company had issued 122,933 shares of Common Stock since the plans inception.
Net sales to the Companys largest 2010 customer accounted for 14% of 2010 sales. The accounts receivable balance from this largest customer comprised approximately 17% of total accounts receivable at December 31, 2010. An adverse change in, or termination of, the Companys relationship with one or more of its major customers or one or more of its market segments could have a material adverse effect upon the Company. See the information under the heading Customers in Item 1, Business, of this Annual Report on Form 10-K.
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Universal Stainless & Alloy Products Inc. has a market cap of $221 million; its shares were traded at around $32.53 with a P/E ratio of 16.8 and P/S ratio of 1.2. Mutual Fund and Other Gurus that owns USAP: John Keeley of Keeley Fund Management, HOTCHKIS & WILEY of Hotchkis & Wliey Capital Management LLC, Chuck Royce of Royce& Associates.
Highlight of Business Operations:
The specialty steel industry is a relatively small but distinct segment of the overall steel industry. Specialty steels include stainless steels, high-speed and tool steels, electrical steels, high-temperature alloys, magnetic alloys and electronic alloys. Specialty steels are made with a high alloy content, which enables their use in environments that demand exceptional hardness, toughness, strength and resistance to heat, corrosion or abrasion, or combinations thereof. Specialty steels generally must conform to more demanding customer specifications for consistency, straightness and surface finish than carbon steels. According to the Specialty Steel Industry of North America (SSINA), annual domestic consumption of specialty steels approximated 1.6 million tons in 2009 compared with 2.3 million tons in 2008. Of the 2009 amount, approximately 1.2 million tons of specialty steels consumed domestically represented stainless steel sheet and strip and electrical alloy products which the Company does not produce. Also, according to SSINA data through October 31, 2010, U.S. consumption of total specialty steel products in 2010 increased 32% from 2009 levels. The consumption of those products in the Companys addressable market, comprising stainless steel bar, rod and wire products, increased by 44%, 89% and 14%, respectively.The Companys customer base increased from 568 customers at December 31, 2009 to 595 customers at December 31, 2010. The Companys five largest customers in the aggregate accounted for approximately 45% and 38% of sales for the years ended December 31, 2010 and 2009, respectively. For the year ended December 31, 2010, sales to Carpenter Technology Corporation (CRS) accounted for 14% of the Companys sales and 17% of accounts receivable. No other customer accounted for more than 10% of the Companys sales for the year ended December 31, 2010. Sales outside of the United States approximated 5% of 2010, 10% of 2009 and 4% of 2008 sales, respectively.
High import penetration of specialty steel products, especially stainless and tool steels, also impacts the competitive nature within the United States. Unfair pricing practices by foreign producers have resulted in high import penetration into the U.S. markets in which the Company participates. According to SSINA, import penetration for the years ended December 31, 2009 and 2008 was 51% and 53%, respectively, for stainless bar, and 39% and 49%, respectively, for stainless rod. Import penetration during the first ten months of 2010 for stainless bar and rod was 49% and 36%, respectively, according to SSINA.
Under the 1996 Employee Stock Purchase Plan, as amended (the Plan), the Company is authorized to issue up to 150,000 shares of Common Stock to its full-time employees, nearly all of whom are eligible to participate. Under the terms of the Plan, employees can choose as of January 1 and July 1 of each year to have up to 10% of their total earnings withheld to purchase up to 100 shares of the Companys Common Stock each six-month period. The purchase price of the stock is 85% of the lower of its beginning-of-the-period or end-of-the-period market prices. At December 31, 2010, the Company had issued 122,933 shares of Common Stock since the plans inception.
Net sales to the Companys largest 2010 customer accounted for 14% of 2010 sales. The accounts receivable balance from this largest customer comprised approximately 17% of total accounts receivable at December 31, 2010. An adverse change in, or termination of, the Companys relationship with one or more of its major customers or one or more of its market segments could have a material adverse effect upon the Company. See the information under the heading Customers in Item 1, Business, of this Annual Report on Form 10-K.
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