Form 10-Q - Quarterly report [Sections 13 or 15(d)]

 

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

 

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FORM 10-Q

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☑	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
	For the Quarterly Period Ended June 30, 2024

OR

☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
	For the Transition Period from                to

 

Commission File Number 001-39467

 

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UNIVERSAL STAINLESS & ALLOY PRODUCTS, INC.

(Exact name of Registrant as specified in its charter)

 

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Delaware	25-1724540
(State or other jurisdiction of incorporation or organization)	(IRS Employer Identification No.)

 

600 Mayer Street

Bridgeville, PA 15017

(Address of principal executive offices, including zip code)

 

[phone]

(Registrant’s telephone number, including area code)

 

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Securities registered pursuant to Section 12(b) of the Exchange Act:

Title of Each Class	Trading Symbol	Name of Each Exchange on Which Registered
Common Stock, par value $0.001 per share Preferred Stock Purchase Rights	USAP	The Nasdaq Stock Market, LLC The Nasdaq Stock Market, LLC

 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  Yes ☑   No ☐

 

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).  Yes ☑   No ☐

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

 

Large accelerated filer	☐	Accelerated filer	☑
Non-accelerated filer	☐	Smaller reporting company	☑
Emerging growth company	☐

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).  Yes ☐   No ☑

 

As of July 22, 2024, there were 9,237,953 shares of the Registrant’s common stock outstanding.

 

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Universal Stainless & Alloy Products, Inc.

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	DESCRIPTION		PAGE NO.
PART I.	FINANCIAL INFORMATION		1
Item 1.	Condensed Financial Statements		1
	Condensed Consolidated Statements of Operations (Unaudited)		1
	Condensed Consolidated Statements of Comprehensive Income (Unaudited)		2
	Condensed Consolidated Balance Sheets (Unaudited)		3
	Condensed Consolidated Statements of Cash Flow (Unaudited)		4
	Condensed Consolidated Statements of Shareholders' Equity (Unaudited)		5
	Notes to the Unaudited Condensed Consolidated Financial Statements		6
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations		15
Item 3.	Quantitative and Qualitative Disclosures About Market Risk		23
Item 4.	Controls and Procedures		23
PART II.	OTHER INFORMATION		24
Item 1.	Legal Proceedings		24
Item 1A.	Risk Factors		24
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds		24
Item 3.	Defaults Upon Senior Securities		24
Item 4.	Mine Safety Disclosures		24
Item 5.	Other Information		24
Item 6.	Exhibits		25
SIGNATURES			26

 

 

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Part I.         FINANCIAL INFORMATION

 

Item 1.         FINANCIAL STATEMENTS

 

UNIVERSAL STAINLESS & ALLOY PRODUCTS, INC.

 

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Dollars in Thousands, Except Per Share Information)

(Unaudited)

 

		Three months ended								Six months ended
		June 30,								June 30,
		2024				2023				2024				2023
Net sales		$	82,759			$	69,015			$	160,396			$	134,880
Cost of products sold			61,746				59,167				124,716				117,308
Gross margin			21,013				9,848				35,680				17,572
Selling, general and administrative expenses			8,164				6,755				15,573				13,030
Operating income			12,849				3,093				20,107				4,542
Interest expense and other financing costs			1,902				2,045				3,951				4,077
Other expense (income), net			22				5				36				(37	)
Income before income taxes			10,925				1,043				16,120				502
Income taxes			2,060				148				3,118				119
Net income		$	8,865			$	895			$	13,002			$	383
Net income per common share - Basic		$	0.96			$	0.10			$	1.41			$	0.04
Net income per common share - Diluted		$	0.90			$	0.10			$	1.33			$	0.04
Weighted average shares of common stock outstanding
Basic			9,209,721				9,066,150				9,196,556				9,061,011
Diluted			9,843,471				9,272,660				9,754,741				9,210,841

 

The accompanying notes are an integral part of these condensed consolidated financial statements.

 

 

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UNIVERSAL STAINLESS & ALLOY PRODUCTS, INC.

 

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Dollars in Thousands)

(Unaudited)

 

		Three months ended								Six months ended
		June 30,								June 30,
		2024				2023				2024				2023
Net income		$	8,865			$	895			$	13,002			$	383
Other comprehensive income (loss), net of tax
Unrealized gain (loss) on derivatives			16				(124	)			47				(270	)
Comprehensive income		$	8,881			$	771			$	13,049			$	113

 

The accompanying notes are an integral part of these condensed consolidated financial statements.

 

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UNIVERSAL STAINLESS & ALLOY PRODUCTS, INC.

 

CONDENSED CONSOLIDATED BALANCE SHEETS

(Dollars in Thousands, Except Per Share Information)

 

		June 30,				December 31,
		2024				2023
		(Unaudited)				*
ASSETS
Current assets:
Cash		$	1			$	394
Accounts receivable (less expected credit losses of $34 in each period, respectively)			44,919				39,034
Inventory			149,093				144,700
Other current assets			13,316				11,693
Total current assets			207,329				195,821
Property, plant and equipment, net			158,882				159,636
Other long-term assets			1,825				1,233
Total assets		$	368,036			$	356,690
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable		$	36,916			$	34,855
Accrued employment costs			4,707				6,492
Current portion of long-term debt			3,810				3,733
Other current liabilities			2,096				829
Total current liabilities			47,529				45,909
Long-term debt, net			74,480				81,846
Deferred income taxes			2,675				2
Other long-term liabilities, net			2,867				2,891
Total liabilities			127,551				130,648
Commitments and contingencies (Note 9)
Stockholders’ equity:
Senior preferred stock, par value $0.001 per share; 1,980,000 shares authorized; zero shares issued and outstanding			-				-
Common stock, par value $0.001 per share; 20,000,000 shares authorized; 9,237,953 and 9,185,307 shares issued, respectively			9				9
Additional paid-in capital			100,031				98,637
Accumulated other comprehensive loss			(76	)			(123	)
Retained earnings			140,521				127,519
Total stockholders’ equity			240,485				226,042
Total liabilities and stockholders’ equity		$	368,036			$	356,690

 

The accompanying notes are an integral part of these condensed consolidated financial statements.

* Derived from audited financial statements

 

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UNIVERSAL STAINLESS & ALLOY PRODUCTS, INC.

 

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW

(Dollars in Thousands)

(Unaudited)

 

		Six months ended
		June 30,
		2024				2023
Operating Activities:
Net income		$	13,002			$	383
Adjustments for non-cash items:
Depreciation and amortization			10,180				9,643
Deferred income tax			2,667				(19	)
Share-based compensation expense			974				672
Changes in assets and liabilities:
Accounts receivable, net			(5,885	)			(335	)
Inventory, net			(5,291	)			1,716
Accounts payable			3,692				(1,633	)
Accrued employment costs			(1,785	)			819
Other, net			(21	)			(69	)
Net cash provided by operating activities			17,533				11,177
Investing Activity:
Payments for property, plant and equipment			(10,926	)			(6,932	)
Net cash used in investing activity			(10,926	)			(6,932	)
Financing Activities:
Net repayment of borrowings under revolving credit facility			(5,576	)			(4,542	)
Proceeds from stock issued under share-based plans			420				75
Repayments of term loan facility and finance leases			(1,844	)			(1,753	)
Net cash used in financing activities			(7,000	)			(6,220	)
Net decrease in cash			(393	)			(1,975	)
Cash at beginning of period			394				2,019
Cash at end of period		$	1			$	44

 

The accompanying notes are an integral part of these condensed consolidated financial statements.

 

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UNIVERSAL STAINLESS & ALLOY PRODUCTS, INC.

 

CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY

(Dollars in Thousands)

(Unaudited)

 

																		Accumulated
		Common								Additional								other				Total
		shares				Common				paid-in				Retained				comprehensive				shareholders'
		outstanding				stock				capital				earnings				(loss) income				equity
For the six months ended June 30, 2024
Balance at December 31, 2023			9,185,307			$	9			$	98,637			$	127,519			$	(123	)		$	226,042
Exercise of stock options			4,500				-				66				-				-				66
Share-based compensation			-				-				454				-				-				454
Other comprehensive income, net of tax			-				-				-				-				31				31
Net income			-				-				-				4,137				-				4,137
Balance at March 31, 2024			9,189,807			$	9			$	99,157			$	131,656			$	(92	)		$	230,730
Employee Stock Purchase Plan			15,572				-				255				-				-			$	255
Exercise of stock options			10,677				-				99				-				-				99
Share-based compensation			21,897				-				520				-				-				520
Other comprehensive income, net of tax			-				-				-				-				16				16
Net income			-				-				-				8,865				-				8,865
Balance at June 30, 2024			9,237,953			$	9			$	100,031			$	140,521			$	(76	)		$	240,485
For the six months ended June 30, 2023
Balance at December 31, 2022			9,049,748			$	9			$	97,002			$	122,609			$	133			$	219,753
Share-based compensation			10,920				-				361				-				-				361
Other comprehensive (loss), net of tax			-				-				-				-				(146	)			(146	)
Net loss			-				-				-				(512	)			-				(512	)
Balance at March 31, 2023			9,060,668			$	9			$	97,363			$	122,097			$	(13	)		$	219,456
Employee Stock Purchase Plan			10,280				-				64				-				-			$	64
Exercise of stock options			1,250				-				11				-				-				11
Share-based compensation			15,172				-				311				-				-				311
Other comprehensive (loss), net of tax			-				-				-				-				(124	)			(124	)
Net income			-				-				-				895				-				895
Balance at June 30, 2023			9,087,370			$	9			$	97,749			$	122,992			$	(137	)		$	220,613

 

The accompanying notes are an integral part of these condensed consolidated financial statements.

 

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UNIVERSAL STAINLESS & ALLOY PRODUCTS, INC.

 

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

 

 

 

Note 1: Nature of Business and Basis of Presentation

 

Universal Stainless & Alloy Products, Inc., and its wholly-owned subsidiaries (collectively, “Universal,” “we,” “us,” “our,” or the “Company”), manufacture and market semi-finished and finished specialty steel products, including stainless steel, nickel alloys, tool steel and certain other alloyed steels. Our manufacturing process involves melting, remelting, heat treating, hot and cold rolling, forging, machining and cold drawing of semi-finished and finished specialty steels. Our products are sold to service centers, forgers, rerollers, original equipment manufacturers and wire redrawers. Our customers further process our products for use in a variety of industries, including the aerospace, power generation, oil and gas, heavy equipment, and general industrial manufacturing industries. We also perform conversion services on materials supplied by customers.

 

The accompanying unaudited condensed consolidated statements include the accounts of Universal Stainless & Alloy Products, Inc. and its subsidiaries and are prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”) for interim financial reports and the instructions for Form 10-Q and Rule 10-01 of Regulation S-X. Accordingly, certain information and footnote disclosures normally included in financial statements prepared under U.S. GAAP have been condensed or omitted pursuant to such regulations. Although the  December 31, 2023 condensed consolidated balance sheet data was derived from the audited consolidated financial statements, it does not include all disclosures required by U.S. GAAP. However, we believe that the disclosures are adequate to make the information presented not misleading. These condensed consolidated financial statements should be read in conjunction with our most recently audited consolidated financial statements and the notes thereto included in our Annual Report on Form 10-K as filed with the Securities and Exchange Commission. In the opinion of management, the accompanying condensed consolidated financial statements include all adjustments necessary to present a fair presentation of the condensed consolidated financial statements for the periods shown. Interim results are not necessarily indicative of the operating results for the full fiscal year or any future period. The preparation of these condensed consolidated financial statements in conformity with U.S. GAAP requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and disclosure of contingent assets and liabilities. Actual results may differ from our estimates. We also consolidate, regardless of our ownership percentage, variable interest entities (each a “VIE”) for which we are deemed to have a controlling financial interest. All intercompany transactions and balances have been eliminated.

 

When we obtain an economic interest in an entity, we evaluate the entity to determine if the entity is a VIE and if we are deemed to be a primary beneficiary. As a part of our evaluation, we are required to qualitatively assess if we are the primary beneficiary of the VIE based on whether we hold the power to direct those matters that most significantly impacted the activities of the VIE and the obligation to absorb losses or the right to receive the benefits of the VIE that could potentially be significant. Refer to Note 7, New Markets Tax Credit Financing Transaction, for a description of the VIEs included in our condensed consolidated financial statements.

 

Recently Adopted Accounting Pronouncements

 

None.

 

Recently Issued Accounting Pronouncements

 

The Company considers the applicability and impact of all Accounting Standards Updates ("ASUs"). Recently issued ASUs not listed were assessed and were determined not applicable, or are expected to have minimal impact on our condensed consolidated financial statements.

 

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Note 2: Net Income Per Common Share

 

The following table sets forth the computation of basic and diluted net income per common share:

 

		Three months ended								Six months ended
		June 30,								June 30,
(dollars in thousands, except per share amounts)		2024				2023				2024				2023
Numerator:
Net income		$	8,865			$	895			$	13,002			$	383
Denominator:
Weighted average number of shares of common stock outstanding			9,209,721				9,066,150				9,196,556				9,061,011
Weighted average effect of dilutive share-based compensation			633,750				206,510				558,185				149,830
Diluted weighted average number of shares of common stock outstanding			9,843,471				9,272,660				9,754,741				9,210,841
Net income per common share:
Net income per common share - Basic		$	0.96			$	0.10			$	1.41			$	0.04
Net income per common share - Diluted		$	0.90			$	0.10			$	1.33			$	0.04

 

The weighted average effect of dilutive share-based compensation was determined using the treasury stock method in all periods, and includes 349,670 shares for the effect of stock options outstanding and 284,080 shares for the effect of unvested restricted stock outstanding for the three month period ended June 30, 2024.  For the six month period ended  June 30, 2024, the calculation includes 292,918 shares for the effect of stock options outstanding and 265,267 shares for the effect of unvested restricted stock outstanding.

 

There were options to purchase 15,000 and 560,650 shares of common stock outstanding at a weighted average price of $31.27 and $19.74 for the three months ended  June 30, 2024 and 2023, respectively, which were excluded from the computation of diluted net income per common share. There were options to purchase 72,500 and 577,150 shares of common stock outstanding at a weighted average price of $27.15 and $19.49 for the six months ended June 30, 2024 and 2023, respectively, which were also excluded from the computation of diluted net income per common share. These options were excluded because their exercise prices were greater than the average market price of our common stock during each period.

 

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Note 3: Revenue Recognition

 

The Company’s revenues primarily include sales of products. Revenue is recognized when the Company satisfies its performance obligation under the contract by transferring the promised product to its customer that obtains control of the product. A performance obligation is a promise in a contract to transfer a distinct product to a customer. Most of the Company’s contracts have a single performance obligation, as the promise to transfer products or services is not separately identifiable from other promises in the contract and, therefore, not distinct.

 

Revenue is measured as the amount of consideration the Company expects to receive in exchange for transferring products. As such, revenue is recorded net of returns, allowances, customer discounts, and incentives. Sales and other taxes are excluded from revenues. Invoiced shipping and handling costs are included in revenue.

 

The Company’s revenue is primarily from products transferred to customers at a point in time. The Company recognizes revenue at the point in time in which the customer obtains control of the product, which is generally when product title passes to the customer upon shipment.

 

We have determined that there are certain customer agreements involving production of specified product grades and shapes that require over-time revenue recognition, in advance of shipment, as there is no alternative use for the product without significant economic loss, and the Company maintains an enforceable right to payment including a normal profit margin from the customer in the event of contract termination. The revenue is measured based on inputs expended in proportion to the total inputs the entity expects to expend to completely satisfy the performance obligation. The Company had revenue subject to over-time recognition of $4.2 million and $4.0 million during the six months ended  June 30, 2024 and 2023, respectively, and $1.8 million and $2.2 million during the three months ended June 30, 2024 and 2023, respectively. 

 

The timing of revenue recognition, customer billings, and cash collections resulted in contract assets related to services performed and not yet billed of $2.4 million and $2.0 million at June 30, 2024 and December 31, 2023, respectively. The Company recorded these contract assets within Accounts Receivable in the Condensed Consolidated Balance Sheets at each date.

 

We expect to satisfy all performance obligations related to revenue recognized in advance of shipment at June 30, 2024 within the next 12 months. 

 

The Company has elected the following practical expedients allowed under Accounting Standard Codification (“ASC”) 606, Revenue from Contracts with Customers ("ASC 606"):

 

●

Shipping of products is not considered a separate performance obligation.

 

●

Performance obligations are satisfied within one year from a given reporting date; consequently, we omit disclosure of the transaction price apportioned to remaining performance obligations on open orders.

 

The following summarizes our revenue by melt type:

 

		Three months ended June 30,								Six months ended June 30,
(in thousands)		2024				2023				2024				2023
Net sales:
Specialty alloys		$	61,583			$	54,947			$	117,838			$	102,496
Premium alloys (A)			20,715				12,866				40,808				30,522
Conversion services and other sales			461				1,202				1,750				1,862
Total net sales		$	82,759			$	69,015			$	160,396			$	134,880

 

(A)

Premium alloys represent all vacuum induction melted (VIM) products.

 

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Note 4: Inventory

 

Our raw material and starting stock inventory is primarily comprised of ferrous and non-ferrous scrap metal and alloys such as nickel, chromium, molybdenum, cobalt, vanadium and copper. Our semi-finished and finished steel products are work-in-process in various stages of production or are finished products waiting to be shipped to our customers.

 

Operating materials are primarily comprised of forge dies and production molds and rolls that are consumed over their useful lives. During the six months ended June 30, 2024 and 2023, we amortized these operating materials in the amount of $0.9 million and $0.9 million, respectively, and during the three months ended June 30, 2024 and 2023, $0.4 million and $0.5 million, respectively.  This expense is recorded as a component of cost of products sold in the condensed consolidated statements of operations and included as a part of our total depreciation and amortization on the condensed consolidated statement of cash flows.

 

Inventory is stated at the lower of cost or net realizable value with cost principally determined on a weighted average cost method. Such costs include the acquisition cost for raw materials and supplies, direct labor and applied manufacturing overhead. We assess market based upon actual and estimated transactions at or around the balance sheet date. Typically, we reserve for slow-moving inventory and inventory that is being evaluated under our quality control process. The reserves are based upon management’s expected method of disposition.

 

Inventory consisted of the following:

 

		June 30,				December 31,
(in thousands)		2024				2023
Raw materials and starting stock		$	18,845			$	15,124
Semi-finished and finished steel products			114,963				117,039
Operating materials			18,747				15,967
Gross inventory			152,555				148,130
Inventory reserves			(3,462	)			(3,430	)
Total inventory		$	149,093			$	144,700

 

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Note 5: Leases

 

The Company periodically enters into leases in its normal course of business. At June 30, 2024 and December 31, 2023, the leases in effect were primarily related to mobile equipment and other production equipment. The term of our leases is generally 72 months or less, and the leases do not have significant restrictions, covenants, or other nonstandard terms.

 

Right-of-use assets and lease liabilities are recorded at the present value of minimum lease payments. For our operating leases, the assets are included in Other long-term assets on the condensed consolidated balance sheets and are amortized within operating income over the respective lease terms. The long-term component of the lease liability is included in Other long-term liabilities, net, and the current component is included in Other current liabilities. For our finance leases, the assets are included in Property, plant and equipment, net on the condensed consolidated balance sheets and are depreciated over the respective lease terms which range from three to six years. The long-term component of the lease liability is included in Long-term debt and the current component is included in Current portion of long-term debt.

 

The Company did not enter into any new lease agreements in the first six months of 2024.  The Company entered into one new finance lease agreement in the first quarter of 2023.

 

As of  June 30, 2024, future minimum lease payments applicable to operating and finance leases were as follows:

 

(in thousands)		Operating Leases				Finance Leases
Remainder of 2024		$	73			$	977
2025			36				1,841
2026			21				1,714
2027			2				1,570
2028			-				1,114
Total minimum lease payments			132				7,216
Less amounts representing interest			(3	)			(1,368	)
Present value of minimum lease payments			129				5,848
Less current obligations			(96	)			(1,403	)
Total long-term lease obligations, net		$	33			$	4,445
Weighted-average remaining lease term (in years)			1.4				3.7

 

Right-of-use assets recorded to the condensed consolidated balance sheet at June 30, 2024, net of accumulated amortization, were $0.1 million for operating leases and $5.8 million for finance leases. For the six months ended June 30, 2024, the amortization of finance lease assets was $0.4 million and was included in cost of products sold in the condensed consolidated statements of operations.  For the three months ended June 30, 2024, the amortization of finance lease assets was $0.2 million and was included in cost of products sold in the condensed consolidated statements of operations.  Right-of-use assets recorded to the condensed consolidated balance sheet at December 31, 2023, net of accumulated amortization, were $0.2 million for operating leases and $6.5 million for finance leases.

 

The unamortized portion of the $5.2 million lease component of our VAR expansion financing arrangement is included in the right-of-use asset total, while the sale and leaseback component of that agreement is excluded. The sale and leaseback component is accounted for as a loan secured by the related equipment, as it did not meet the criteria for sale accounting under ASC 842, Leases ("ASC 842"). This financing agreement was executed in December 2022 and had a $7.0 million total original principal amount, original term of 72 months, and implicit interest rate of approximately 11.2%. The weighted average interest rate on all our financing leases is approximately 10.0%.

 

The Company applies the practical expedient allowed under ASC 842 to exclude leases with a term of 12 months or less from the calculation of our lease liabilities and right-of-use assets.

 

In determining the lease liability and corresponding right-of-use asset for each lease, the Company calculated the present value of future lease payments using the interest rate implicit in the lease, when available, or the Company’s incremental borrowing rate. The incremental borrowing rate was determined with reference to the interest rate applicable under revolving credit facility discussed in Note 6, Long-Term Debt, as this facility is collateralized by a first lien on substantially all of the assets of the Company and its term is similar to the term of our leases.

 

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Note 6: Long-Term Debt

 

Long-term debt consisted of the following:

 

		June 30,				December 31,
(in thousands)		2024				2023
Revolving credit facility		$	63,408			$	68,984
Term loan			8,572				9,643
Sale and leaseback financing liability			1,426				1,539
Finance leases			5,848				6,508
Total debt			79,254				86,674
Less: current portion of long-term debt			(3,810	)			(3,733	)
Less: deferred financing costs			(964	)			(1,095	)
Long-term debt, net		$	74,480			$	81,846

 

Credit Facility

 

On March 17, 2021, we entered into the Second Amended and Restated Revolving Credit, Term Loan and Security Agreement (the “Credit Agreement”), with PNC Bank, National Association, as administrative agent and co-collateral agent (the “Agent”), Bank of America, N.A., as co-collateral agent (“Bank of America”), the Lenders (as defined in the Credit Agreement) party thereto from time to time and PNC Capital Markets LLC, as sole lead arranger and sole bookrunner. The Credit Agreement provides for a senior secured revolving credit facility in an aggregate principal amount not to exceed $105.0 million (“Revolving Credit Facility”) and a senior secured term loan facility (“Term Loan”) in the amount of $15.0 million (together with the Revolving Credit Facility, the “Facilities”).  At June 30, 2024, we maintained approximately, $41.6 million of remaining availability under the Revolving Credit Facility.

 

At June 30, 2024, we had total Credit Agreement related net deferred financing costs of approximately $0.4 million. For the six months ended June 30, 2024 and 2023, we amortized approximately $0.1 million of deferred financing costs, and for the three months ended June 30, 2024 and 2023, we amortized approximately $0.1 million and $0.1 million, respectively.

 

The Credit Agreement requires the Company to maintain compliance with all the applicable financial covenants throughout the term of the Credit Agreement. As of June 30, 2024, we are in compliance with all applicable financial covenants.

 

The Facilities, which expire on March 17, 2026 (the ‘Expiration Date”), are collateralized by a first lien on substantially all of the assets of the Company and its subsidiaries, except that no real property is collateral under the Facilities other than Company’s real property in North Jackson, Ohio.

 

Availability under the Credit Agreement is based on eligible accounts receivable and inventory. The Company must maintain undrawn availability under the Credit Agreement of at least $11.0 million until it maintains a fixed charge coverage ratio ("FCCR") of not less than 1.1 to 1.0 measured on a rolling two-quarter basis, calculated in accordance with the terms of the Credit Agreement. The Company achieved its second consecutive quarter of its FCCR greater than 1.1 for the period December 31, 2023 and has since maintained the ratio above the required level.

 

The Company is required to pay a commitment fee of 0.25% based on the daily unused portion of the Revolving Credit Facility.

 

With respect to the Term Loan, the Company pays quarterly installments of the principal of approximately $0.5 million, plus accrued and unpaid interest, on the first day of each fiscal quarter beginning after June 30, 2021. To the extent not previously paid, the Term Loan will become due and payable in full on the Expiration Date.

 

Amounts outstanding under the Facilities, at the Company’s option, bear interest at the current SOFR rate plus a spread, calculated in accordance with the terms of the Credit Agreement. Interest under the Credit Agreement is payable monthly. We elected to use the SOFR based rate for the majority of the debt outstanding under the Facilities for the six months ended June 30, 2024, which approximated 7.9% for commitments under our Revolving Credit Facility and 8.4% for the Term Loan.

 

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Note 7: New Markets Tax Credit Financing Transaction

 

On March 9, 2018, the Company entered into a qualified New Markets Tax Credit (“NMTC”) financing program with PNC New Markets Investment Partners, LLC and Boston Community Capital, Inc. related to a new mid-size bar cell capital project at the Company’s Dunkirk, NY facility. PNC New Markets Investment Partners, LLC made a capital contribution and the Company made a loan to Dunkirk Investment Fund, LLC (“Investment Fund”) under the qualified NMTC program. Through this financing transaction, the Company secured low interest financing and the potential for other future benefits related to its mid-size bar cell capital project.

 

In connection with the NMTC financing program, the Company loaned $6.7 million aggregate principal amount (“Leverage Loan”) due in March 2048, to the Investment Fund. Additionally, PNC New Markets Investment Partners, LLC contributed $3.5 million to the Investment Fund, and as such, PNC New Markets Investment Partners, LLC is entitled to substantially all tax and other benefits derived from the NMTC. The Investment Fund then contributed the proceeds to a community development entity (“CDE”). The CDE then loaned the funds, on similar terms, as the Leverage Loan to Dunkirk Specialty Steel, LLC, a wholly-owned subsidiary of the Company. The CDE loan proceeds are restricted for use on the mid-size bar cell capital project.

 

The NMTC is subject to 100 percent recapture for a period of seven years as provided in the Internal Revenue Code. The Company is required to comply with various regulations and contractual provisions that apply to the NMTC arrangement. Non-compliance with applicable requirements could result in projected tax benefits not being realized and, therefore, require the Company to indemnify PNC New Markets Investment Partners, LLC for any loss or recapture of NMTCs related to the financing until the Company’s obligation to deliver tax benefits is relieved. The Company does not anticipate any credit recaptures will be required in connection with this arrangement.

 

As of June 30, 2024 and December 31, 2023, the Company recorded $2.8 million within Other long-term liabilities related to this transaction, which represents the funds contributed to the Investment Fund by PNC New Markets Investment Partners, LLC.

 

This transaction also includes a put/call provision whereby the Company may be obligated or entitled to repurchase PNC New Markets Investment Partners, LLC’s interest in the Investment Fund. The Company believes that PNC New Markets Investment Partners, LLC will exercise the put option in the second half of 2024, resulting in a gain of $2.8 million at that time. The value attributed to the put/call is negligible.

 

Direct costs incurred in structuring this financing transaction totaled $0.7 million. These costs were deferred and amortized over the term of the loans.

 

The Company has determined that the Investment Fund and CDE are each a VIE, and that it is the primary beneficiary of each VIE. This conclusion was reached based on the following:

 

●

The ongoing activities of the VIE, collecting and remitting interest and fees, and NMTC compliance were all considered in the initial design and are not expected to significantly affect economic performance throughout the life of the VIE;

 

●

Contractual arrangements obligate the Company to comply with NMTC rules and regulations and provide various other guarantees to the Investment Fund and CDE;

 

●

PNC New Markets Investment Partners, LLC lacks a material interest in the underlying economics of the project; and

 

●

The Company is obligated to absorb losses of the VIE.

 

Because the Company is the primary beneficiary of each VIE, these entities have been included in the Company’s condensed consolidated financial statements.

 

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Note 8: Fair Value Measurement

 

The fair value hierarchy has three levels based on the inputs used to determine fair value, which are as follows:

 

Level 1 — Unadjusted quoted prices available in active markets for the identical assets or liabilities at the measurement date.

 

Level 2 — Unadjusted quoted prices in active markets for similar assets or liabilities, or unadjusted quoted prices for identical or similar assets or liabilities in markets that are not active, or inputs other than quoted prices that are observable for the asset or liability.

 

Level 3 — Unobservable inputs that cannot be corroborated by observable market data and reflect the use of significant management judgment. These values are generally determined using pricing models for which the assumptions utilize management’s estimates of market participant assumptions.

 

The fair value hierarchy requires the use of observable market data when available. In instances where the inputs used to measure fair value fall into different levels of the fair value hierarchy, the fair value measurement has been determined based on the lowest level input significant to the fair value measurement in its entirety. Our assessment of the significance of a particular item to the fair value measurement in its entirety requires judgment, including the consideration of inputs specific to the asset or liability.

 

The fair value of the Term Loan and Revolving Credit Facility at  June 30, 2024 and December 31, 2023 approximated the carrying amount as the interest rate is based upon observable market interest rates (Level 2). The fair values of foreign currency forward contracts and our interest rate swap discussed in Note 11, Derivatives and Hedging, at June 30, 2024 and December 31, 2023 were determined using observable market swap rates (Level 2).

 

 

Note 9: Commitments and Contingencies

 

From time to time, various lawsuits and claims have been or may be asserted against us relating to the conduct of our business, including routine litigation relating to commercial and employment matters. The ultimate cost and outcome of any litigation or claim cannot be predicted with certainty. Management believes, based on information presently available, that the likelihood that the ultimate outcome of any such pending matter will have a material adverse effect on our financial condition, or liquidity or a material impact on our results of operations is remote, although the resolution of one or more of these matters may have a material adverse effect on our results of operations for the period in which the resolution occurs.

 

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Note 10: Income Taxes

 

Management estimates the annual effective income tax rate quarterly based on forecasted full year results. Items unrelated to current year ordinary income are recognized entirely in the period identified as a discrete item of tax. The quarterly income tax provision includes tax on ordinary income provided at the most recent estimated annual effective tax rate (“ETR”), increased or decreased for the tax effect of discrete items.

 

For the six months ended June 30, 2024 and 2023, our estimated annual effective tax rates applied to ordinary income were 20.0% and 10.4%, respectively. In all periods, the projected annual ETR differs from the federal statutory rate of 21.0% primarily due to the impact of research and development credits. State taxes are not a significant component of the rate. 

 

Discrete items during the six months ended June 30, 2024 and 2023 were related to share-based compensation items and totaled approximately $0.1 million of a benefit and $0.1 million of expense, respectively. The ETR for each period was 19.3% and 23.7%, respectively.  Discrete items during the three months ended June 30, 2024 and 2023 were not significant and the ETR for each period was 18.9% and 14.2% respectively.

 

 

Note 11: Derivatives and Hedging

 

The Company invoices certain customers in foreign currencies. In order to mitigate the risks associated with fluctuations in exchange rates with the U.S. Dollar, the Company entered into foreign exchange forward contracts to mitigate the foreign currency risk related to a portion of these sales, and has designated these contracts as cash flow hedges.

 

The notional value of contracts was $4.0 million and $4.8 million at June 30, 2024 and December 31, 2023, respectively.

 

The Company recorded an unrealized loss in accumulated other comprehensive income (loss) of approximately $0.1 million at both  June 30, 2024 and December 31, 2023 related to the contracts.

 

The Company entered into a forward interest rate swap contract during 2020 to fix the interest rate on a portion of its variable-rate debt from January 1, 2021 to June 30, 2023. The interest rate swap was designated as a cash flow hedge. The notional amount of the contract was $5 million during the first half of 2023 until it matured on June 30, 2023. 

 

 

Note 12: Related Parties

 

None.

 

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Item 2.         MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

 

Forward-Looking Statements

 

This Quarterly Report on Form 10-Q contains or incorporates forward-looking statements within the meaning of the Private Securities Reform Act of 1995, which involves risks and uncertainties. The following information should be read in conjunction with the unaudited condensed consolidated financial information and the notes thereto included in this Quarterly Report on Form 10-Q. You should not place undue reliance on these forward-looking statements. Actual events or results may differ materially due to competitive factors and other factors referred to in Part 1A. Risk Factors in our Annual Report on Form 10-K for the year ended December 31, 2023, our other filings with the Securities and Exchange Commission and elsewhere in this Quarterly Report. These factors may cause our actual results to differ materially from any forward-looking statement. These forward-looking statements are based on current expectations, estimates, forecasts, and projections about the industry and markets in which we operate, and management’s beliefs and assumptions. In addition, other written or oral statements that constitute forward-looking statements may be made by us or on our behalf. Words such as “expect,” “anticipate,” “intend,” “plan,” “believe,” “could,” “estimate,” “may,” “target,” “project,” or variations of such words and similar expressions are intended to identify such forward-looking statements. These statements are not guarantees of future performance and involve risks, uncertainties, and assumptions that are difficult to predict.

 

Overview

 

We manufacture and market semi-finished and finished specialty steel products, including stainless steel, nickel alloys, tool steel and certain other alloyed steels. Our manufacturing process involves melting, remelting, heat treating, hot and cold rolling, forging, machining and cold drawing of semi-finished and finished specialty steels. Our products are sold to service centers, forgers, rerollers, and original equipment manufacturers. Our customers further process our products for use in a variety of industries, including the aerospace, energy, heavy equipment and general industrial markets. We also perform conversion services on material supplied by our customers.

 

Sales in the second quarter of 2024 were $82.8 million, which is the highest total in company history, surpassing its record $79.8 million reported in the fourth quarter of 2023, and 20% higher than the second quarter 2023 total of $69.0 million. Our largest end market, aerospace, totaled $68.6 million, or 82.9% of total sales. Aerospace and defense applications are driving high demand for the Company's premium alloys and finished bar products. 

 

Total Company backlog at June 30, 2024, before surcharges applied at the time of shipment, was $296.5 million. We maintain a healthy level of order entry and a strong total backlog resulting from sustained high demand for our products.

 

Sales of premium alloy products, which we define as all vacuum induction melt products, totaled $20.7 million in the second quarter of 2024 compared to a record $21.1 million in the fourth quarter of 2023, and $12.9 million in the second quarter of 2023. We expect premium alloy sales to continue to grow in the foreseeable future.

 

Our gross margin for the second quarter of 2024 established a new company record at $21.0 million, or 25.4% of net sales, an increase from 18.9% in the first quarter of 2023 and 14.3% in the second quarter of 2023. Our gross margin expansion reflects the impact of our cost improvement initiatives, higher base prices, and higher mix of aerospace market sales. The record gross margin drove higher operating income of $12.8 million and net income of $8.9 million for the quarter, or $0.90 per diluted share.  

 

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Results of Operations

 

Three months ended June 30, 2024 as compared to the three months ended June 30, 2023:

 

		Three months ended June 30,
(in thousands)		2024								2023
		Amount				Percentage of net sales				Amount				Percentage of net sales				Dollar variance				Percentage variance
Net sales		$	82,759				100.0	%		$	69,015				100.0	%		$	13,744				19.9	%
Cost of products sold			61,746				74.6				59,167				85.7				2,579				4.4
Gross margin			21,013				25.4				9,848				14.3				11,165				113.4
Selling, general and administrative expenses			8,164				9.9				6,755				9.8				1,409				20.9
Operating income			12,849				15.5				3,093				4.5				9,756				315.4
Interest expense			1,902				2.3				2,045				3.0				(143	)			(7.0	)
Other expense (income), net			22				-				5				-				17				340.0
Income before income taxes			10,925				13.2				1,043				1.5				9,882				NM
Income taxes			2,060				2.5				148				0.2				1,912				NM
Net income		$	8,865				10.7	%		$	895				1.3	%		$	7,970				NM
Tons shipped			7,505								8,186								(681	)			(8.3	)

 

Market Segment Information

		Three months ended June 30,
(in thousands)		2024								2023
		Amount				Percentage of net sales				Amount				Percentage of net sales				Dollar variance				Percentage variance
Net sales:
Service centers		$	61,589				74.3	%		$	53,837				78.1	%		$	7,752				14.4	%
Original equipment manufacturers			6,778				8.2				3,868				5.6				2,910				75.2
Rerollers			2,866				3.5				3,682				5.3				(816	)			(22.2	)
Forgers			11,065				13.4				6,426				9.3				4,639				72.2
Conversion services and other			461				0.6				1,202				1.7				(741	)			(61.6	)
Total net sales		$	82,759				100.0	%		$	69,015				100.0	%		$	13,744				19.9	%

 

Melt Type Information

		Three months ended June 30,
(in thousands)		2024								2023
		Amount				Percentage of net sales				Amount				Percentage of net sales				Dollar variance				Percentage variance
Net sales:
Specialty alloys		$	61,583				74.4	%		$	54,947				79.7	%		$	6,636				12.1	%
Premium alloys (A)			20,715				25.0				12,866				18.6				7,849				61.0
Conversion services and other			461				0.6				1,202				1.7				(741	)			(61.6	)
Total net sales		$	82,759				100.0	%		$	69,015				100.0	%		$	13,744				19.9	%

 

(A)	Premium alloys represent all vacuum induction melted (VIM) products.

 

 

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The majority of our products are sold to service centers rather than the ultimate end market customers. The end market information in this Quarterly Report is our estimate based upon our knowledge of our customers and the grade of material sold to them, which they will in-turn sell to the ultimate end market customer.

 

End Market Information

		Three months ended June 30,
(in thousands)		2024								2023
		Amount				Percentage of net sales				Amount				Percentage of net sales				Dollar variance				Percentage variance
Net sales:
Aerospace		$	68,628				82.9	%		$	51,262				74.3	%		$	17,366				33.9	%
Energy			5,143				6.2				4,384				6.4				759				17.3
Heavy equipment			5,202				6.3				8,928				12.9				(3,726	)			(41.7	)
General industrial, conversion services and other			3,786				4.6				4,441				6.4				(655	)			(14.7	)
Total net sales		$	82,759				100.0	%		$	69,015				100.0	%		$	13,744				19.9	%

 

Net sales:

Net sales for the three months ended June 30, 2024 increased $13.7 million, or 19.9%, compared to the same period in the prior year. This reflects higher base prices and a higher mix of finished bar, premium, and aerospace products. The increase in our base selling prices applies to substantially all our products, but is highest in our aerospace end market and driven by strong demand.

 

Gross margin:

As a percent of sales, our gross margin for the three months ended June 30, 2024 was 25.4% compared to 14.3% for the same period in the prior year. The increase includes higher base selling prices and cost improvements.

 

Selling, general and administrative expenses:

Our selling, general and administrative (“SG&A”) expenses consist primarily of employee-related costs, which include salaries, payroll taxes and benefit related costs, insurance costs and professional services. SG&A expenses increased by $1.4 million for the three months ended June 30, 2024 compared to the same period in the prior year due to increases in insurance costs and employee-related costs.

 

Interest expense and other financing costs:

Interest expense totaled approximately $1.9 million in the second quarter of 2024 compared to $2.0 million in the second quarter of 2023.

 

Income taxes:

Management estimates the annual effective income tax rate quarterly based on forecasted full year results. Items unrelated to current year ordinary income are recognized entirely in the period identified as a discrete item of tax. The quarterly income tax provision includes tax on ordinary income provided at the most recent estimated annual effective tax rate (“ETR”), increased or decreased for the tax effect of discrete items.

 

For the three months ended June 30, 2024 and 2023 , our estimated annual effective tax rates applied to ordinary income were 20.0% and 10.4%, respectively. In both periods, the projected annual ETR differs from the federal statutory rate of 21.0% primarily due to the impact of research and development credits. Discrete items were related to share-based compensation items and the ETR for each period was 18.9% and 14.2%, respectively.

 

Net income:

For the three months ended June 30, 2024, the Company earned net income of $8.9 million, or $0.90 per diluted share, compared to a net income of $0.9 million, or $0.10 per diluted share, for the three months ended June 30, 2023.

 

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Six months ended June 30, 2024 as compared to the six months ended June 30, 2023:

 

		Six months ended June 30,
(in thousands)		2024								2023
		Amount				Percentage of net sales				Amount				Percentage of net sales				Dollar variance				Percentage variance
Net sales		$	160,396				100.0	%		$	134,880				100.0	%			25,516				18.9	%
Cost of products sold			124,716				77.8				117,308				87.0				7,408				6.3
Gross margin			35,680				22.2				17,572				13.0				18,108				103.1
Selling, general and administrative expenses			15,573				9.7				13,030				9.7				2,543				19.5
Operating income			20,107				12.5				4,542				3.4				15,565				342.7
Interest expense			3,951				2.5				4,077				3.0				(126	)			(3.1	)
Other income, net			36				-				(37	)			-				73				(197.3	)
Income before income taxes			16,120				10.0				502				0.4				15,618				NM
Income taxes			3,118				1.9				119				0.1				2,999				NM
Net income		$	13,002				8.1	%		$	383				0.3	%		$	12,619				NM
Tons shipped			15,024								15,689								(665	)			(4.2	)

 

 

Market Segment Information

		Six months ended June 30,
(in thousands)		2024								2023
		Amount				Percentage of net sales				Amount				Percentage of net sales				Dollar variance				Percentage variance
Net sales:
Service centers		$	119,860				74.7	%		$	103,160				76.4	%		$	16,700				16.2	%
Original equipment manufacturers			13,632				8.5				8,076				6.0				5,556				68.8
Rerollers			6,243				3.9				10,327				7.7				(4,084	)			(39.5	)
Forgers			18,911				11.8				11,455				8.5				7,456				65.1
Conversion services and other sales			1,750				1.1				1,862				1.4				(112	)			(6.0	)
Total net sales		$	160,396				100.0	%		$	134,880				100.0	%		$	25,516				18.9	%

 

Melt Type Information

		Six months ended June 30,
(in thousands)		2024								2023
		Amount				Percentage of net sales				Amount				Percentage of net sales				Dollar variance				Percentage variance
Net sales:
Specialty alloys		$	117,838				73.5	%		$	102,496				76.0	%		$	15,342				15.0	%
Premium alloys (A)			40,808				25.4				30,522				22.6				10,286				33.7
Conversion services and other sales			1,750				1.1				1,862				1.4				(112	)			(6.0	)
Total net sales		$	160,396				100.0	%		$	134,880				100.0	%		$	25,516				18.9	%

 

(A)	Premium alloys represent all vacuum induction melted (VIM) products.

 

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The majority of our products are sold to service centers rather than the ultimate end market customers. The end market information in this Quarterly Report is our estimate based upon our knowledge of our customers and the grade of material sold to them, which they will in-turn sell to the ultimate end market customer.

 

End Market Information

		Six months ended June 30,
(in thousands)		2024								2023
		Amount				Percentage of net sales				Amount				Percentage of net sales				Dollar variance				Percentage variance
Net sales:
Aerospace		$	128,836				80.3	%		$	100,220				74.2	%		$	28,616				28.6	%
Energy			11,156				7.0				10,222				7.6				934				9.1
Heavy equipment			11,050				6.9				15,859				11.8				(4,809	)			(30.3	)
General industrial, conversion services and other sales			9,354				5.8				8,579				6.4				775				9.0
Total net sales		$	160,396				100.0	%		$	134,880				100.0	%		$	25,516				18.9	%

 

Net sales:

Net sales for the six months ended June 30, 2024 increased $25.5 million, or 18.9%, compared to the same period in the prior year. This reflects higher base prices and a higher mix of finished bar, aerospace and premium products. The increase in our base selling prices applies to substantially all our products, but is highest in our aerospace end market and driven by strong demand.

 

Gross margin:

As a percent of sales, our gross margin for the six months ended June 30, 2024 was 22.2% compared to 13.0% for the same period in the prior year. The increase includes higher base selling prices and cost improvements.

 

Selling, general and administrative expenses:

Our selling, general and administrative (“SG&A”) expenses consist primarily of employee-related costs, which include salaries, payroll taxes and benefit related costs, insurance costs and professional services. SG&A expenses increased by $2.5 million for the six months ended June 30, 2024 compared to the same period in the prior year due to increases in insurance costs and employee-related costs. SG&A expenses were 9.7% of net sales in each period.

 

Interest expense and other financing costs:

Interest expense totaled approximately $4.0 million in the first six months of 2024 compared to $4.1 million in the first six months of 2023.

 

Income taxes:

Management estimates the annual effective income tax rate quarterly based on forecasted full year results. Items unrelated to current year ordinary income are recognized entirely in the period identified as a discrete item of tax. The quarterly income tax provision includes tax on ordinary income provided at the most recent estimated annual effective tax rate (“ETR”), increased or decreased for the tax effect of discrete items.

 

For the six months ended June 30, 2024 and 2023 , our estimated annual effective tax rates applied to ordinary income were 20.0% and 10.4%, respectively. In both periods, the projected annual ETR differs from the federal statutory rate of 21.0% primarily due to the impact of research and development credits. State taxes are not a significant component of the rate. 

 

Discrete items during the six months ended June 30, 2024 and 2023 were related to share-based compensation items and totaled approximately $0.1 million of a benefit and $0.1 million of expense, respectively. The ETR for each period was 19.3% and 23.7%, respectively.

 

Net income:

For the six months ended June 30, 2024, the Company earned net income of $13.0 million, or $1.33 per diluted share, compared to a net income of $0.4 million, or $0.04 per diluted share, for the six months ended June 30, 2023.

 

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Liquidity and Capital Resources

 

Historically, we have financed our operations through cash provided by operating activities and borrowings on our credit facilities. At June 30, 2024, we maintained approximately $41.6 million of remaining availability under our revolving credit facility.

 

We believe that our cash flows from continuing operations, as well as available borrowings under our credit facility are adequate to satisfy our working capital, capital expenditure requirements, and other contractual obligations for the foreseeable future, including at least the next 12 months.

 

Net cash provided by operating activities:

 

During the six months ended June 30, 2024, our operating activities generated $17.5 million of cash. Our net income, after adjustments for non-cash expenses, generated $26.8 million. This includes a use of $7.5 million to grow our managed working capital, which we define as net accounts receivable, plus inventory, minus accounts payable. We used $1.8 million from our other assets and liabilities.

 

During the six months ended June 30, 2023, our operating activities generated $11.2 million of cash. Our net income, after adjustments for non-cash expenses, generated $10.7 million. We used $0.3 million on our managed working capital, which we define as net accounts receivable, plus inventory, minus accounts payable, and generated $0.8 million from our other assets and liabilities.

 

Net cash used in investing activities:

 

During the six months ended June 30, 2024, we used $10.9 million of cash for capital expenditures, compared to $6.9 million for the same period in the prior year. 

 

Net cash (used in) financing activities:

 

We used $7.0 million of cash in financing activities for the six months ended June 30, 2024, primarily to make $5.6 million in net payments on our revolving credit facility and $1.8 million in payments on our term loan and finance leases. 

 

20

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Table of Contents

 

Raw materials

 

The cost of raw materials represents approximately 40% to 45% of the cost of products sold in the first six months of 2024 and 2023. The major raw materials used in our operations include nickel, molybdenum, vanadium, chromium, iron and carbon scrap.  We maintain a sales price surcharge within our product pricing to mitigate the risk of substantial raw material cost fluctuations. Over time, our surcharge will effectively offset changes in raw material costs; however, during a period of rising or falling prices the timing will cause variation between reporting periods.

 

Leases

 

The Company periodically enters into leases in its normal course of business. At June 30, 2024 and December 31, 2023, the leases in effect were primarily related to mobile equipment and other production equipment. The term of our leases is generally 72 months or less, and the leases do not have significant restrictions, covenants, or other nonstandard terms.

 

Right-of-use assets and lease liabilities are recorded at the present value of minimum lease payments. For our operating leases, the assets are included in Other long-term assets on the condensed consolidated balance sheets and are amortized within operating income over the respective lease terms. The long-term component of the lease liability is included in Other long-term liabilities, net, and the current component is included in Other current liabilities. For our finance leases, the assets are included in Property, plant and equipment, net on the condensed consolidated balance sheets and are depreciated over the respective lease terms which range from three to six years. The long-term component of the lease liability is included in Long-term debt and the current component is included in Current portion of long-term debt.

 

The Company did not enter into any new leases during the six months ended June 30, 2024.

 

21

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Credit Facility   

 

On March 17, 2021, we entered into the Second Amended and Restated Revolving Credit, Term Loan and Security Agreement (the “Credit Agreement”), with PNC Bank, National Association, as administrative agent and co-collateral agent (the “Agent”), Bank of America, N.A., as co-collateral agent (“Bank of America”), the Lenders (as defined in the Credit Agreement) party thereto from time to time and PNC Capital Markets LLC, as sole lead arranger and sole bookrunner. The Credit Agreement provides for a senior secured revolving credit facility in an aggregate principal amount not to exceed $105.0 million (“Revolving Credit Facility”) and a senior secured term loan facility (“Term Loan”) in the amount of $15.0 million (together with the Revolving Credit Facility, the “Facilities”).

 

At June 30, 2024, we had total Credit Agreement related net deferred financing costs of approximately $0.4 million. For the six months ended June 30, 2024 and 2023, we amortized approximately $0.1 million of those deferred financing costs.

 

The Credit Agreement requires the Company to maintain compliance with all the applicable financial covenants throughout the term of the Credit Agreement. As of June 30, 2024, we are in compliance with all applicable financial covenants.

 

The Facilities, which expire on March 17, 2026 (the ‘Expiration Date”), are collateralized by a first lien on substantially all of the assets of the Company and its subsidiaries, except that no real property is collateral under the Facilities other than Company’s real property in North Jackson, Ohio.

 

Availability under the Credit Agreement is based on eligible accounts receivable and inventory. The Company must maintain undrawn availability under the Credit Agreement of at least $11.0 million until it maintains a fixed charge coverage ratio ("FCCR") of not less than 1.1 to 1.0 measured on a rolling two-quarter basis, calculated in accordance with the terms of the Credit Agreement. The Company achieved its second consecutive quarter of its FCCR greater than 1.1 for the period December 31, 2023 and has since maintained the ratio above the required level.

 

The Company is required to pay a commitment fee of 0.25% based on the daily unused portion of the Revolving Credit Facility.

 

With respect to the Term Loan, the Company pays quarterly installments of the principal of approximately $0.5 million, plus accrued and unpaid interest, on the first day of each fiscal quarter beginning after June 30, 2021. To the extent not previously paid, the Term Loan will become due and payable in full on the Expiration Date.

 

Amounts outstanding under the Facilities, at the Company’s option, bear interest at the current SOFR rate plus a spread, calculated in accordance with the terms of the Credit Agreement. Interest under the Credit Agreement is payable monthly. We elected to use the SOFR based rate for the majority of the debt outstanding under the Facilities for the six months ended June 30, 2024, which approximated 7.9% for commitments under our Revolving Credit Facility and 8.4% for the Term Loan.

 

22

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Item 3.         QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

 

The Company has reviewed its market risk and believes there are no significant changes from that disclosed in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023, except as provided in this Form 10-Q in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and in Part II. Item 1A. “Risk Factors.”

 

Item 4.         CONTROLS AND PROCEDURES

 

The Company’s management, including the Company’s President and Chief Executive Officer and its Vice President and Chief Financial Officer, performed an evaluation of the effectiveness of the Company’s disclosure controls and procedures. Based on that evaluation, the Company’s President and Chief Executive Officer and its Vice President and Chief Financial Officer concluded that, as of the end of the fiscal period covered by this quarterly report, the Company’s disclosure controls and procedures are not effective due to material weaknesses discussed in the Form 10-K as of December 31, 2023 filed in March 2024.

 

Our management has taken actions to remediate the material weaknesses in internal control over financial reporting, which include but are not limited to:

-  Enhancement of its risk assessment and scoping process;

-  Expansion of the internal audit team and scope of services; 

-  Enhancement of the design and operation of internal control procedures;

-  Expanded documentation and evidence retention during its financial reviews;

-  Additional training to ensure a clear understanding of risk assessment, control execution, and monitoring activities throughout the organization; and

-  Continuing to expand the available resources at the Company with experience designing and implementing control activities.

 

We are committed to these enhancements, and believe they will ultimately remediate the material weaknesses; however, material weaknesses are not considered remediated until the new controls have been operational for a period of time, are tested, and management concludes that these controls are operating effectively. This remediation process may require additional resources and will require time to fully implement and execute.

 

During the fiscal quarter ended June 30, 2024, there were no changes in the Company’s internal control over financial reporting which have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

 

23

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Table of Contents

 

 

Part II.        OTHER INFORMATION

 

Item 1.         LEGAL PROCEEDINGS

 

There are no material changes from the legal proceedings disclosed in Item 3. of the Company’s Annual Report on Form 10-K for the year ended December 31, 2023.

 

Item 1A.       RISK FACTORS

 

In addition to the other information set forth in this Quarterly Report on Form 10-Q, the factors discussed in Part I, “Item 1A. Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2023 could materially affect our business, financial conditions or future results. Those risk factors are not the only risks facing us. Additional risks and uncertainties not currently known or that we currently deem to be immaterial also may materially adversely affect our business, financial condition or operating results. We believe that there have been no material changes in our risk factors from those disclosed in our Annual Report on Form 10-K for the year ended December 31, 2023.

 

Item 2.         UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

 

None.

 

Item 3.         DEFAULTS UPON SENIOR SECURITIES

 

None.

 

Item 4.         MINE SAFETY DISCLOSURES

 

Not Applicable.

 

Item 5.         OTHER INFORMATION

 

Not Applicable.

 

 

24

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Table of Contents

 

Item 6.         EXHIBITS

 

Exhibit Number		Exhibit
31.1		Certification of Chief Executive Officer pursuant to Rule 13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (filed herewith).
31.2		Certification of Chief Financial Officer pursuant to Rule 13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (filed herewith).
32.1		Certification of Chief Executive Officer and Chief Financial Officer pursuant to Rule 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (filed herewith).
101		The following financial information from this Quarterly Report on Form 10-Q for the fiscal quarter ended June 30, 2024, formatted in Inline XBRL (Extensible Business Reporting Language) and filed electronically herewith: (i) the Condensed Consolidated Balance Sheets; (ii) the Condensed Consolidated Statements of Operations; (iii) the Condensed Consolidated Statements of Comprehensive Income (Loss); (iv) the Condensed Consolidated Statements of Cash Flows; the Condensed Consolidated Statements of Shareholders’ Equity; and (v) the Notes to the Condensed Consolidated Financial Statements (filed herewith).
104		Cover Page Interactive Data File (formatted as Inline XBRL and contained in the Exhibit 101 attachments).

 

25

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Table of Contents

 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

 

Date: July 31, 2024
/s/   Christopher M. Zimmer
Christopher M. Zimmer
President and Chief Executive Officer
(Principal Executive Officer)

 

Date: July 31, 2024
/s/   Steven V. DiTommaso
Steven V. DiTommaso
Vice President and Chief Financial Officer
(Principal Financial and Accounting Officer)

 

26

Exhibit 31.1

 

CERTIFICATION

 

I, Christopher M. Zimmer, certify that:

 

1.	I have reviewed this report on Form 10-Q of Universal Stainless & Alloy Products, Inc.;

 

2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

 

3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

 

4.

The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

 

a)

designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

 

b)

designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

 

c)

evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

 

d)

disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting.

 

5.	The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):

 

a)

all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

 

b)

any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

 

Date: July 31, 2024
/s/    Christopher M. Zimmer
Christopher M. Zimmer
President and Chief Executive Officer
(Principal Executive Officer)

 

 

Exhibit 31.2

 

CERTIFICATION

 

I, Steven V. DiTommaso, certify that:

 

1.	I have reviewed this report on Form 10-Q of Universal Stainless & Alloy Products, Inc.;

 

2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

 

3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

 

4.

The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

 

a)

designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

 

b)

designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

 

c)

evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

 

d)

disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

 

5.	The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):

 

a)

all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

 

b)

any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

 

Date: July 31, 2024
/s/    Steven V. DiTommaso
Steven V. DiTommaso
Vice President and Chief Financial Officer
(Principal Financial and Accounting Officer)

 

 

Exhibit 32.1

 

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350

AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

 

In connection with the Quarterly Report of Universal Stainless & Alloy Products, Inc. (the “Company”) on Form 10-Q for the period ended June 30, 2024 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), each of the undersigned, in the capacities and on the dates indicated below, hereby certify pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to his knowledge:

 

1.	The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

 

2.	The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

 

Date: July 31, 2024	/s/    Christopher M. Zimmer
	Christopher M. Zimmer
	President and Chief Executive Officer
	(Principal Executive Officer)
Date: July 31, 2024	/s/    Steven V. DiTommaso
	Steven V. DiTommaso
	Vice President and Chief Financial Officer
	(Principal Financial and Accounting Officer)

 

 

Document And Entity Information - shares	6 Months Ended
	Jun. 30, 2024	Jul. 22, 2024
Document Information [Line Items]
Entity Central Index Key	0000931584
Entity Registrant Name	UNIVERSAL STAINLESS & ALLOY PRODUCTS INC
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Document Fiscal Period Focus	Q2
Document Fiscal Year Focus	2024
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Jun. 30, 2024
Document Transition Report	false
Entity File Number	001-39467
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	25-1724540
Entity Address, Address Line One	600 Mayer Street
Entity Address, City or Town	Bridgeville
Entity Address, State or Province	PA
Entity Address, Postal Zip Code	15017
City Area Code	412
Local Phone Number	257-7600
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		9,237,953
Preferred Stock [Member]
Document Information [Line Items]
Title of 12(b) Security	Preferred Stock Purchase Rights
Security Exchange Name	NASDAQ
No Trading Symbol Flag	true
Common Stock [Member]
Document Information [Line Items]
Title of 12(b) Security	Common Stock, par value $0.001 per share
Trading Symbol	USAP
Security Exchange Name	NASDAQ

Condensed Consolidated Statements of Operations (Unaudited) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023
Net sales	$ 82,759	$ 69,015	$ 160,396	$ 134,880
Cost of products sold	61,746	59,167	124,716	117,308
Gross margin	21,013	9,848	35,680	17,572
Selling, general and administrative expenses	8,164	6,755	15,573	13,030
Operating income	12,849	3,093	20,107	4,542
Interest expense and other financing costs	1,902	2,045	3,951	4,077
Other expense (income), net	22	5	36	(37)
Income before income taxes	10,925	1,043	16,120	502
Income taxes	2,060	148	3,118	119
Net income	$ 8,865	$ 895	$ 13,002	$ 383
Net income per common share - Basic (in dollars per share)	$ 0.96	$ 0.1	$ 1.41	$ 0.04
Net income per common share - Diluted (in dollars per share)	$ 0.9	$ 0.1	$ 1.33	$ 0.04
Weighted average shares of common stock outstanding
Basic (in shares)	9,209,721	9,066,150	9,196,556	9,061,011
Diluted (in shares)	9,843,471	9,272,660	9,754,741	9,210,841

Condensed Consolidated Statements of Comprehensive Income (Unaudited) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023
Net income	$ 8,865	$ 895	$ 13,002	$ 383
Other comprehensive income (loss), net of tax
Unrealized gain (loss) on derivatives	16	(124)	47	(270)
Comprehensive income	$ 8,881	$ 771	$ 13,049	$ 113

Condensed Consolidated Balance Sheets (Current Period Unaudited) - USD ($) $ in Thousands	Jun. 30, 2024	Dec. 31, 2023
Current assets:
Cash	$ 1	$ 394
Accounts receivable (less expected credit losses of $34 in each period, respectively)	44,919	39,034
Inventory	149,093	144,700
Other current assets	13,316	11,693
Total current assets	207,329	195,821
Property, plant and equipment, net	158,882	159,636
Other long-term assets	1,825	1,233
Total assets	368,036	356,690
Current liabilities:
Accounts payable	36,916	34,855
Accrued employment costs	4,707	6,492
Current portion of long-term debt	3,810	3,733
Other current liabilities	2,096	829
Total current liabilities	47,529	45,909
Long-term debt, net	74,480	81,846
Deferred income taxes	2,675	2
Other long-term liabilities, net	2,867	2,891
Total liabilities	127,551	130,648
Commitments and contingencies (Note 9)
Stockholders’ equity:
Senior preferred stock, par value $0.001 per share; 1,980,000 shares authorized; zero shares issued and outstanding	0	0
Common stock, par value $0.001 per share; 20,000,000 shares authorized; 9,237,953 and 9,185,307 shares issued, respectively	9	9
Additional paid-in capital	100,031	98,637
Accumulated other comprehensive loss	(76)	(123)
Retained earnings	140,521	127,519
Total stockholders’ equity	240,485	226,042
Total liabilities and stockholders’ equity	$ 368,036	$ 356,690

Condensed Consolidated Balance Sheets (Current Period Unaudited) (Parentheticals) - USD ($) $ in Thousands	Jun. 30, 2024	Dec. 31, 2023
Allowance for credit losses	$ 34	$ 34
Preferred stock, par value (in dollars per share)	$ 0.001	$ 0.001
Preferred stock, authorized (in shares)	1,980,000	1,980,000
Preferred stock, issued (in shares)	0	0
Preferred stock, outstanding (in shares)	0	0
Common stock, par value (in dollars per share)	$ 0.001	$ 0.001
Common stock, authorized (in shares)	20,000,000	20,000,000
Common stock, issued (in shares)	9,237,953	9,185,307

Condensed Consolidated Statements of Cash Flow (Unaudited) - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2024	Jun. 30, 2023
Operating Activities:
Net income	$ 13,002	$ 383
Adjustments for non-cash items:
Depreciation and amortization	10,180	9,643
Deferred income tax	2,667	(19)
Share-based compensation expense	974	672
Changes in assets and liabilities:
Accounts receivable, net	(5,885)	(335)
Inventory, net	(5,291)	1,716
Accounts payable	3,692	(1,633)
Accrued employment costs	(1,785)	819
Other, net	(21)	(69)
Net cash provided by operating activities	17,533	11,177
Investing Activity:
Payments for property, plant and equipment	(10,926)	(6,932)
Net cash used in investing activity	(10,926)	(6,932)
Financing Activities:
Net repayment of borrowings under revolving credit facility	(5,576)	(4,542)
Proceeds from stock issued under share-based plans	420	75
Repayments of term loan facility and finance leases	(1,844)	(1,753)
Net cash used in financing activities	(7,000)	(6,220)
Net decrease in cash	(393)	(1,975)
Cash at beginning of period	394	2,019
Cash at end of period	$ 1	$ 44

Condensed Consolidated Statements of Shareholders' Equity (Unaudited) - USD ($) $ in Thousands	Common Stock [Member]	Additional Paid-in Capital [Member]	Retained Earnings [Member]	AOCI Attributable to Parent [Member]	Total
Balance (in shares) at Dec. 31, 2022	9,049,748
Balance at Dec. 31, 2022	$ 9	$ 97,002	$ 122,609	$ 133	$ 219,753
Share-based compensation	0	361	0	0	361
Unrealized gain (loss) on derivatives	0	0	0	(146)	(146)
Net income	$ 0	0	(512)	0	(512)
Share-based compensation (in shares)	10,920
Balance (in shares) at Mar. 31, 2023	9,060,668
Balance at Mar. 31, 2023	$ 9	97,363	122,097	(13)	219,456
Balance (in shares) at Dec. 31, 2022	9,049,748
Balance at Dec. 31, 2022	$ 9	97,002	122,609	133	219,753
Unrealized gain (loss) on derivatives					(270)
Net income					383
Balance (in shares) at Jun. 30, 2023	9,087,370
Balance at Jun. 30, 2023	$ 9	97,749	122,992	(137)	220,613
Balance (in shares) at Mar. 31, 2023	9,060,668
Balance at Mar. 31, 2023	$ 9	97,363	122,097	(13)	219,456
Exercise of stock options (in shares)	1,250
Exercise of stock options	$ 0	11	0	0	11
Share-based compensation	0	311	0	0	311
Unrealized gain (loss) on derivatives	0	0	0	(124)	(124)
Net income	$ 0	0	895	0	895
Employee Stock Purchase Plan (in shares)	10,280
Employee Stock Purchase Plan	$ 0	64	0	0	64
Share-based compensation (in shares)	15,172
Balance (in shares) at Jun. 30, 2023	9,087,370
Balance at Jun. 30, 2023	$ 9	97,749	122,992	(137)	220,613
Balance (in shares) at Dec. 31, 2023	9,185,307
Balance at Dec. 31, 2023	$ 9	98,637	127,519	(123)	226,042
Exercise of stock options (in shares)	4,500
Exercise of stock options	$ 0	66	0	0	66
Share-based compensation	0	454	0	0	454
Unrealized gain (loss) on derivatives	0	0	0	31	31
Net income	$ 0	0	4,137	0	4,137
Balance (in shares) at Mar. 31, 2024	9,189,807
Balance at Mar. 31, 2024	$ 9	99,157	131,656	(92)	230,730
Balance (in shares) at Dec. 31, 2023	9,185,307
Balance at Dec. 31, 2023	$ 9	98,637	127,519	(123)	226,042
Unrealized gain (loss) on derivatives					47
Net income					13,002
Balance (in shares) at Jun. 30, 2024	9,237,953
Balance at Jun. 30, 2024	$ 9	100,031	140,521	(76)	240,485
Balance (in shares) at Mar. 31, 2024	9,189,807
Balance at Mar. 31, 2024	$ 9	99,157	131,656	(92)	230,730
Exercise of stock options (in shares)	10,677
Exercise of stock options	$ 0	99	0	0	99
Share-based compensation	0	520	0	0	520
Unrealized gain (loss) on derivatives	0	0	0	16	16
Net income	$ 0	0	8,865	0	8,865
Employee Stock Purchase Plan (in shares)	15,572
Employee Stock Purchase Plan	$ 0	255	0	0	255
Share-based compensation (in shares)	21,897
Balance (in shares) at Jun. 30, 2024	9,237,953
Balance at Jun. 30, 2024	$ 9	$ 100,031	$ 140,521	$ (76)	$ 240,485

Note 1 - Nature of Business and Basis of Presentation	6 Months Ended
	Jun. 30, 2024
Notes to Financial Statements
Organization, Consolidation and Presentation of Financial Statements Disclosure [Text Block]	Note 1: Nature of Business and Basis of Presentation   Universal Stainless & Alloy Products, Inc., and its wholly-owned subsidiaries (collectively, “Universal,” “we,” “us,” “our,” or the “Company”), manufacture and market semi-finished and finished specialty steel products, including stainless steel, nickel alloys, tool steel and certain other alloyed steels. Our manufacturing process involves melting, remelting, heat treating, hot and cold rolling, forging, machining and cold drawing of semi-finished and finished specialty steels. Our products are sold to service centers, forgers, rerollers, original equipment manufacturers and wire redrawers. Our customers further process our products for use in a variety of industries, including the aerospace, power generation, oil and gas, heavy equipment, and general industrial manufacturing industries. We also perform conversion services on materials supplied by customers.   The accompanying unaudited condensed consolidated statements include the accounts of Universal Stainless & Alloy Products, Inc. and its subsidiaries and are prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”) for interim financial reports and the instructions for Form 10-Q and Rule 10-01 of Regulation S-X. Accordingly, certain information and footnote disclosures normally included in financial statements prepared under U.S. GAAP have been condensed or omitted pursuant to such regulations. Although the  December 31, 2023 condensed consolidated balance sheet data was derived from the audited consolidated financial statements, it does not include all disclosures required by U.S. GAAP. However, we believe that the disclosures are adequate to make the information presented not misleading. These condensed consolidated financial statements should be read in conjunction with our most recently audited consolidated financial statements and the notes thereto included in our Annual Report on Form 10-K as filed with the Securities and Exchange Commission. In the opinion of management, the accompanying condensed consolidated financial statements include all adjustments necessary to present a fair presentation of the condensed consolidated financial statements for the periods shown. Interim results are not necessarily indicative of the operating results for the full fiscal year or any future period. The preparation of these condensed consolidated financial statements in conformity with U.S. GAAP requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and disclosure of contingent assets and liabilities. Actual results may differ from our estimates. We also consolidate, regardless of our ownership percentage, variable interest entities (each a “VIE”) for which we are deemed to have a controlling financial interest. All intercompany transactions and balances have been eliminated.   When we obtain an economic interest in an entity, we evaluate the entity to determine if the entity is a VIE and if we are deemed to be a primary beneficiary. As a part of our evaluation, we are required to qualitatively assess if we are the primary beneficiary of the VIE based on whether we hold the power to direct those matters that most significantly impacted the activities of the VIE and the obligation to absorb losses or the right to receive the benefits of the VIE that could potentially be significant. Refer to Note 7, New Markets Tax Credit Financing Transaction, for a description of the VIEs included in our condensed consolidated financial statements.   Recently Adopted Accounting Pronouncements   None.   Recently Issued Accounting Pronouncements   The Company considers the applicability and impact of all Accounting Standards Updates ("ASUs"). Recently issued ASUs not listed were assessed and were determined not applicable, or are expected to have minimal impact on our condensed consolidated financial statements.

Note 2 - Net Income Per Common Share	6 Months Ended
	Jun. 30, 2024
Notes to Financial Statements
Earnings Per Share [Text Block]	Note 2: Net Income Per Common Share   The following table sets forth the computation of basic and diluted net income per common share:       Three months ended     Six months ended       June 30,     June 30,   (dollars in thousands, except per share amounts)   2024     2023     2024     2023                                     Numerator:                                 Net income   $ 8,865     $ 895     $ 13,002     $ 383                                     Denominator:                                 Weighted average number of shares of common stock outstanding     9,209,721       9,066,150       9,196,556       9,061,011   Weighted average effect of dilutive share-based compensation     633,750       206,510       558,185       149,830   Diluted weighted average number of shares of common stock outstanding     9,843,471       9,272,660       9,754,741       9,210,841                                     Net income per common share:                                 Net income per common share - Basic   $ 0.96     $ 0.10     $ 1.41     $ 0.04   Net income per common share - Diluted   $ 0.90     $ 0.10     $ 1.33     $ 0.04     The weighted average effect of dilutive share-based compensation was determined using the treasury stock method in all periods, and includes 349,670 shares for the effect of stock options outstanding and 284,080 shares for the effect of unvested restricted stock outstanding for the three month period ended June 30, 2024.  For the six month period ended  June 30, 2024, the calculation includes 292,918 shares for the effect of stock options outstanding and 265,267 shares for the effect of unvested restricted stock outstanding.   There were options to purchase 15,000 and 560,650 shares of common stock outstanding at a weighted average price of $31.27 and $19.74 for the three months ended  June 30, 2024 and 2023, respectively, which were excluded from the computation of diluted net income per common share. There were options to purchase 72,500 and 577,150 shares of common stock outstanding at a weighted average price of $27.15 and $19.49 for the six months ended June 30, 2024 and 2023, respectively, which were also excluded from the computation of diluted net income per common share. These options were excluded because their exercise prices were greater than the average market price of our common stock during each period.

Note 3 - Revenue Recognition	6 Months Ended
	Jun. 30, 2024
Notes to Financial Statements
Revenue from Contract with Customer [Text Block]	Note 3: Revenue Recognition   The Company’s revenues primarily include sales of products. Revenue is recognized when the Company satisfies its performance obligation under the contract by transferring the promised product to its customer that obtains control of the product. A performance obligation is a promise in a contract to transfer a distinct product to a customer. Most of the Company’s contracts have a single performance obligation, as the promise to transfer products or services is not separately identifiable from other promises in the contract and, therefore, not distinct.   Revenue is measured as the amount of consideration the Company expects to receive in exchange for transferring products. As such, revenue is recorded net of returns, allowances, customer discounts, and incentives. Sales and other taxes are excluded from revenues. Invoiced shipping and handling costs are included in revenue.   The Company’s revenue is primarily from products transferred to customers at a point in time. The Company recognizes revenue at the point in time in which the customer obtains control of the product, which is generally when product title passes to the customer upon shipment.   We have determined that there are certain customer agreements involving production of specified product grades and shapes that require over-time revenue recognition, in advance of shipment, as there is no alternative use for the product without significant economic loss, and the Company maintains an enforceable right to payment including a normal profit margin from the customer in the event of contract termination. The revenue is measured based on inputs expended in proportion to the total inputs the entity expects to expend to completely satisfy the performance obligation. The Company had revenue subject to over-time recognition of $4.2 million and $4.0 million during the six months ended  June 30, 2024 and 2023, respectively, and $1.8 million and $2.2 million during the three months ended June 30, 2024 and 2023, respectively.    The timing of revenue recognition, customer billings, and cash collections resulted in contract assets related to services performed and not yet billed of $2.4 million and $2.0 million at June 30, 2024 and December 31, 2023, respectively. The Company recorded these contract assets within Accounts Receivable in the Condensed Consolidated Balance Sheets at each date.   We expect to satisfy all performance obligations related to revenue recognized in advance of shipment at June 30, 2024 within the next 12 months.    The Company has elected the following practical expedients allowed under Accounting Standard Codification (“ASC”) 606, Revenue from Contracts with Customers ("ASC 606"):     ● Shipping of products is not considered a separate performance obligation.     ● Performance obligations are satisfied within one year from a given reporting date; consequently, we omit disclosure of the transaction price apportioned to remaining performance obligations on open orders.   The following summarizes our revenue by melt type:       Three months ended June 30,     Six months ended June 30,   (in thousands)   2024     2023     2024     2023   Net sales:                                 Specialty alloys   $ 61,583     $ 54,947     $ 117,838     $ 102,496   Premium alloys (A)     20,715       12,866       40,808       30,522   Conversion services and other sales     461       1,202       1,750       1,862                                     Total net sales   $ 82,759     $ 69,015     $ 160,396     $ 134,880       (A) Premium alloys represent all vacuum induction melted (VIM) products.

Note 4 - Inventory	6 Months Ended
	Jun. 30, 2024
Notes to Financial Statements
Inventory Disclosure [Text Block]	Note 4: Inventory   Our raw material and starting stock inventory is primarily comprised of ferrous and non-ferrous scrap metal and alloys such as nickel, chromium, molybdenum, cobalt, vanadium and copper. Our semi-finished and finished steel products are work-in-process in various stages of production or are finished products waiting to be shipped to our customers.   Operating materials are primarily comprised of forge dies and production molds and rolls that are consumed over their useful lives. During the six months ended June 30, 2024 and 2023, we amortized these operating materials in the amount of $0.9 million and $0.9 million, respectively, and during the three months ended June 30, 2024 and 2023, $0.4 million and $0.5 million, respectively.  This expense is recorded as a component of cost of products sold in the condensed consolidated statements of operations and included as a part of our total depreciation and amortization on the condensed consolidated statement of cash flows.   Inventory is stated at the lower of cost or net realizable value with cost principally determined on a weighted average cost method. Such costs include the acquisition cost for raw materials and supplies, direct labor and applied manufacturing overhead. We assess market based upon actual and estimated transactions at or around the balance sheet date. Typically, we reserve for slow-moving inventory and inventory that is being evaluated under our quality control process. The reserves are based upon management’s expected method of disposition.   Inventory consisted of the following:       June 30,     December 31,   (in thousands)   2024     2023                     Raw materials and starting stock   $ 18,845     $ 15,124   Semi-finished and finished steel products     114,963       117,039   Operating materials     18,747       15,967                     Gross inventory     152,555       148,130   Inventory reserves     (3,462 )     (3,430 )                   Total inventory   $ 149,093     $ 144,700

Note 5 - Leases	6 Months Ended
	Jun. 30, 2024
Notes to Financial Statements
Operating And Finance Leases Disclosure [Text Block]	Note 5: Leases   The Company periodically enters into leases in its normal course of business. At June 30, 2024 and December 31, 2023, the leases in effect were primarily related to mobile equipment and other production equipment. The term of our leases is generally 72 months or less, and the leases do not have significant restrictions, covenants, or other nonstandard terms.   Right-of-use assets and lease liabilities are recorded at the present value of minimum lease payments. For our operating leases, the assets are included in Other long-term assets on the condensed consolidated balance sheets and are amortized within operating income over the respective lease terms. The long-term component of the lease liability is included in Other long-term liabilities, net, and the current component is included in Other current liabilities. For our finance leases, the assets are included in Property, plant and equipment, net on the condensed consolidated balance sheets and are depreciated over the respective lease terms which range from three to six years. The long-term component of the lease liability is included in Long-term debt and the current component is included in Current portion of long-term debt.   The Company did not enter into any new lease agreements in the first six months of 2024.  The Company entered into one new finance lease agreement in the first quarter of 2023.   As of  June 30, 2024, future minimum lease payments applicable to operating and finance leases were as follows:   (in thousands)   Operating Leases     Finance Leases   Remainder of 2024   $ 73     $ 977   2025     36       1,841   2026     21       1,714   2027     2       1,570   2028     -       1,114   Total minimum lease payments     132       7,216   Less amounts representing interest     (3 )     (1,368 ) Present value of minimum lease payments     129       5,848   Less current obligations     (96 )     (1,403 ) Total long-term lease obligations, net   $ 33     $ 4,445   Weighted-average remaining lease term (in years)     1.4       3.7     Right-of-use assets recorded to the condensed consolidated balance sheet at June 30, 2024, net of accumulated amortization, were $0.1 million for operating leases and $5.8 million for finance leases. For the six months ended June 30, 2024, the amortization of finance lease assets was $0.4 million and was included in cost of products sold in the condensed consolidated statements of operations.  For the three months ended June 30, 2024, the amortization of finance lease assets was $0.2 million and was included in cost of products sold in the condensed consolidated statements of operations.  Right-of-use assets recorded to the condensed consolidated balance sheet at December 31, 2023, net of accumulated amortization, were $0.2 million for operating leases and $6.5 million for finance leases.   The unamortized portion of the $5.2 million lease component of our VAR expansion financing arrangement is included in the right-of-use asset total, while the sale and leaseback component of that agreement is excluded. The sale and leaseback component is accounted for as a loan secured by the related equipment, as it did not meet the criteria for sale accounting under ASC 842, Leases ("ASC 842"). This financing agreement was executed in December 2022 and had a $7.0 million total original principal amount, original term of 72 months, and implicit interest rate of approximately 11.2%. The weighted average interest rate on all our financing leases is approximately 10.0%.   The Company applies the practical expedient allowed under ASC 842 to exclude leases with a term of 12 months or less from the calculation of our lease liabilities and right-of-use assets.   In determining the lease liability and corresponding right-of-use asset for each lease, the Company calculated the present value of future lease payments using the interest rate implicit in the lease, when available, or the Company’s incremental borrowing rate. The incremental borrowing rate was determined with reference to the interest rate applicable under revolving credit facility discussed in Note 6, Long-Term Debt, as this facility is collateralized by a first lien on substantially all of the assets of the Company and its term is similar to the term of our leases.

Note 6 - Long-term Debt	6 Months Ended
	Jun. 30, 2024
Notes to Financial Statements
Debt Disclosure [Text Block]	Note 6: Long-Term Debt   Long-term debt consisted of the following:       June 30,     December 31,   (in thousands)   2024     2023                     Revolving credit facility   $ 63,408     $ 68,984   Term loan     8,572       9,643   Sale and leaseback financing liability     1,426       1,539   Finance leases     5,848       6,508                     Total debt     79,254       86,674   Less: current portion of long-term debt     (3,810 )     (3,733 ) Less: deferred financing costs     (964 )     (1,095 )                   Long-term debt, net   $ 74,480     $ 81,846     Credit Facility   On March 17, 2021, we entered into the Second Amended and Restated Revolving Credit, Term Loan and Security Agreement (the “Credit Agreement”), with PNC Bank, National Association, as administrative agent and co-collateral agent (the “Agent”), Bank of America, N.A., as co-collateral agent (“Bank of America”), the Lenders (as defined in the Credit Agreement) party thereto from time to time and PNC Capital Markets LLC, as sole lead arranger and sole bookrunner. The Credit Agreement provides for a senior secured revolving credit facility in an aggregate principal amount not to exceed $105.0 million (“Revolving Credit Facility”) and a senior secured term loan facility (“Term Loan”) in the amount of $15.0 million (together with the Revolving Credit Facility, the “Facilities”).  At June 30, 2024, we maintained approximately, $41.6 million of remaining availability under the Revolving Credit Facility.   At June 30, 2024, we had total Credit Agreement related net deferred financing costs of approximately $0.4 million. For the six months ended June 30, 2024 and 2023, we amortized approximately $0.1 million of deferred financing costs, and for the three months ended June 30, 2024 and 2023, we amortized approximately $0.1 million and $0.1 million, respectively.   The Credit Agreement requires the Company to maintain compliance with all the applicable financial covenants throughout the term of the Credit Agreement. As of June 30, 2024, we are in compliance with all applicable financial covenants.   The Facilities, which expire on March 17, 2026 (the ‘Expiration Date”), are collateralized by a first lien on substantially all of the assets of the Company and its subsidiaries, except that no real property is collateral under the Facilities other than Company’s real property in North Jackson, Ohio.   Availability under the Credit Agreement is based on eligible accounts receivable and inventory. The Company must maintain undrawn availability under the Credit Agreement of at least $11.0 million until it maintains a fixed charge coverage ratio ("FCCR") of not less than 1.1 to 1.0 measured on a rolling two-quarter basis, calculated in accordance with the terms of the Credit Agreement. The Company achieved its second consecutive quarter of its FCCR greater than 1.1 for the period December 31, 2023 and has since maintained the ratio above the required level.   The Company is required to pay a commitment fee of 0.25% based on the daily unused portion of the Revolving Credit Facility.   With respect to the Term Loan, the Company pays quarterly installments of the principal of approximately $0.5 million, plus accrued and unpaid interest, on the first day of each fiscal quarter beginning after June 30, 2021. To the extent not previously paid, the Term Loan will become due and payable in full on the Expiration Date.   Amounts outstanding under the Facilities, at the Company’s option, bear interest at the current SOFR rate plus a spread, calculated in accordance with the terms of the Credit Agreement. Interest under the Credit Agreement is payable monthly. We elected to use the SOFR based rate for the majority of the debt outstanding under the Facilities for the six months ended June 30, 2024, which approximated 7.9% for commitments under our Revolving Credit Facility and 8.4% for the Term Loan.

Note 7 - New Markets Tax Credit Financing Transaction	6 Months Ended
	Jun. 30, 2024
Notes to Financial Statements
New Market Tax Credit Financing Transaction [Text Block]	Note 7: New Markets Tax Credit Financing Transaction   On March 9, 2018, the Company entered into a qualified New Markets Tax Credit (“NMTC”) financing program with PNC New Markets Investment Partners, LLC and Boston Community Capital, Inc. related to a new mid-size bar cell capital project at the Company’s Dunkirk, NY facility. PNC New Markets Investment Partners, LLC made a capital contribution and the Company made a loan to Dunkirk Investment Fund, LLC (“Investment Fund”) under the qualified NMTC program. Through this financing transaction, the Company secured low interest financing and the potential for other future benefits related to its mid-size bar cell capital project.   In connection with the NMTC financing program, the Company loaned $6.7 million aggregate principal amount (“Leverage Loan”) due in March 2048, to the Investment Fund. Additionally, PNC New Markets Investment Partners, LLC contributed $3.5 million to the Investment Fund, and as such, PNC New Markets Investment Partners, LLC is entitled to substantially all tax and other benefits derived from the NMTC. The Investment Fund then contributed the proceeds to a community development entity (“CDE”). The CDE then loaned the funds, on similar terms, as the Leverage Loan to Dunkirk Specialty Steel, LLC, a wholly-owned subsidiary of the Company. The CDE loan proceeds are restricted for use on the mid-size bar cell capital project.   The NMTC is subject to 100 percent recapture for a period of seven years as provided in the Internal Revenue Code. The Company is required to comply with various regulations and contractual provisions that apply to the NMTC arrangement. Non-compliance with applicable requirements could result in projected tax benefits not being realized and, therefore, require the Company to indemnify PNC New Markets Investment Partners, LLC for any loss or recapture of NMTCs related to the financing until the Company’s obligation to deliver tax benefits is relieved. The Company does not anticipate any credit recaptures will be required in connection with this arrangement.   As of June 30, 2024 and December 31, 2023, the Company recorded $2.8 million within Other long-term liabilities related to this transaction, which represents the funds contributed to the Investment Fund by PNC New Markets Investment Partners, LLC.   This transaction also includes a put/call provision whereby the Company may be obligated or entitled to repurchase PNC New Markets Investment Partners, LLC’s interest in the Investment Fund. The Company believes that PNC New Markets Investment Partners, LLC will exercise the put option in the second half of 2024, resulting in a gain of $2.8 million at that time. The value attributed to the put/call is negligible.   Direct costs incurred in structuring this financing transaction totaled $0.7 million. These costs were deferred and amortized over the term of the loans.   The Company has determined that the Investment Fund and CDE are each a VIE, and that it is the primary beneficiary of each VIE. This conclusion was reached based on the following:     ● The ongoing activities of the VIE, collecting and remitting interest and fees, and NMTC compliance were all considered in the initial design and are not expected to significantly affect economic performance throughout the life of the VIE;     ● Contractual arrangements obligate the Company to comply with NMTC rules and regulations and provide various other guarantees to the Investment Fund and CDE;     ● PNC New Markets Investment Partners, LLC lacks a material interest in the underlying economics of the project; and     ● The Company is obligated to absorb losses of the VIE.   Because the Company is the primary beneficiary of each VIE, these entities have been included in the Company’s condensed consolidated financial statements.

Note 8 - Fair Value Measurement	6 Months Ended
	Jun. 30, 2024
Notes to Financial Statements
Fair Value Measurement and Measurement Inputs, Recurring and Nonrecurring [Text Block]	Note 8: Fair Value Measurement   The fair value hierarchy has three levels based on the inputs used to determine fair value, which are as follows:   Level 1 — Unadjusted quoted prices available in active markets for the identical assets or liabilities at the measurement date.   Level 2 — Unadjusted quoted prices in active markets for similar assets or liabilities, or unadjusted quoted prices for identical or similar assets or liabilities in markets that are not active, or inputs other than quoted prices that are observable for the asset or liability.   Level 3 — Unobservable inputs that cannot be corroborated by observable market data and reflect the use of significant management judgment. These values are generally determined using pricing models for which the assumptions utilize management’s estimates of market participant assumptions.   The fair value hierarchy requires the use of observable market data when available. In instances where the inputs used to measure fair value fall into different levels of the fair value hierarchy, the fair value measurement has been determined based on the lowest level input significant to the fair value measurement in its entirety. Our assessment of the significance of a particular item to the fair value measurement in its entirety requires judgment, including the consideration of inputs specific to the asset or liability.   The fair value of the Term Loan and Revolving Credit Facility at  June 30, 2024 and December 31, 2023 approximated the carrying amount as the interest rate is based upon observable market interest rates (Level 2). The fair values of foreign currency forward contracts and our interest rate swap discussed in Note 11, Derivatives and Hedging, at June 30, 2024 and December 31, 2023 were determined using observable market swap rates (Level 2).

Note 9 - Commitments and Contingencies	6 Months Ended
	Jun. 30, 2024
Notes to Financial Statements
Commitments and Contingencies Disclosure [Text Block]	Note 9: Commitments and Contingencies   From time to time, various lawsuits and claims have been or may be asserted against us relating to the conduct of our business, including routine litigation relating to commercial and employment matters. The ultimate cost and outcome of any litigation or claim cannot be predicted with certainty. Management believes, based on information presently available, that the likelihood that the ultimate outcome of any such pending matter will have a material adverse effect on our financial condition, or liquidity or a material impact on our results of operations is remote, although the resolution of one or more of these matters may have a material adverse effect on our results of operations for the period in which the resolution occurs.

Note 10 - Income Taxes	6 Months Ended
	Jun. 30, 2024
Notes to Financial Statements
Income Tax Disclosure [Text Block]	Note 10: Income Taxes   Management estimates the annual effective income tax rate quarterly based on forecasted full year results. Items unrelated to current year ordinary income are recognized entirely in the period identified as a discrete item of tax. The quarterly income tax provision includes tax on ordinary income provided at the most recent estimated annual effective tax rate (“ETR”), increased or decreased for the tax effect of discrete items.   For the six months ended June 30, 2024 and 2023, our estimated annual effective tax rates applied to ordinary income were 20.0% and 10.4%, respectively. In all periods, the projected annual ETR differs from the federal statutory rate of 21.0% primarily due to the impact of research and development credits. State taxes are not a significant component of the rate.    Discrete items during the six months ended June 30, 2024 and 2023 were related to share-based compensation items and totaled approximately $0.1 million of a benefit and $0.1 million of expense, respectively. The ETR for each period was 19.3% and 23.7%, respectively.  Discrete items during the three months ended June 30, 2024 and 2023 were not significant and the ETR for each period was 18.9% and 14.2% respectively.

Note 11 - Derivatives and Hedging	6 Months Ended
	Jun. 30, 2024
Notes to Financial Statements
Derivative Instruments and Hedging Activities Disclosure [Text Block]	Note 11: Derivatives and Hedging   The Company invoices certain customers in foreign currencies. In order to mitigate the risks associated with fluctuations in exchange rates with the U.S. Dollar, the Company entered into foreign exchange forward contracts to mitigate the foreign currency risk related to a portion of these sales, and has designated these contracts as cash flow hedges.   The notional value of contracts was $4.0 million and $4.8 million at June 30, 2024 and December 31, 2023, respectively.   The Company recorded an unrealized loss in accumulated other comprehensive income (loss) of approximately $0.1 million at both  June 30, 2024 and December 31, 2023 related to the contracts.   The Company entered into a forward interest rate swap contract during 2020 to fix the interest rate on a portion of its variable-rate debt from January 1, 2021 to June 30, 2023. The interest rate swap was designated as a cash flow hedge. The notional amount of the contract was $5 million during the first half of 2023 until it matured on June 30, 2023.

Note 12 - Related Parties	6 Months Ended
	Jun. 30, 2024
Notes to Financial Statements
Related Party Transactions Disclosure [Text Block]	Note 12: Related Parties   None.

Insider Trading Arrangements	3 Months Ended	6 Months Ended
	Jun. 30, 2024	Jun. 30, 2024
Insider Trading Arr Line Items
Material Terms of Trading Arrangement [Text Block]		Item 5.         OTHER INFORMATION   Not Applicable.
Rule 10b5-1 Arrangement Terminated [Flag]	false
Rule 10b5-1 Arrangement Adopted [Flag]	false
Non-Rule 10b5-1 Arrangement Terminated [Flag]	false
Non-Rule 10b5-1 Arrangement Adopted [Flag]	false

Significant Accounting Policies (Policies)	6 Months Ended
	Jun. 30, 2024
Accounting Policies [Abstract]
New Accounting Pronouncements, Policy [Policy Text Block]	Recently Adopted Accounting Pronouncements   None.   Recently Issued Accounting Pronouncements   The Company considers the applicability and impact of all Accounting Standards Updates ("ASUs"). Recently issued ASUs not listed were assessed and were determined not applicable, or are expected to have minimal impact on our condensed consolidated financial statements.

Note 2 - Net Income Per Common Share (Tables)	6 Months Ended
	Jun. 30, 2024
Notes Tables
Schedule of Earnings Per Share, Basic and Diluted [Table Text Block]	Three months ended     Six months ended       June 30,     June 30,   (dollars in thousands, except per share amounts)   2024     2023     2024     2023                                     Numerator:                                 Net income   $ 8,865     $ 895     $ 13,002     $ 383                                     Denominator:                                 Weighted average number of shares of common stock outstanding     9,209,721       9,066,150       9,196,556       9,061,011   Weighted average effect of dilutive share-based compensation     633,750       206,510       558,185       149,830   Diluted weighted average number of shares of common stock outstanding     9,843,471       9,272,660       9,754,741       9,210,841                                     Net income per common share:                                 Net income per common share - Basic   $ 0.96     $ 0.10     $ 1.41     $ 0.04   Net income per common share - Diluted   $ 0.90     $ 0.10     $ 1.33     $ 0.04

Note 3 - Revenue Recognition (Tables)	6 Months Ended
	Jun. 30, 2024
Notes Tables
Disaggregation of Revenue [Table Text Block]	Three months ended June 30,     Six months ended June 30,   (in thousands)   2024     2023     2024     2023   Net sales:                                 Specialty alloys   $ 61,583     $ 54,947     $ 117,838     $ 102,496   Premium alloys (A)     20,715       12,866       40,808       30,522   Conversion services and other sales     461       1,202       1,750       1,862                                     Total net sales   $ 82,759     $ 69,015     $ 160,396     $ 134,880

Note 4 - Inventory (Tables)	6 Months Ended
	Jun. 30, 2024
Notes Tables
Schedule of Inventory, Current [Table Text Block]	June 30,     December 31,   (in thousands)   2024     2023                     Raw materials and starting stock   $ 18,845     $ 15,124   Semi-finished and finished steel products     114,963       117,039   Operating materials     18,747       15,967                     Gross inventory     152,555       148,130   Inventory reserves     (3,462 )     (3,430 )                   Total inventory   $ 149,093     $ 144,700

Note 5 - Leases (Tables)	6 Months Ended
	Jun. 30, 2024
Notes Tables
Lease, Cost [Table Text Block]	(in thousands)   Operating Leases     Finance Leases   Remainder of 2024   $ 73     $ 977   2025     36       1,841   2026     21       1,714   2027     2       1,570   2028     -       1,114   Total minimum lease payments     132       7,216   Less amounts representing interest     (3 )     (1,368 ) Present value of minimum lease payments     129       5,848   Less current obligations     (96 )     (1,403 ) Total long-term lease obligations, net   $ 33     $ 4,445   Weighted-average remaining lease term (in years)     1.4       3.7

Note 6 - Long-term Debt (Tables)	6 Months Ended
	Jun. 30, 2024
Notes Tables
Schedule of Debt [Table Text Block]	June 30,     December 31,   (in thousands)   2024     2023                     Revolving credit facility   $ 63,408     $ 68,984   Term loan     8,572       9,643   Sale and leaseback financing liability     1,426       1,539   Finance leases     5,848       6,508                     Total debt     79,254       86,674   Less: current portion of long-term debt     (3,810 )     (3,733 ) Less: deferred financing costs     (964 )     (1,095 )                   Long-term debt, net   $ 74,480     $ 81,846

Note 2 - Net Income Per Common Share (Details Textual) - $ / shares	3 Months Ended		6 Months Ended
	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023
Incremental Common Shares Attributable to Dilutive Effect of Share-Based Payment Arrangements (in shares)	633,750	206,510	558,185	149,830
Share-Based Payment Arrangement, Option [Member]
Incremental Common Shares Attributable to Dilutive Effect of Share-Based Payment Arrangements (in shares)	349,670		292,918
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount (in shares)	15,000	560,650	72,500	577,150
Antidilutive Securities Excluded from Computation of Earnings Per Share, Weighted Average Price (in dollars per share)	$ 31.27	$ 19.74	$ 27.15	$ 19.49
Restricted Stock [Member]
Incremental Common Shares Attributable to Dilutive Effect of Share-Based Payment Arrangements (in shares)	284,080		265,267

Note 2 - Net Income (Loss) Per Common Share - Schedule of Earnings Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended				6 Months Ended
	Jun. 30, 2024	Mar. 31, 2024	Jun. 30, 2023	Mar. 31, 2023	Jun. 30, 2024	Jun. 30, 2023
Net income	$ 8,865	$ 4,137	$ 895	$ (512)	$ 13,002	$ 383
Basic (in shares)	9,209,721		9,066,150		9,196,556	9,061,011
Weighted average effect of dilutive share-based compensation (in shares)	633,750		206,510		558,185	149,830
Diluted weighted average number of shares of common stock outstanding (in shares)	9,843,471		9,272,660		9,754,741	9,210,841
Net income per common share:
Net income per common share - Basic (in dollars per share)	$ 0.96		$ 0.1		$ 1.41	$ 0.04
Net income per common share - Diluted (in dollars per share)	$ 0.9		$ 0.1		$ 1.33	$ 0.04

Note 3 - Revenue Recognition (Details Textual) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023	Dec. 31, 2023
Accounts Receivable [Member]
Contract with Customer, Asset, after Allowance for Credit Loss	$ 2.4		$ 2.4		$ 2.0
Transferred over Time [Member]
Revenue from Contract with Customer, Including Assessed Tax	$ 1.8	$ 2.2	$ 4.2	$ 4.0

Note 3 - Revenue Recognition - Disaggregation of Revenue (Details) - USD ($) $ in Thousands		3 Months Ended		6 Months Ended
		Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023
Net sales		$ 82,759	$ 69,015	$ 160,396	$ 134,880
Specialty Alloys [Member]
Net sales		61,583	54,947	117,838	102,496
Premium Alloys [Member]
Net sales	[1]	20,715	12,866	40,808	30,522
Conversion Services and Other Sales [Member]
Net sales		$ 461	$ 1,202	$ 1,750	$ 1,862
[1] Premium alloys represent all vacuum induction melted (VIM) products.

Note 4 - Inventory (Details Textual) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023
Inventory Amortization Expense	$ 0.4	$ 0.5	$ 0.9	$ 0.9

Note 4 - Inventory - Schedule of Inventory (Details) - USD ($) $ in Thousands	Jun. 30, 2024	Dec. 31, 2023
Raw materials and starting stock	$ 18,845	$ 15,124
Semi-finished and finished steel products	114,963	117,039
Operating materials	18,747	15,967
Gross inventory	152,555	148,130
Inventory reserves	(3,462)	(3,430)
Total inventory	$ 149,093	$ 144,700

Note 5 - Leases (Details Textual) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2024 USD ($)	Mar. 31, 2023	Jun. 30, 2024 USD ($)	Dec. 31, 2023 USD ($)	Dec. 31, 2022 USD ($)
Lessee, Finance Lease, Term of Contract (Year)					72 months
Number of New Operating Leases			0
Number of New Finance Leases		1
Operating Lease, Right-of-Use Asset	$ 100		$ 100	$ 200
Finance Lease, Right-of-Use Asset, after Accumulated Amortization	5,800		5,800	$ 6,500
Finance Lease, Right-of-Use Asset, Amortization	200		400
Finance Lease, Liability, Undiscounted Excess Amount	$ 1,368		$ 1,368
Finance Lease, Original Amount					$ 7,000
Finance Lease, Implicit Interest Rate					11.20%
Finance Lease, Weighted Average Discount Rate, Percent	10.00%		10.00%
Lease Component of VAR Expansion [Member]
Finance Lease, Liability, Undiscounted Excess Amount					$ 5,200
Maximum [Member]
Lease Term (Month)			72 months
Lessee, Finance Lease, Term of Contract (Year)	6 years		6 years
Minimum [Member]
Lessee, Finance Lease, Term of Contract (Year)	3 years		3 years

Note 5 - Leases - Future Minimum Lease Payments (Details) - USD ($) $ in Thousands	Jun. 30, 2024	Dec. 31, 2023
Remainder of 2024, operating leases	$ 73
Remainder of 2024, finance leases	977
2025, operating leases	36
2025, finance leases	1,841
2026, operating leases	21
2026, finance leases	1,714
2027, operating leases	2
2027, finance leases	1,570
2028, operating leases	0
2028, finance leases	1,114
Total minimum lease payments, operating leases	132
Total minimum lease payments, finance leases	7,216
Less amounts representing interest, operating leases	(3)
Less amounts representing interest, finance leases	(1,368)
Present value of minimum lease payments, operating leases	129
Present value of minimum lease payments, finance leases	5,848	$ 6,508
Less current obligations, operating leases	(96)
Less current obligations, finance leases	(1,403)
Total long-term lease obligations, net, operating leases	33
Total long-term lease obligations, net, finance leases	$ 4,445
Weighted-average remaining lease term (in years), operating leases (Year)	1 year 4 months 24 days
Weighted-average remaining lease term (in years), finance leases (Year)	3 years 8 months 12 days

Note 6 - Long-term Debt (Details Textual) $ in Thousands		3 Months Ended		6 Months Ended
	Mar. 17, 2021 USD ($)	Jun. 30, 2024 USD ($)	Jun. 30, 2023 USD ($)	Jun. 30, 2024 USD ($)	Dec. 31, 2023 USD ($)
Debt Issuance Costs, Net		$ 964		$ 964	$ 1,095
PNC Capital Markets LLC [Member]
Debt Issuance Costs, Net		400		400
Amortization of Debt Issuance Costs		$ 100	$ 100	$ 100
PNC Capital Markets LLC [Member] | Term Loan [Member]
Debt Instrument, Face Amount	$ 15,000
Debt Instrument, Periodic Payment	500
Debt Instrument, Interest Rate, Effective Percentage		8.40%		8.40%
Revolving Credit Facility [Member] | PNC Capital Markets LLC [Member]
Line of Credit Facility, Maximum Borrowing Capacity	105,000
Line of Credit Facility, Remaining Borrowing Capacity		$ 41,600		$ 41,600
Line of Credit Facility, Necessary Undrawn Availability	$ 11,000
Line of Credit Facility, Fixed Charge Coverage Ratio	1.1
Line of Credit Facility, Unused Capacity, Commitment Fee Percentage	0.25%
Debt Instrument, Interest Rate, Effective Percentage		7.90%		7.90%

Note 6 - Long-term Debt - Schedule of Long-term Debt (Details) - USD ($) $ in Thousands	Jun. 30, 2024	Dec. 31, 2023
Sale and leaseback financing liability	$ 1,426	$ 1,539
Present value of minimum lease payments, finance leases	5,848	6,508
Total debt	79,254	86,674
Less: current portion of long-term debt	(3,810)	(3,733)
Less: deferred financing costs	(964)	(1,095)
Long-term debt, net	74,480	81,846
Term Loan [Member]
Debt, carrying amount	8,572	9,643
Revolving Credit Facility [Member]
Debt, carrying amount	$ 63,408	$ 68,984

Note 7 - New Markets Tax Credit Financing Transaction (Details Textual) - USD ($) $ in Thousands		6 Months Ended
	Mar. 09, 2018	Dec. 31, 2024	Jun. 30, 2024	Dec. 31, 2023
Other Liabilities, Noncurrent			$ 2,867	$ 2,891
Debt Issuance Costs, Net			964	1,095
New Markets Tax Credit Financing Program [Member]
Financing Receivable, after Allowance for Credit Loss	$ 6,700
Recapture Percentage	100.00%
Recapture Period (Year)	7 years
Other Liabilities, Noncurrent			$ 2,800	$ 2,800
Debt Issuance Costs, Net	$ 700
New Markets Tax Credit Financing Program [Member] | Forecast [Member]
Gain (Loss) on Sale of Derivatives		$ 2,800
New Markets Tax Credit Financing Program [Member] | PNC Capital Markets LLC [Member]
Financing Receivable, after Allowance for Credit Loss	$ 3,500

Note 10 - Income Taxes (Details Textual) - USD ($) $ in Millions	3 Months Ended				6 Months Ended
	Jun. 30, 2024	Mar. 31, 2024	Jun. 30, 2023	Mar. 31, 2023	Jun. 30, 2024	Jun. 30, 2023
Effective Income Tax Rate Reconciliation, Percent					20.00%	10.40%
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent					21.00%
Effective Income Tax Rate Reconciliation, Nondeductible Expense, Share-Based Payment Arrangement, Amount		$ 0.1		$ 0.1
Effective Income Tax Rate Reconciliation, Percent, Discrete Items	18.90%		14.20%		19.30%	23.70%

Note 11 - Derivatives and Hedging (Details Textual) - USD ($) $ in Millions	6 Months Ended	12 Months Ended
	Jun. 30, 2024	Dec. 31, 2023	Mar. 31, 2023
Foreign Exchange Forward [Member] | Designated as Hedging Instrument [Member]
Derivative, Notional Amount	$ 4.0	$ 4.8
Other Comprehensive Income (Loss), Derivative, Excluded Component, Increase (Decrease), after Adjustments and Tax	$ 0.1	$ 0.1
Interest Rate Swap [Member] | Cash Flow Hedging [Member]
Derivative, Notional Amount			$ 5.0

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