Company Quick10K Filing
Universal Stainless & Alloy Products
Price15.76 EPS1
Shares9 P/E30
MCap140 P/FCF-15
Net Debt66 EBIT7
TEV206 TEV/EBIT28
TTM 2019-09-30, in MM, except price, ratios
10-Q 2021-03-31 Filed 2021-04-21
10-K 2020-12-31 Filed 2021-02-17
10-Q 2020-09-30 Filed 2020-10-21
10-Q 2020-06-30 Filed 2020-07-29
10-Q 2020-03-31 Filed 2020-04-22
10-K 2019-12-31 Filed 2020-02-19
10-Q 2019-09-30 Filed 2019-10-23
10-Q 2019-06-30 Filed 2019-07-24
10-Q 2019-03-31 Filed 2019-04-24
10-K 2018-12-31 Filed 2019-02-20
10-Q 2018-09-30 Filed 2018-10-24
10-Q 2018-06-30 Filed 2018-07-25
10-Q 2018-03-31 Filed 2018-04-25
10-K 2017-12-31 Filed 2018-02-23
10-Q 2017-09-30 Filed 2017-10-25
10-Q 2017-06-30 Filed 2017-07-26
10-Q 2017-03-31 Filed 2017-04-26
10-K 2016-12-31 Filed 2017-02-22
10-Q 2016-09-30 Filed 2016-10-28
10-Q 2016-06-30 Filed 2016-07-29
10-Q 2016-03-31 Filed 2016-04-28
10-K 2015-12-31 Filed 2016-02-24
10-Q 2015-09-30 Filed 2015-10-30
10-Q 2015-06-30 Filed 2015-08-07
10-Q 2015-03-31 Filed 2015-04-29
10-K 2014-12-31 Filed 2015-02-24
10-Q 2014-09-30 Filed 2014-10-29
10-Q 2014-06-30 Filed 2014-07-31
10-Q 2014-03-31 Filed 2014-05-01
10-K 2013-12-31 Filed 2014-03-05
10-Q 2013-09-30 Filed 2013-11-12
10-Q 2013-06-30 Filed 2013-08-02
10-Q 2013-03-31 Filed 2013-05-10
10-K 2012-12-31 Filed 2013-03-18
10-Q 2012-09-30 Filed 2012-11-09
10-Q 2012-06-30 Filed 2012-08-08
10-Q 2012-03-31 Filed 2012-05-10
10-K 2011-12-31 Filed 2012-03-06
10-Q 2011-09-30 Filed 2011-11-08
10-Q 2011-06-30 Filed 2011-08-08
10-Q 2011-03-31 Filed 2011-05-10
10-K 2010-12-31 Filed 2011-03-03
10-Q 2010-09-30 Filed 2010-11-09
10-Q 2010-06-30 Filed 2010-08-09
10-Q 2010-03-31 Filed 2010-05-07
10-K 2009-12-31 Filed 2010-02-26
8-K 2020-10-21
8-K 2020-10-06
8-K 2020-08-24
8-K 2020-07-29
8-K 2020-05-07
8-K 2020-04-16
8-K 2020-03-23
8-K 2020-01-22
8-K 2019-11-06
8-K 2019-10-23
8-K 2019-10-18
8-K 2019-07-24
8-K 2019-05-02
8-K 2019-04-24
8-K 2019-01-23
8-K 2018-10-24
8-K 2018-10-03
8-K 2018-09-04
8-K 2018-08-03
8-K 2018-07-25
8-K 2018-06-11
8-K 2018-06-05
8-K 2018-05-25
8-K 2018-05-18
8-K 2018-05-02
8-K 2018-04-25
8-K 2018-04-02
8-K 2018-01-24

USAP 10Q Quarterly Report

Part I. Financial Information
Item 1. Financial Statements
Note 1: Nature of Business and Basis of Presentation
Note 2: Net Loss per Common Share
Note 3: Revenue Recognition
Note 4: Inventory
Note 5: Leases
Note 6: Long - Term Debt
Note 7: New Markets Tax Credit Financing Transaction
Note 8: Fair Value Measurement
Note 9: Commitments and Contingencies
Note 10: Income Taxes
Note 11: Derivatives and Hedging
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations
Item 3. Quantitative and Qualitative Disclosures About Market Risk
Item 4. Controls and Procedures
Part II. Other Information
Item 1. Legal Proceedings
Item 1A. Risk Factors
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
Item 3. Defaults Upon Senior Securities
Item 4. Mine Safety Disclosures
Item 5. Other Information
Item 6. Exhibits
EX-31.1 usap-ex311_6.htm
EX-31.2 usap-ex312_8.htm
EX-32.1 usap-ex321_7.htm

Universal Stainless & Alloy Products Earnings 2021-03-31

Balance SheetIncome StatementCash Flow
3803042281527602012201420172020
Assets, Equity
75563718-1-202012201420172020
Rev, G Profit, Net Income
25167-2-11-202012201420172020
Ops, Inv, Fin

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

 

FORM 10-Q

 

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Quarterly Period Ended March 31, 2021 

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

 

UNIVERSAL STAINLESS & ALLOY PRODUCTS, INC.

(Exact name of Registrant as specified in its charter)

 

 

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)

(412) 257-7600

(Registrant’s telephone number, including area code)

 

 

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 April 16, 2021, there were 8,894,822 shares of the Registrant’s common stock outstanding.

 

 

 

i


 

Universal Stainless & Alloy Products, Inc.

Table of Contents

 

 

 

DESCRIPTION

 

PAGE NO.

 

 

 

 

 

PART I.

 

FINANCIAL INFORMATION

 

1

 

 

 

 

 

Item 1.

 

Financial Statements

 

1

 

 

 

 

 

 

 

Consolidated Statements of Operations

 

1

 

 

 

 

 

 

 

Consolidated Statements of Comprehensive Loss

 

2

 

 

 

 

 

 

 

Consolidated Balance Sheets

 

3

 

 

 

 

 

 

 

Consolidated Statements of Cash Flow

 

4

 

 

 

 

 

 

 

Consolidated Statements of Shareholders' Equity

 

5

 

 

 

 

 

 

 

Notes to the Unaudited Consolidated Financial Statements

 

6

 

 

 

 

 

Item 2.

 

Management's Discussion and Analysis of Financial Condition and Results of Operations

 

13

 

 

 

 

 

Item 3.

 

Quantitative and Qualitative Disclosures About Market Risk

 

18

 

 

 

 

 

Item 4.

 

Controls and Procedures

 

18

 

 

 

 

 

PART II.

 

OTHER INFORMATION

 

19

 

 

 

 

 

Item 1.

 

Legal Proceedings

 

19

 

 

 

 

 

Item 1A.

 

Risk Factors

 

19

 

 

 

 

 

Item 2.

 

Unregistered Sales of Equity Securities and Use of Proceeds

 

19

 

 

 

 

 

Item 3.

 

Defaults Upon Senior Securities

 

19

 

 

 

 

 

Item 4.

 

Mine Safety Disclosures

 

19

 

 

 

 

 

Item 5.

 

Other Information

 

19

 

 

 

 

 

Item 6.

 

Exhibits

 

20

 

 

 

 

 

SIGNATURES

 

21

 

 

 


 

 

Part I.

FINANCIAL INFORMATION

Item 1.

FINANCIAL STATEMENTS

UNIVERSAL STAINLESS & ALLOY PRODUCTS, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(Dollars in Thousands, Except Per Share Information)

(Unaudited)

 

 

 

Three months ended

 

 

March 31,

 

 

2021

 

2020

 

 

 

 

 

 

 

Net sales

 

$

37,038

 

$

58,494

Cost of products sold

 

 

37,286

 

 

53,585

 

 

 

 

 

 

 

Gross margin

 

 

(248)

 

 

4,909

Selling, general and administrative expenses

 

 

5,231

 

 

5,908

 

 

 

 

 

 

 

Operating loss

 

 

(5,479)

 

 

(999)

Interest expense and other financing costs

 

 

550

 

 

952

Other expense (income), net

 

 

16

 

 

(17)

 

 

 

 

 

 

 

Loss before income taxes

 

 

(6,045)

 

 

(1,934)

Income taxes

 

 

(1,516)

 

 

(523)

 

 

 

 

 

 

 

Net loss

 

$

(4,529)

 

$

(1,411)

 

 

 

 

 

 

 

Net loss per common share - Basic

 

$

(0.51)

 

$

(0.16)

 

 

 

 

 

 

 

Net loss per common share - Diluted

 

$

(0.51)

 

$

(0.16)

 

 

 

 

 

 

 

Weighted average shares of common stock outstanding

 

 

 

 

 

 

Basic

 

 

8,888,815

 

 

8,801,337

Diluted

 

 

8,888,815

 

 

8,801,337

 

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


1


 

 

UNIVERSAL STAINLESS & ALLOY PRODUCTS, INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

(Dollars in Thousands)

(Unaudited)

 

 

 

Three months ended

 

 

 

March 31,

 

 

 

2021

 

 

2020

 

 

 

 

 

 

 

 

 

 

 

 

Net loss

 

$

 

(4,529

)

 

$

 

(1,411

)

Other comprehensive income, net of tax

 

 

 

 

 

 

 

 

 

 

Unrealized gain on derivatives

 

 

 

15

 

 

 

 

120

 

Comprehensive loss

 

$

 

(4,514

)

 

$

 

(1,291

)

 

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

 

2


 

 

UNIVERSAL STAINLESS & ALLOY PRODUCTS, INC.

CONSOLIDATED BALANCE SHEETS

(Dollars in Thousands, Except Per Share Information)

 

 

 

March 31,

 

December 31,

 

 

2021

 

2020

 

 

(Unaudited)

 

 

ASSETS

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

Cash

 

$

423

 

$

164

Accounts receivable (less allowance for doubtful accounts of $203)

 

 

20,669

 

 

18,101

Inventory, net

 

 

111,596

 

 

111,380

Other current assets

 

 

7,177

 

 

7,471

 

 

 

 

 

 

 

Total current assets

 

 

139,865

 

 

137,116

 

 

 

 

 

 

 

Property, plant and equipment, net

 

 

163,693

 

 

164,983

Other long-term assets

 

 

1,079

 

 

947

 

 

 

 

 

 

 

Total assets

 

$

304,637

 

$

303,046

 

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

Accounts payable

 

$

19,151

 

$

12,632

Accrued employment costs

 

 

3,087

 

 

1,826

Current portion of long-term debt

 

 

1,893

 

 

16,713

Other current liabilities

 

 

840

 

 

2,722

 

 

 

 

 

 

 

Total current liabilities

 

 

24,971

 

 

33,893

 

 

 

 

 

 

 

Long-term debt, net

 

 

49,672

 

 

33,471

Deferred income taxes

 

 

4,214

 

 

5,725

Other long-term liabilities, net

 

 

4,305

 

 

4,277

 

 

 

 

 

 

 

Total liabilities

 

 

83,162

 

 

77,366

 

 

 

 

 

 

 

Stockholders’ equity:

 

 

 

 

 

 

Senior preferred stock, par value $0.001 per share; 1,980,000 shares authorized; 0 shares issued and outstanding

 

 

-

 

 

-

Common stock, par value $0.001 per share; 20,000,000 shares authorized; 8,894,822 and 8,883,788 shares issued, respectively

 

 

9

 

 

9

Additional paid-in capital

 

 

94,585

 

 

94,276

Accumulated other comprehensive loss

 

 

(30)

 

 

(45)

Retained earnings

 

 

126,911

 

 

131,440

 

 

 

 

 

 

 

Total stockholders’ equity

 

 

221,475

 

 

225,680

 

 

 

 

 

 

 

Total liabilities and stockholders’ equity

 

$

304,637

 

$

303,046

 

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

3


 

UNIVERSAL STAINLESS & ALLOY PRODUCTS, INC.

CONSOLIDATED STATEMENTS OF CASH FLOW

(Dollars in Thousands)

(Unaudited)

 

 

 

 

Three months ended

 

 

 

 

March 31,

 

 

 

 

2021

 

 

 

2020

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating Activities:

 

 

 

 

 

 

 

 

 

 

 

 

Net loss

 

 

$

 

(4,529

)

 

 

$

 

(1,411

)

Adjustments for non-cash items:

 

 

 

 

 

 

 

 

 

 

 

 

Depreciation and amortization

 

 

 

 

4,834

 

 

 

 

 

5,025

 

Deferred income tax

 

 

 

 

(1,518

)

 

 

 

 

(525

)

Share-based compensation expense

 

 

 

 

309

 

 

 

 

 

511

 

Changes in assets and liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

Accounts receivable, net

 

 

 

 

(2,568

)

 

 

 

 

(1,019

)

Inventory, net

 

 

 

 

(639

)

 

 

 

 

12

 

Accounts payable

 

 

 

 

6,149

 

 

 

 

 

(9,161

)

Accrued employment costs

 

 

 

 

1,261

 

 

 

 

 

(687

)

Income taxes

 

 

 

 

7

 

 

 

 

 

7

 

Other

 

 

 

 

(1,689

)

 

 

 

 

(524

)

 

 

 

 

 

 

 

 

 

 

 

 

 

Net cash provided by (used in) operating activities

 

 

 

 

1,617

 

 

 

 

 

(7,772

)

 

 

 

 

 

 

 

 

 

 

 

 

 

Investing Activity:

 

 

 

 

 

 

 

 

 

 

 

 

Capital expenditures

 

 

 

 

(2,683

)

 

 

 

 

(4,042

)

 

 

 

 

 

 

 

 

 

 

 

 

 

Net cash used in investing activity

 

 

 

 

(2,683

)

 

 

 

 

(4,042

)

 

 

 

 

 

 

 

 

 

 

 

 

 

Financing Activities:

 

 

 

 

 

 

 

 

 

 

 

 

Borrowings under revolving credit facility

 

 

 

 

29,541

 

 

 

 

 

49,232

 

Payments on revolving credit facility

 

 

 

 

(20,820

)

 

 

 

 

(34,872

)

Proceeds from term loan facility

 

 

 

 

8,571

 

 

 

 

 

-

 

Payments on term loan facility, finance leases, and notes

 

 

 

 

(15,428

)

 

 

 

 

(2,483

)

Payments of financing costs

 

 

 

 

(539

)

 

 

 

 

-

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net cash provided by financing activities

 

 

 

 

1,325

 

 

 

 

 

11,877

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net increase in cash

 

 

 

 

259

 

 

 

 

 

63

 

Cash at beginning of period

 

 

 

 

164

 

 

 

 

 

170

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash at end of period

 

 

$

 

423

 

 

 

$

 

233

 

 

 

 

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


4


 

 

UNIVERSAL STAINLESS & ALLOY PRODUCTS, INC.

CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY

(Dollars in Thousands)

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Accumulated

 

 

 

 

 

 

 

 

 

 

 

 

Common

 

 

 

 

 

 

 

Additional

 

 

 

 

 

 

 

other

 

 

 

 

 

 

 

 

 

 

 

 

shares

 

 

Common

 

 

paid-in

 

 

Retained

 

 

comprehensive

 

 

Treasury

 

 

 

Treasury

 

 

 

outstanding

 

 

stock

 

 

capital

 

 

earnings

 

 

loss

 

 

shares

 

 

 

stock

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

For the three months ended March 31, 2021

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance at December 31, 2020

 

 

8,883,788

 

 

$

 

9

 

 

$

 

94,276

 

 

$

 

131,440

 

 

$

 

(45

)

 

 

-

 

 

$

 

-

 

Share-based compensation

 

 

11,034

 

 

 

 

-

 

 

 

 

309

 

 

 

 

-

 

 

 

 

-

 

 

 

-

 

 

 

 

-

 

Net gain on derivative instruments

 

 

-

 

 

 

 

-

 

 

 

 

-

 

 

 

 

-

 

 

 

 

15

 

 

 

-

 

 

 

 

-

 

Net loss

 

 

-

 

 

 

 

-

 

 

 

 

-

 

 

 

 

(4,529

)

 

 

 

-

 

 

 

-

 

 

 

 

-

 

Balance at March 31, 2021

 

 

8,894,822

 

 

$

 

9

 

 

$

 

94,585

 

 

$

 

126,911

 

 

$

 

(30

)

 

 

-

 

 

$

 

-

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

For the three months ended March 31, 2020

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance at December 31, 2019

 

 

8,799,436

 

 

$

 

9

 

 

$

 

94,982

 

 

$

 

150,487

 

 

$

 

(31

)

 

 

294,279

 

 

$

 

(2,311

)

Share-based compensation

 

 

3,680

 

 

 

 

-

 

 

 

 

511

 

 

 

 

-

 

 

 

 

-

 

 

 

-

 

 

 

 

-

 

Net gain on derivative instruments

 

 

-

 

 

 

 

-

 

 

 

 

-

 

 

 

 

-

 

 

 

 

120

 

 

 

-

 

 

 

 

-

 

Net loss

 

 

-

 

 

 

 

-

 

 

 

 

-

 

 

 

 

(1,411

)

 

 

 

-

 

 

 

-

 

 

 

 

-

 

Balance at March 31, 2020

 

 

8,803,116

 

 

$

 

9

 

 

$

 

95,493

 

 

$

 

149,076

 

 

$

 

89

 

 

 

294,279

 

 

$

 

(2,311

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

5


 

 

UNIVERSAL STAINLESS & ALLOY PRODUCTS, INC.

NOTES TO THE UNAUDITED 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 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, 2020 consolidated balance sheet data was derived from the audited 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 consolidated financial statements should be read in conjunction with our most recently audited 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 financial statements include all adjustments necessary to present a fair presentation of the 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 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. The consolidated financial statements include our accounts and the accounts of our wholly–owned subsidiaries. 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 consolidated financial statements.

Recently Adopted Accounting Pronouncements

In December 2019, the Financial Accounting Standards Board issued Accounting Standards Update (“ASU”) 2019-12, “Income Taxes - Simplifying the Accounting for Income Taxes (Topic 740),” which simplifies the accounting for income taxes by removing certain exceptions to the general principles in Topic 740. The amendments in this ASU also improve consistency and simplify other areas of Topic 740 by clarifying and amending existing guidance. The amendments in this ASU will be applied using different approaches depending on what the specific amendment relates to and, for public entities, are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2020. An entity is permitted to early adopt the guidance, and we early adopted ASU 2019-12 as of January 1, 2020. The adoption did not have a material impact on our consolidated financial statements.

Recently Issued Accounting Pronouncements

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

6


 

Note 2: Net loss per Common Share

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

 

 

Three months ended

 

 

 

March 31,

 

 

(dollars in thousands, except per share amounts)

2021

 

 

2020

 

 

 

 

 

 

 

 

 

 

 

 

 

Numerator:

 

 

 

 

 

 

 

 

 

 

Net loss

$

 

(4,529

)

 

$

 

(1,411

)

 

 

 

 

 

 

 

 

 

 

 

 

Denominator:

 

 

 

 

 

 

 

 

 

 

Weighted average number of shares of common stock outstanding

 

 

8,888,815

 

 

 

 

8,801,337

 

 

Weighted average effect of dilutive share-based compensation

 

 

-

 

 

 

 

-

 

 

Diluted weighted average number of shares of common stock outstanding

 

 

8,888,815

 

 

 

 

8,801,337

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss per common share:

 

 

 

 

 

 

 

 

 

 

Net loss per common share - Basic

$

 

(0.51

)

 

$

 

(0.16

)

 

Net loss per common share - Basic

$

 

(0.51

)

 

$

 

(0.16

)

 

 

We had options to purchase 757,775 and 741,550 shares of common stock outstanding at a weighted average price of $21.78 and $24.27 for the three months ended March 31, 2021 and 2020, respectively, which were excluded in the computation of diluted net loss per common share. These options were not included in the computation of diluted net loss per common share because their exercise prices were greater than the average market price of our common stock. In addition, the calculation of diluted net loss per share for the three months ended March 31, 2021 and 2020, respectively, excluded 30,553 and 19,650 shares for the assumed exercise of stock options as a result of being in a net loss position.

Note 3: Revenue Recognition

The Company’s revenues are primarily comprised of 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 revenue to be recognized over time, in advance of shipment, due to there being no alternative use for these grades and shapes without significant economic loss. Also, the Company maintains an enforceable right to payment including a normal profit margin from the customer in the event of contract termination. Contract assets related to services performed and not yet billed of $2.0 million and $2.3 million are included in Accounts Receivable in the Consolidated Balance Sheets at March 31, 2021 and December 31, 2020, respectively.

The Company has elected the following practical expedients allowed under Accounting Standards Codification Topic 606:

 

Shipping costs are not considered to be separate performance obligations.

 

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.

7


 

 

The following summarizes our revenue by melt type:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three months ended March 31,

 

 

 

 

2021

 

 

2020

 

 

Net sales:

 

 

 

 

 

 

 

 

 

 

 

Specialty alloys

 

$

 

29,091

 

 

$