Universal Stainless & Alloy Products, Inc. (NASDAQ:USAP) Q4 2023 Earnings Call Transcript

Turning to our energy markets. In the oil and gas market, we expect fourth quarter sales to range from $3 million to $3.5 million versus $2.6 million in the third quarter of 2023 and $5.3 million in the fourth quarter of 2022. Full year sales are expected to range from $13 million to $14 million, compared with sales of $18 million in 2022. Our sales to the oil and gas market became a smaller portion of our total sales over the past year, reflecting our decision to temporarily shift more of our production to higher-margin aerospace products. We plan to continue that strategy going into 2024. Power generation market sales are expected to approximate $1 million in the fourth quarter, compared with $700,000 in the third quarter, and $1 million in the fourth quarter of 2022.

Full year 2023 sales are expected to approximate $4 million versus $6 million in 2022. As with oil and gas, we have temporarily shifted finishing capacity away from the power gen market to aerospace applications. As we continue to ramp our production levels, we remain well positioned to expand our sales to the energy markets in the future. In summary, we expect to report that we achieved record top line performance for the fourth quarter and full year of 2023 driven by the robust aerospace market, which also drove our record premium alloy sales. We continue to generate positive cash flow to pay down debt. Our capital project in North Jackson expands our VAR capacity with new furnaces that have better technology and better controls for premium production.

Continued strong aerospace demand, combined with our expanding product capabilities and portfolio will drive our progress in 2024 and beyond. This concludes my report. Thank you for joining us this morning and we look forward to returning in March to discuss our final fourth quarter and full year 2023 results. Have a good day.

Operator: This concludes today’s conference call. Thank you for participating. You may now disconnect.

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