Universal Stainless Announces Amended and Restated Credit Agreement

Rhea-AI Summary

Universal Stainless & Alloy Products, Inc. (Nasdaq: USAP) has amended its $120 million asset-based lending credit agreement with PNC Bank. The new arrangement includes a $105 million revolving credit facility and a $15 million term loan, expiring in March 2026. The update replaces a previous agreement set to expire in August 2023 and is collateralized by the company’s accounts receivables, inventory, and fixed assets. The company also repaid a $15 million seller note tied to its North Jackson facility acquisition, enhancing financial flexibility and reducing interest expenses.

Positive

• Amended credit agreement enhances financial flexibility.
• New agreement allows for lower interest expenses.
• Repayment of seller note strengthens balance sheet.

Negative

• None.

BRIDGEVILLE, Pa., March 19, 2021 (GLOBE NEWSWIRE) -- Universal Stainless & Alloy Products, Inc. (Nasdaq: USAP) announced today that it has amended and restated its five-year $120 million asset-based lending (ABL) credit agreement with PNC Bank, National Association. The new agreement includes a revolving credit facility of $105 million and increases the term loan facility to $15 million. The Company’s obligations under the amended and restated credit agreement continue to be collateralized by substantially all of the Company’s accounts receivables, inventory, and fixed assets. The new credit agreement will expire in March 2026.

The amended and restated credit agreement supersedes the Company’s prior ABL credit agreement with PNC Bank, which was scheduled to expire in August 2023.

In conjunction with this amendment, the Company repaid its $15 million seller note obligation, which was established in connection with the acquisition of the North Jackson, OH facility.

Dennis Oates, Chairman, President and Chief Executive Officer, commented: “This agreement enhances our financial flexibility to support our current growth and long-term strategic initiatives. Market conditions have continued to improve throughout the year, and we are encouraged by both the positive momentum in market demand and the pace of our order entry activity. We continue to execute on our strategic initiatives aimed at expanding our product capabilities and continued cost reduction. Lastly, this amendment also provides interest expense savings, as the amended agreement provides for decreased interest rates compared to the North Jackson seller note obligation.”

About Universal Stainless & Alloy Products, Inc.

Universal Stainless & Alloy Products, Inc., established in 1994 and headquartered in Bridgeville, PA, manufactures and markets semi-finished and finished specialty steels, including stainless steel, nickel alloys, tool steel and certain other alloyed steels. The Company's products are used in a variety of industries, including aerospace, power generation, oil and gas, and heavy equipment manufacturing. More information is available at www.univstainless.com.

Forward-Looking Information Safe Harbor

Except for historical information contained herein, the statements in this release are forward-looking statements that are made pursuant to the “safe harbor” provision of the Private Securities Litigation Reform Act of 1995. Forward-looking statements involve known and unknown risks and uncertainties that may cause the Company’s actual results in future periods to differ materially from forecasted results. Those risks include, among others, the Company’s ability to maintain its relationships with its significant customers and market segments; the Company’s response to competitive factors in its industry that may adversely affect the market for finished products manufactured by the Company or its customers; uncertainty regarding the progress of the return to service of the Boeing 737 MAX aircraft; the Company’s ability to compete successfully with domestic and foreign producers of specialty steel products and products fashioned from alternative materials; changes in overall demand for the Company’s products and the prices at which the Company is able to sell its products in the aerospace industry, from which a substantial amount of our sales is derived; the Company’s ability to develop, commercialize, market and sell new applications and new products; the receipt, pricing and timing of future customer orders; the impact of changes in the Company’s product mix on the Company’s profitability; the Company’s ability to maintain the availability of raw materials and operating supplies with acceptable pricing; the availability and pricing of electricity, natural gas and other sources of energy that the Company needs for the manufacturing of its products; risks related to property, plant and equipment, including the Company’s reliance on the continuing operation of critical manufacturing equipment; the Company’s success in timely concluding collective bargaining agreements and avoiding strikes or work stoppages; the Company’s ability to attract and retain key personnel; the Company’s ongoing requirement for continued compliance with laws and regulations, including applicable safety and environmental regulations; the ultimate outcome of the Company’s current and future litigation matters; the Company’s ability to meet its debt service requirements and to comply with applicable financial covenants; the ultimate outcome of the Company’s PPP loan forgiveness application; risks associated with conducting business with suppliers and customers in foreign countries; public health issues, including COVID-19 and its uncertain impact on our facilities and operations and our customers and suppliers and the effectiveness of the Company’s actions taken in response to these risks; risks related to acquisitions that the Company may make; the Company’s ability to protect its information technology infrastructure against service interruptions, data corruption, cyber-based attacks or network security breaches; the impact on the Company’s effective tax rates from changes in tax rules, regulations and interpretations in the United States and other countries where it does business; and the impact of various economic, credit and market risk uncertainties. Many of these factors are not within the Company’s control and involve known and unknown risks and uncertainties that may cause the Company’s actual results in future periods to be materially different from any future performance suggested herein. Any unfavorable change in the foregoing or other factors could have a material adverse effect on the Company’s business, financial condition and results of operations. Further, the Company operates in an industry sector where securities values may be volatile and may be influenced by economic and other factors beyond the Company’s control. Certain of these risks and other risks are described in the Company’s filings with the SEC, including the Company’s Annual Report on Form 10-K for the year ended December 31, 2020, copies of which are available from the SEC or may be obtained upon request from the Company.

CONTACTS:	Dennis Oates		June Filingeri
	Chairman,		President
	President and CEO		Comm-Partners LLC
	(412) 257-7609		(203) 972-0186

FAQ

What are the key details of USAP's amended credit agreement?

Universal Stainless amended its credit agreement with PNC Bank, adding a $105 million revolving credit facility and a $15 million term loan, set to expire in March 2026.

How does the new credit agreement impact USAP's financial status?

The amended agreement improves financial flexibility and reduces interest expenses compared to previous obligations.

What was repaid in conjunction with the credit agreement amendment?

USAP repaid a $15 million seller note related to the acquisition of its North Jackson facility.

When did USAP amend its credit agreement?

The credit agreement was amended on March 19, 2021.

What is the significance of the collateral in USAP's credit agreement?

The amended agreement is collateralized by the company's accounts receivables, inventory, and fixed assets, ensuring lender security.