Also please note that in this morning's call, management will make forward-looking statements under the Private Securities Litigation Reform Act of 1995. I would like to remind you of the risks related to these statements, which are more fully described in today's press release and in the company's filings with the Securities and Exchange Commission.With these formalities out of the way, I would now like to turn the call over to Denny Oates. Denny, we are ready to begin. Denny Oates Thanks, June. Good morning everyone. Thanks for joining us today. Before getting started with this quarter's review, I want to take a minute to introduce our new Chief Financial Officer Doug McSorley. Doug comes to Universal Stainless with extensive experience in financial management and excellent track record and strategic planning and business development and strong leadership skills. He joined us after a 15 year career at PSC Metals, a metal recycling company with operations in the United States and Canada, which is now part of Icahn Enterprises. Before PSC, Doug worked with numerous industrial clients as a chartered account with Deloitte and Touche in Ontario, Canada. Since Doug is only been with us for a few days, we're going to let him love to hook fairly easily, but I know he has a few introductory comments he wants to make. Doug McSorley Thank you, Denny. It is a great pleasure to be here today and to be a part of the Universal Stainless management team. From the very beginning of the interview process, I was impressed by the level of the energy, the focus and the passion at Universal Stainless to move this company forward. Now that I'm here, I've discovered how pervasive that is throughout the whole company. It is a very exciting time to be here. Let me add that I look forward to getting to know our analysts and our investors in the weeks ahead. I'm planning to keep the same open door policy that this company has always had. With that Denny, let me turn the call back to you.
Denny OatesOkay Doug, thanks. Let's start with the second quarter of 2010. Sales are $51 million, were 48% higher than the 2010 first quarter, and 67% higher than the second quarter of 2009. Volume shift was up 40% sequentially and 72% from the year ago period. So, our robust sales growth was largely volume-driven. Increased volume combined with cost reductions from process and quality improvements, and recently completed capital projects produced operating income of $6.4 million or 12.5% of sales, the highest quarterly operating margins since the third quarter of 2007. Net income was $4.2 million, or $0.61 per diluted share compared to $1.4 million or $0.21 a share in the first quarter of 2010. Cash flow from operations was a use of $800,000 in the second quarter which includes a $4.1 million tax refund. Cash flow has decreased in 2010 due to our investment in manage working capital to support the sharply higher sales activity. However, managed working capital per dollar of sales improved to 35% versus 42.5% in March, 2010 and 46.7% in December, 2009. Day sales outstanding and receivables improved by eight days during the quarter and our FIFO based inventory returns continue to improve reaching three turns compared to 2.5 turns last quarter. Capital expenditures were $2.3 million in the second quarter including $1.2 million for the melt shop upgrade project which will be substantially completed in September. At June 30, our balance sheet remained very strong with cash balances of $34.7 million and total debt of $12.2 million. The $600,000 per quarter principle payments on a $12 million PNC term loan began in May. There were four drivers in the second quarter sales improvement. First, end user demand in certain markets began to improve earlier this year. Second, supply chain restocking began to accelerate late in the first quarter and early in the second quarter. Read the rest of this transcript for free on seekingalpha.com