Ampco-Pittsburgh Q1 2025 Earnings Report

Ampco-Pittsburgh EPS Results

• Actual EPS: $0.06
• Consensus EPS: N/A
• Beat/Miss: N/A
• One Year Ago EPS: N/A

Ampco-Pittsburgh Revenue Results

• Actual Revenue: $104.27 million
• Expected Revenue: N/A
• Beat/Miss: N/A
• YoY Revenue Growth: N/A

Ampco-Pittsburgh Announcement Details

• Quarter: Q1 2025
• Date: 5/12/2025
• Time: After Market Closes
• Conference Call Date: Tuesday, May 13, 2025
• Conference Call Time: 10:30AM ET

Ampco-Pittsburgh (NYSE:AP), together with its subsidiaries, engages in manufacture and sale of specialty metal products and customized equipment to commercial and industrial users worldwide. The company operates through Forged and Cast Engineered Products (FCEP); and Air and Liquid Processing (ALP) segments. The FCEP segment produces forged hardened steel rolls, cast rolls and, forged engineered products that are used in cold rolling mills by producers of steel, aluminum, and other metals; cast rolls for hot strip mills, medium/heavy section mills, roughing mills, and plate mills; and forged engineered products for narrow and wide strip and aluminum mills, back-up rolls for narrow strip mills, and leveling rolls and shafts. The ALP segment produces custom-engineered finned tube heat exchange coils and related heat transfer products for various industries, including OEM/commercial, nuclear power generation, and industrial manufacturing; custom-designed air handling systems for institutional, pharmaceutical, and general industrial building markets; and manufacture centrifugal pumps for the fossil fueled power generation, marine defense, and industrial refrigeration industries. Ampco-Pittsburgh Corporation was incorporated in 1929 and is headquartered in Carnegie, Pennsylvania.

Ampco-Pittsburgh Q1 2025 Earnings Call Transcript

Key Takeaways

• Q1 earnings beat prior year: Ampco reported earnings per common share of $0.06, up $0.20 year-over-year, and adjusted EBITDA of $8.8 million versus $5.1 million in Q1 2024, with both segments showing significant improvements.
• Record orders in Air & Liquid: The Air and Liquid Systems segment set a new quarterly order-intake record, driven by strong demand in the nuclear, military and pharmaceutical markets, lifting segment EBITDA by 73% year-over-year.
• Tariff headwinds ahead: The company anticipates near-term impacts from recent U.S. and EU tariffs on forged rolls in Q2, but plans to protect margins by passing increased costs to customers.
• UK facility restructuring: Ampco is concluding a collective consultation at its UK Forged & Cast facility by May, with planned actions to “dramatically stem” ongoing losses at that location.
• Strong liquidity position: At quarter-end, Ampco held $7.1 million in cash and $28.6 million of undrawn revolver capacity, supporting ongoing capital investments and pension contributions.

Presentation

[Operator]

Good morning, and welcome to the Ampco Pittsburgh Corporation First Quarter twenty twenty five Earnings Results Conference Call. All participants will be in listen only mode. Please note this event is being recorded. I would now like to turn the conference over to Kim Knox, Corporate Secretary. Please go ahead.

[Kim Knox, Corporate Secretary at Ampco-Pittsburgh]

Thank you, Wyatt, and good morning to everyone joining us on today's first quarter twenty twenty five conference call. Joining me today are Brett McBrayer, our Chief Executive Officer and Mike McAuley, Senior Vice President, Chief Financial and Treasurer. Also joining us on the call today are Sam Lyon, President of Union Electric Steel Corporation and Dave Anderson, President of Air and Liquid Systems Corporation. Before we begin, I would like to remind everyone that participants on this call may make statements or comments that are forward looking and may include financial projections or other statements of the corporation's plans, objectives, expectations or intentions. These matters involve certain risks and uncertainties, many of which are outside the corporation's control.

[Kim Knox, Corporate Secretary at Ampco-Pittsburgh]

The corporation's actual results may differ significantly from those projected or suggested in any forward looking statements due to various risk factors, including those discussed in the corporation's most recently filed Form 10 ks and in subsequent filings with the Securities and Exchange Commission. We do not undertake any obligation to update or otherwise release publicly any revision to our forward looking statements. A replay of this call will be posted on our website later today. To access the earnings release or the webcast replay, please consult the Investors section of our website at amphcophgh.com. With that, I'd like to turn the call over to Brett McBrayer, Amco Pittsburgh's CEO. Brett?

[J. Brett McBrayer, CEO & Director at Ampco-Pittsburgh]

Thank you, Kim. Good morning and thank you for joining our call. As reported in our press release and 10 Q, Amco Pittsburgh Corporation reported earnings per common share of $06 for the first quarter of twenty twenty five, an improvement of $0.20 as compared to the prior year quarter. Adjusted EBITDA for the quarter was $8,800,000 compared to $5,100,000 in the first quarter of twenty twenty four. Both segments showed significant EBITDA improvements versus the prior year.

[J. Brett McBrayer, CEO & Director at Ampco-Pittsburgh]

The quarter was highlighted by record order intake for Air and Liquid and continuing benefits from our new equipment in our U. S. Forge business. We expect to experience some near term impacts in Q2 as markets and supply chains react to the recent tariffs. However, our intent is to protect our margins by passing through to our customers any negative effects.

[J. Brett McBrayer, CEO & Director at Ampco-Pittsburgh]

We are nearing the conclusion of collective consultation process at our U. K. Facility. We expect to eliminate much of the losses for this business as we move forward. For further details regarding our segment performance, I will start by turning the call over to Sam Lyon, President of our Forged and Cast Engineered Products segment.

[Sam Lyon, President of Union Electric Steel Corporation at Ampco-Pittsburgh]

Thank you, Brett, and good morning, everyone. For the first quarter of twenty twenty five, Forged and Cast Engineered Products segment reported net sales of $72,300,000 compared to $777,200,000.0 dollars in the first quarter of twenty twenty four, primarily driven by lower rule volume and unfavorable exchange rates, partially offset by higher base pricing and increased FEP shipments. Segment EBITDA improved significantly to $8,270,000 up from $6,000,000 in the prior year quarter. This improvement resulted from higher pricing, better manufacturing absorption and a lower cost structure. In 2024, we also had $05,000,000 of costs associated with a fire at our Sweden location and a machine failure in The UK.

[Sam Lyon, President of Union Electric Steel Corporation at Ampco-Pittsburgh]

As previously announced, we initiated a formal collective consultation process with employees at our UK cash facility in February. We now expect this process to conclude by the May. At that point, we will have clarity on the future of those operations and our definitive actions to dramatically stem our losses at the location. Turning to market conditions. Global steel demand remains soft but stable in our two largest markets, North America and Europe.

[Sam Lyon, President of Union Electric Steel Corporation at Ampco-Pittsburgh]

That said, we are closely monitoring the evolving tariff environment. Currently, U. S. Tariffs on rules are limited to the baseline of 10%. For our business, these tariffs apply to rules shipped from our European facilities to The U.

[Sam Lyon, President of Union Electric Steel Corporation at Ampco-Pittsburgh]

S. As of yesterday, tariffs on U. S. Produced rules shipped to percent. Our annual shipments to China are small, ranging from 2,000,000 to $5,000,000 per year.

[Sam Lyon, President of Union Electric Steel Corporation at Ampco-Pittsburgh]

We have an order scheduled to ship to China in the next two quarters and the reduction from 125% to 10% tariffs on imports from The U. S. Will relieve pressure and enable this shipment. We have worked with our U. S.

[Sam Lyon, President of Union Electric Steel Corporation at Ampco-Pittsburgh]

Customers and the vast majority have agreed to pay the cost of the tariffs. Importantly, with The U. S. Cast roll market still underserved, our European operations remain competitive despite the tariffs. To date, only one customer has not agreed to accept this condition.

[Sam Lyon, President of Union Electric Steel Corporation at Ampco-Pittsburgh]

This customer has elected to manage orders case by case to see if any trade deals eliminate the tariff. We would also expect the utilization of our U. S. Customers' mills to improve as a result of the more comprehensive tariffs 5% of 25% on aluminum and steel, which will benefit our business. Steel tariffs are also creating a significant tailwind for our domestic FEP business.

[Sam Lyon, President of Union Electric Steel Corporation at Ampco-Pittsburgh]

Growth opportunities distribution bar and block products are emerging as imports face these new costs. FEP sales and margins are projected to rise from our 2024 revenue of $11,800,000 In summary, we continue to enhance our profitability through pricing, operational efficiency and disciplined management of external risks, including tariffs and geopolitical uncertainties. Brett?

[J. Brett McBrayer, CEO & Director at Ampco-Pittsburgh]

Thanks, Sam. Dave Anderson, President of Air and Liquid Systems will now cover his segment's results.

[David Anderson, President of Air & Liquid Systems Corporation at Ampco-Pittsburgh]

Thank you, Brett. Good morning. Great start to the year for Air and Liquid. Q1 sales orders were the highest order intake in our history. The order activity was driven by record order intake from the nuclear market along with continued strong order activity for both the military and pharmaceutical markets.

[David Anderson, President of Air & Liquid Systems Corporation at Ampco-Pittsburgh]

Revenue was slightly below last year. However, the product mix was substantially improved. Revenue for heat exchangers increased due to increased shipments in the nuclear market. Revenue for pumps was slightly higher than prior year, while air handling revenue declined due to the timing of order delivery dates and revenue recognition. Adjusted EBITDA in Q1 was $3,800,000 versus $2,200,000 in the prior year.

[David Anderson, President of Air & Liquid Systems Corporation at Ampco-Pittsburgh]

Similarly, operating income was at 3,500,000.0 in Q1 versus $2,000,000 in the prior year. The increase versus prior year was primarily driven by a much better product mix. We continue to see positive activity in the nuclear market for our heat exchanger product line. We expect both orders and shipments to be at record levels this year. In March, we received our first order for a small modular reactor or SMR project.

[David Anderson, President of Air & Liquid Systems Corporation at Ampco-Pittsburgh]

There is a great deal of activity in the new SMR market and we have started working with several companies that are developing these new products. Nuclear power in many ways seems to have become the preferred power option and our engineering and manufacturing capabilities position us well as this market grows. There continues to be strong demand from the U. S. Navy for both new and aftermarket pumps.

[David Anderson, President of Air & Liquid Systems Corporation at Ampco-Pittsburgh]

We expect this demand to continue as the Navy moves forward with fleet expansion plans. We still expect to receive the new manufacturing equipment from the Navy funding program by the end of twenty twenty five. This equipment along with the equipment we installed in 2024 will position us to meet the expected growth in this market. Demand for custom air handlers remains strong. From upgrading existing facilities to increasing research and manufacturing capabilities in The United States, there continues to be tremendous demand in the pharmaceutical market for our custom air handling products.

[David Anderson, President of Air & Liquid Systems Corporation at Ampco-Pittsburgh]

Of course, tariffs have been a major subject in the last few months, so I wanted to provide some thoughts on how tariffs may impact Air and Liquids businesses. While the tariff situation remains rather fluid at the moment, I do not see significant negative issues. Most of our raw materials and components are excluded from the tariffs as they are either produced in The U. S. Or they are exempted.

[David Anderson, President of Air & Liquid Systems Corporation at Ampco-Pittsburgh]

For components that are subject to tariffs, we expect to pass on the majority of the costs in order to maintain our margins. There is some potential for short term supply issues as the world adapts to the new tariffs. We have taken steps to mitigate supply chain disruptions that could occur later this year. If the tariffs do result in increased manufacturing in The United States, then there is potential for significant demand increases for our products as The U. S.

[David Anderson, President of Air & Liquid Systems Corporation at Ampco-Pittsburgh]

Is our primary market. Onshoring manufacturing in the pharmaceutical market would only drive air handling demand even higher. Overall, more manufacturing would increase the need for our industrial heat exchangers and would drive higher demand for power generation, which would benefit both our commercial pump line and our nuclear heat exchangers. In summary, demand for our products remained strong. Adjusted EBITDA increased 73% versus prior year and while the tariffs could cause short term supply chain issues, in the longer term they have the potential to increase demand for our products.

[J. Brett McBrayer, CEO & Director at Ampco-Pittsburgh]

Thank you, Dave. At this time, Mike McAuley, our Chief Financial Officer, will now share more details regarding our financial performance for the quarter.

[Mike McAuley, CFO, SVP & Treasurer at Ampco-Pittsburgh]

Thank you, Brett. Before I begin, I'd like to comment on a change we implemented in our non GAAP measures reporting starting in this Q1 of twenty twenty five. You will note that these new disclosures and reconciliation tables are in both our Form 10 Q and in our Q1 earnings press release from yesterday. Specifically, we've begun reporting adjusted EBITDA, whereas in prior quarters, we provided consolidated adjusted operating income. We added this because adjusted EBITDA increasingly became a key measure used internally and because we believe investors will find this change helpful.

[Mike McAuley, CFO, SVP & Treasurer at Ampco-Pittsburgh]

Now regarding our Q1 results, as indicated in both our Form 10 Q and in our press release eight ks filed yesterday, Ampco's consolidated net sales for the first quarter of twenty twenty five were $104,300,000 a decline of approximately 5% compared to net sales for the first quarter of twenty twenty four, but about a 3% increase sequentially versus Q4 twenty twenty four. Compared to prior year, the key drivers for the sales decline were lower shipments of mill rolls and changes in rolled product mix, which more than offset higher net pricing in the forged and cast Engineered Products segment and lower sales of air handling units due to timing of shipments in the Air and Liquid Processing segment. Yet Q1 twenty twenty five mill roll sales rose nearly 9% compared to Q4 twenty twenty four, and this was the key driver for Ampco's consolidated sales growth sequentially. Consolidated adjusted EBITDA of $8,800,000 for Q1 twenty twenty five improved by $3,700,000 versus prior year for a few key reasons despite the lower sales. In the Fortunecast Engineered Products segment, higher pricing, net of lower surcharges and related product cost changes, improved the segment's margins significantly.

[Mike McAuley, CFO, SVP & Treasurer at Ampco-Pittsburgh]

In addition, there was improved manufacturing uptime and manufacturing cost efficiency due in part to improved machine reliability and uptime in our cast roll facilities, as Sam described. And in the Air and Liquid Processing segment, as Dave indicated, there was a significant improvement in the product mix sold in Q1 of twenty twenty five compared to the prior year. Corporation's total selling and administrative expenses for Q1 twenty twenty five increased 5% versus prior year due to inflationary increases, higher employee related costs and higher professional fees. Interest expense of $2,700,000 for the quarter was flat with prior year. Other income net was declined slightly versus prior year.

[Mike McAuley, CFO, SVP & Treasurer at Ampco-Pittsburgh]

The income tax provision for Q1 twenty twenty five decreased $400,000 year over year, primarily due to the benefit of reduced tax rate in one of our foreign tax paying jurisdictions. As a result, net income attributable to Ampco Pittsburgh for Q1 twenty twenty five was $1,100,000 or compares to a net loss of $2,700,000 or $0.14 per share in the prior year for a $0.20 per share EPS improvement. Total backlog at 03/31/2025 of $368,500,000 rose $19,700,000 or 6% versus 03/31/2024, with both segments experiencing increases. Compared to 12/31/2025, however, despite the record order intake in Air and Liquid in Q1 twenty twenty five, total backlog declined due to the timing of placement of new orders from some of our larger roll customers, which typically occur later in the year. Net cash flows used by operating activities was $5,300,000 for Q1 twenty twenty five, reflecting primarily capital.

[Mike McAuley, CFO, SVP & Treasurer at Ampco-Pittsburgh]

The corporation also made a pension contribution of $800,000 during the quarter. Capital expenditures for the first quarter of twenty twenty four were $2,200,000 At 03/31/2025, the corporation's liquidity position included cash on hand of $7,100,000 and undrawn availability on a revolving credit facility of $28,600,000 Operator, at this time, we would now like to open the line for questions. Thank you.

[Operator]

We will now begin the question and answer session. Question

[Operator]

Our first question will come from Ronald with Van Ske Holdings. Please go ahead.

[Analyst]

I did not register for a question.

[Operator]

Apologies for that. I will remove you. With no questions, this will conclude our question and answer session. I would like to turn the conference back over to Brett McBrayer, CEO for any closing remarks.

[J. Brett McBrayer, CEO & Director at Ampco-Pittsburgh]

Thank you. I want to recognize the strong performance by our employees in Q Q1 as they continue to drive positive improvements throughout our businesses. Thank you for your great work. I also want to thank our shareholders and Board of Directors for your continued support. Despite the uncertainty in our markets, we remain focused on delivering significant improvements in our businesses as we move forward. Thank you for joining our call this morning.

[Operator]

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.

Participants

Executives

• Kim Knox, Corporate Secretary
• J. Brett McBrayer, CEO & Director
• Sam Lyon, President of Union Electric Steel Corporation
• David Anderson, President of Air & Liquid Systems Corporation
• Mike McAuley, CFO, SVP & Treasurer

Analysts

• Analyst