Ampco-Pittsburgh Corporation (NYSE: AP) reported sales from
continuing operations for the three and twelve months ended
December 31, 2018, of $95.8 million and $419.4 million,
respectively, compared to $103.6 million and $385.2 million,
respectively, for the three and twelve months ended December 31,
2017. This excludes sales in all periods for the Corporation’s
Canadian subsidiary, ASW Steel Inc. (“ASW”), which has now been
classified as a discontinued operation pursuant to a plan to sell
this business approved during the fourth quarter. The change in
sales from continuing operations is principally attributable to the
Forged and Cast Engineered Products segment.
Segment Results
Sales from continuing operations for the Forged and Cast
Engineered Products segment declined 8% for the three months ended
December 31, 2018, compared to prior year, due to a lower volume of
shipments of forged engineered products for the oil and gas
industry, as well as lower shipments of forged rolls caused, in
part, by equipment downtime issues carrying over from the third
quarter. Segment sales from continuing operations for the full year
2018 increased 11% compared to 2017, led by higher shipments of
forged engineered products to the oil and gas industry and both
cast and forged mill rolls. Operating results from continuing
operations for the three months ended December 31, 2018, declined
compared to the prior year, driven primarily by the lower volume of
shipments and higher operating costs, including lower cost
absorption and higher equipment maintenance costs. Segment
operating results from continuing operations for the full year 2018
were comparable to 2017. While operating results for the current
year benefited from the higher volume of shipments and improved
pricing, unabsorbed costs from lower production levels, higher
operating costs, and equipment maintenance issues offset the
expected contribution to operating results.
Sales for the Air and Liquid Processing segment for the three
and twelve months ended December 31, 2018, were approximately
comparable to prior year levels. The segment recorded an operating
loss for the three and twelve months ended December 31, 2018,
driven by a charge of $32.9 million, representing the estimated
costs for pending and future asbestos litigation, net of additional
insurance recoveries, through 2052, the anticipated date by which
the Corporation expects to have resolved all asbestos-related
claims (“Asbestos Charge”). Otherwise, results for the segment were
generally comparable to the prior year periods.
Consolidated Results
Loss from continuing operations for the three and twelve months
ended December 31, 2018, was $40.1 million and $44.9 million,
respectively, including the $32.9 million Asbestos Charge. This
compares to loss from continuing operations of $3.3 million and
$13.8 million, respectively, for the comparable prior year
periods.
Other expense for the three months ended December 31, 2018,
increased compared to the prior year, primarily due to higher
interest expense and foreign exchange transaction losses in the
current year versus gains in the prior year. For the full year,
higher pension income and a gain on a commercial settlement with a
third party more than offset higher interest expense and foreign
exchange transaction losses compared to prior year.
Net loss from continuing operations for the three and twelve
months ended December 31, 2018, was $41.0 million, or $3.28 per
common share, and $43.6 million, or $3.50 per common share,
respectively, including the after-tax impact for the Asbestos
Charge of $31.9 million, or $2.55 per common share for the three
months ended and $2.56 per common for the twelve months ended
December 31, 2018. By comparison, net loss from continuing
operations for the three and twelve months ended December 31, 2017,
was $4.2 million, or $0.34 per common share, and $15.1 million, or
$1.22 per common share, respectively.
Discontinued Operations
Loss from discontinued operations, net of tax, reflects the
operations of ASW and for the three and twelve months ended
December 31, 2018, was $18.7 million, or $1.49 per common share,
and $23.9 million, or $1.92 per common share, respectively,
compared to income of $1.2 million, or $0.10 per common share, and
$3.7 million, or $0.30 per common share, respectively, for the
three and twelve months ended December 31, 2017. For 2018, this
includes an estimated impairment charge of $15.0 million, or $1.21
per common share, to record the assets of ASW to their estimated
fair value.
CEO Commentary
Remarking on the quarter and full year results, Brett McBrayer,
Ampco-Pittsburgh’s Chief Executive Officer said, “The planned
divestiture of ASW is another step in the Corporation’s overall
restructuring plan which commenced at the beginning of the fourth
quarter with the sale of our Vertical Seal division. We expect
further asset consolidation in 2019 and have worked to mitigate
equipment reliability issues which hurt second half 2018
performance. With the Q4 asbestos and impairment charges now behind
us, the integration of new leadership, the progression to a
lean-based production system, and further restructuring initiatives
currently in process, we are forming the foundation for future
sustainable profitability for Ampco-Pittsburgh.”
Teleconference Access
Ampco-Pittsburgh Corporation (NYSE: AP) will hold a conference
call on Thursday, March 14, 2019, at 10:30 a.m. Eastern Time (ET)
to discuss its financial results for the fourth quarter ended
December 31, 2018. We encourage participants to pre-register at any
time, including up to and after the call start time via this link:
http://dpregister.com/10128951. Those without internet access or
unable to pre-register should dial in at least five minutes before
start time using:
- Participant Dial-in (Toll Free):
1-844-308-3408
- Participant International Dial-in:
1-412-317-5408
For those unable to listen to the live broadcast, a replay will
be available one hour after the event concludes on our website
under the Investors menu at www.ampcopgh.com.
The Private Securities Litigation Reform Act of 1995 (the “Act”)
provides a safe harbor for forward-looking statements made by or on
our behalf. This news release may contain forward-looking
statements that reflect our current views with respect to future
events and financial performance. All statements in this document
other than statements of historical fact are statements that are,
or could be, deemed forward-looking statements within the meaning
of the Act. In this document, statements regarding future financial
position, sales, costs, earnings, cash flows, other measures of
results of operations, capital expenditures or debt levels and
plans, objectives, outlook, targets, guidance or goals are
forward-looking statements. Words such as “may,” “intend,”
“believe,” “expect,” “anticipate,” “estimate,” “project,”
“forecast” and other terms of similar meaning that indicate future
events and trends are also generally intended to identify
forward-looking statements. Forward-looking statements speak only
as of the date on which such statements are made, are not
guarantees of future performance or expectations, and involve risks
and uncertainties. For Ampco-Pittsburgh, these risks and
uncertainties include, but are not limited to, those described
under Item 1A, Risk Factors, of Ampco-Pittsburgh’s Annual Report on
Form 10-K. In addition, there may be events in the future that we
are not able to predict accurately or control which may cause
actual results to differ materially from expectations expressed or
implied by forward-looking statements. Except as required by
applicable law, we assume no obligation, and disclaim any
obligation, to update forward-looking statements whether as a
result of new information, events or otherwise.
AMPCO-PITTSBURGH CORPORATION FINANCIAL
SUMMARY (in thousands except per share amounts)
Three Months
Ended
Twelve Months
Ended
December
31
December
31
2018
2017
2018
2017
Sales
$ 95,822
$ 103,572 $
419,432 $ 385,155
Cost of products sold (excl. depreciation and
amortization) 83,340 85,069 351,839 316,983 Selling and
administrative 14,939 16,374 58,068 60,164 Depreciation and
amortization 4,971 5,104 21,379 21,376 Charge for asbestos
litigation 32,910 0 32,910 0 (Gain) loss on disposal of assets
(260 )
291
128 401 Total
operating expense
135,900
106,838 464,324
398,924 Loss from continuing
operations (40,078 ) (3,266 ) (44,892 ) (13,769 ) Other (expense)
income – net
(2,067 )
(988 )
1,085
(3,673 )
Loss from continuing operations before
income taxes
(42,145
)
(4,254
)
(43,807
)
(17,442
)
Income tax benefit (provision) 615 (416 ) (268 ) 1,355 Gain on sale
of joint venture
500
500 500
1,036 Net loss from continuing
operations (41,030 ) (4,170 ) (43,575 ) (15,051 )
(Loss) income from discontinued
operations, net of tax
(18,679
)
1,182
(23,901
)
3,749
Net loss (59,709 ) (2,988 ) (67,476 ) (11,302 )
Net income attributable to noncontrolling
interest
534 203
1,859 787
Net loss attributable to
Ampco-Pittsburgh
$
(60,243
)
$
(3,191
)
$
(69,335
)
$
(12,089
)
Net loss from continuing operations per
common share:
Basic
$ (3.28 )
$
(0.34 )
$ (3.50 )
$ (1.22 ) Diluted
$
(3.28 )
$ (0.34 )
$ (3.50 )
$
(1.22 )
(Loss) income from discontinued operations
per common share:
Basic
$ (1.49 )
$
0.10 $ (1.92 )
$ 0.30 Diluted
$
(1.49 )
$ 0.10
$ (1.92 )
$
0.30
Net loss per common share attributable to
Ampco-Pittsburgh:
Basic
$ (4.82 )
$
(0.26 )
$ (5.57 )
$ (0.98 ) Diluted
$
(4.82 )
$ (0.26 )
$ (5.57 )
$
(0.98 )
Weighted-average number of common shares
outstanding:
Basic
12,495 12,361
12,448 12,330
Diluted
12,495
12,361 12,448
12,330
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version on businesswire.com: https://www.businesswire.com/news/home/20190314005419/en/
Michael G. McAuleySenior Vice President, Chief Financial Officer
and Treasurer(412) 429-2472mmcauley@ampcopgh.com
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