- Corporation reports EPS of $0.12 per share for Q4 2020,
sequentially higher than Q3 2020.
- Full year 2020 EPS of $0.56 per share versus $(1.67) loss in
full year 2019. First full year of profitability since 2015 despite
impact of COVID-19.
- Capitalization significantly improved from 2019. Total debt
reduced by $33.6 million or 47% from December 31, 2019.
Ampco-Pittsburgh Corporation (NYSE: AP) (the "Corporation" or
“Ampco-Pittsburgh”) reported net income for the three and twelve
months ended December 31, 2020, of $2.2 million, or $0.12 per
common share, and $8.0 million, or $0.56 per common share,
respectively. By comparison, the Corporation reported net income
for the three months ended December 31, 2019, of $3.1 million, or
$0.24 per common share, and a net loss of $(21.0) million, or
$(1.67) per common share, for the twelve months ended December 31,
2019. For the full year 2019, this includes a loss from
discontinued operations, net of tax, of $(9.1) million, or $(0.72)
per common share.
Sales from continuing operations were $87.0 million and $328.5
million for the three and twelve months ended December 31, 2020,
respectively, compared to $97.0 million and $397.9 million for the
three and twelve months ended December 31, 2019, respectively. The
decrease is primarily attributable to a lower volume of shipments
for the Forged and Cast Engineered Products segment due to deferral
of deliveries by customers in the flat-rolled steel and aluminum
markets and reduced demand for forged engineered products,
primarily in the oil and gas market.
Commenting on the quarter and full year results, Brett McBrayer,
Ampco-Pittsburgh’s Chief Executive Officer, said, “Despite the
decline in sales driven by the global pandemic, Ampco-Pittsburgh
delivered another profitable quarter in Q4 2020 and improved
sequentially over prior quarter EPS. The restructuring initiatives
and efficiency improvements our team has been engaged in over the
past two years have positioned us to face these challenges and
deliver our first profitable year since 2015 while improving our
liquidity position. We are cautiously optimistic that order
activity levels will increase moving into the second half of 2021
as the lingering impacts of the pandemic subside.”
The Corporation reported income from continuing operations for
the three and twelve months ended December 31, 2020, of $2.0
million and $6.4 million, respectively, compared to income of $3.0
million and a loss of $(10.9) million, respectively, for the same
periods of the prior year. Income from continuing operations for
the twelve months ended December 31, 2020, includes $0.8 million in
subsequent proceeds from a 2018 business interruption claim
(“Proceeds from Business Interruption Insurance Claim”) and a $0.3
million charge associated with the potential insolvency of an
asbestos-related insurance carrier (“Asbestos-Related Charge”). By
comparison, loss from continuing operations for the twelve months
ended December 31, 2019, includes $1.8 million in Proceeds from
Business Interruption Insurance Claim, $4.6 million in excess costs
of the Corporation’s Avonmore, PA cast roll manufacturing facility
(“Avonmore”), which was sold in September 2019 (“Excess Costs of
Avonmore”), $2.4 million in professional fees and employee
severance costs associated with the Corporation’s overall
restructuring plan (“Restructuring-Related Costs”), $1.4 million in
bad debt expense for a cast roll customer who had filed for
bankruptcy protection (“Bad Debt Expense”), and an impairment loss
(“Impairment Charge”) of $10.1 million associated with the
write-down of certain assets of Avonmore in anticipation of its
sale.
Excluding the Proceeds from the Business Interruption Insurance
Claim and the Asbestos-Related Charge from the current year
operating results, and the Bad Debt Expense, the Excess Costs of
Avonmore, the Restructuring-Related Costs, the Proceeds from the
Business Interruption Insurance Claim, and the Impairment Charge
from the prior year operating results, as applicable, adjusted
income (loss) from continuing operations, which is not based on
U.S. generally accepted accounting principles (“GAAP”), was $2.3
million and $6.0 million for the three and twelve months ended
December 31, 2020, in comparison to $1.9 million and $5.7 million
for the three and twelve months ended December 31, 2019,
respectively. Adjusted income from continuing operations for the
three and twelve months ended December 31, 2020, increased by $0.4
million and $0.3 million, respectively, in comparison to the prior
year periods, despite decreases in sales of approximately 10% and
17%, respectively, for the three and twelve months ended December
31, 2020, driven principally by the pandemic. Although the current
year periods benefited from reduced SG&A expense compared to
the corresponding periods of 2019, and, we experienced improved
roll pricing and lower raw material costs during fiscal year 2020
compared to fiscal year 2019, these factors were approximately
offset by the pandemic-driven impacts of the lower shipment volumes
and net unfavorable plant absorption from lower production levels
in the Forged and Cast Engineered Products segment. A
reconciliation of these GAAP to non-GAAP results is provided below
under “Non-GAAP Financial Measures Reconciliation Schedule.”
Other income – net for the three months ended December 31, 2020,
improved in comparison to the prior year primarily due to lower
interest expense. On a year-to-date basis, however, lower interest
expense and lower foreign exchange transaction losses in 2020 did
not completely offset the impact of net gains recorded in 2019 from
the curtailment of pension and postretirement plans and special
termination benefit costs associated with the Avonmore cast roll
plant exit.
The income tax benefit for the twelve months ended December 31,
2020, includes a benefit of $3.5 million for the additional tax
loss carryback provisions included in the CARES Act.
Segment Results
Forged and Cast Engineered
Products
Sales for the three and twelve months ended December 31, 2020,
declined 14% and 22% from the respective prior year periods
primarily due to customers deferring shipments for mill rolls in
response to pandemic-related market impacts and, to a lesser
extent, lower demand for other forged engineered products, mainly
in the oil and gas market. Operating results for the three months
ended December 31, 2020, declined compared to prior year given the
$1.8 million in Proceeds from Business Interruption Insurance Claim
recorded in the prior year quarter. The unfavorable effects of
lower sales volumes, pricing and product mix were more than offset
by the favorable effects of reduced cost structure from the
segment’s restructuring efforts and the restructuring-related costs
recorded in the prior year quarter which are not recurring.
Operating results for the twelve months ended December 31, 2020,
improved significantly from the prior year period, as the prior
year included the Impairment Charge, the segment’s portion of the
Restructuring-Related Costs, the Excess Costs of Avonmore, and the
Bad Debt Expense. In addition, favorable pricing and product mix,
lower raw materials costs and lower selling and administrative
expense compared to the prior year partially offset the unfavorable
effects of the lower volume of shipments, net unabsorbed costs due
to the periodic and temporary idling of plant capacity in response
to the pandemic, and the lower Proceeds from Business Interruption
Insurance Claim in the current year compared to the prior year.
Air and Liquid Processing
Despite the market effects of COVID-19, sales for the Air and
Liquid Processing segment for the three and twelve months ended
December 31, 2020, were comparable to prior year levels. Operating
income for the quarter and full year was approximately equal to the
prior year level, as favorable product mix and process improvement
savings offset the Asbestos-Related Charge in the current
period.
Teleconference Access
Ampco-Pittsburgh Corporation (NYSE: AP) will hold a conference
call on Thursday, March 18, 2021, at 10:30 a.m. Eastern Time (ET)
to discuss its financial results for the fourth quarter and fiscal
year ended December 31, 2020. The Corporation encourages
participants to pre-register at any time, including up to and after
the call start time via this link:
https://dpregister.com/sreg/10152460/e2dc80e4bc. Those without
internet access or unable to pre-register should dial in at least
five minutes before the 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 the
Corporation’s website under the Investors menu at
www.ampcopgh.com.
About Ampco-Pittsburgh Corporation
Ampco-Pittsburgh Corporation manufactures and sells highly
engineered, high-performance specialty metal products and
customized equipment utilized by industry throughout the world.
Through its operating subsidiary, Union Electric Steel Corporation,
it is a leading producer of forged and cast rolls for the global
steel and aluminum industry. It also manufactures open-die forged
products that principally are sold to customers in the steel
distribution market, oil and gas industry, and the aluminum and
plastic extrusion industries. The Corporation is also a producer of
air and liquid processing equipment, primarily custom-engineered
finned tube heat exchange coils, large custom air handling systems,
and centrifugal pumps. It operates manufacturing facilities in the
United States, England, Sweden, Slovenia, and participates in three
operating joint ventures located in China. It has sales offices in
North and South America, Asia, Europe, and the Middle East.
Corporate headquarters is located in Carnegie, Pennsylvania.
Non-GAAP Financial
Measures
The Corporation presents non-GAAP adjusted income from
continuing operations as a supplemental financial measure to GAAP
financial measures regarding the Corporation’s operational
performance. This non-GAAP financial measure excludes unusual items
affecting comparability, as described more fully in the footnotes
to the attached “Non-GAAP Financial Measures Reconciliation
Schedule,” including the Impairment Charge, the
Restructuring-Related Costs, the Excess Costs of Avonmore, the Bad
Debt Expense, the Proceeds from Business Interruption Insurance
Claim, and the Asbestos-Related Charge, which the Corporation
believes are not indicative of its core operating results. A
reconciliation of this non-GAAP financial measure to income (loss)
from continuing operations, the most directly comparable GAAP
financial measure, is provided below under “Non-GAAP Financial
Measures Reconciliation Schedule.”
The Corporation has presented non-GAAP adjusted income from
continuing operations because it is a key measure used by the
Corporation’s management and Board of Directors to understand and
evaluate the Corporation’s operating performance and to develop
operational goals for managing the business. Management believes
this non-GAAP financial measure provides useful information to
investors and others in understanding and evaluating the operating
results of the Corporation, enhancing the overall understanding of
the Corporation’s past performance and future prospects, and
allowing for greater transparency with respect to key financial
metrics used by management in its financial and operational
decision-making. Non-GAAP adjusted income from continuing
operations should be used only as a supplement to GAAP information,
in conjunction with the Corporation’s condensed consolidated
financial statements prepared in accordance with GAAP, and should
not be considered in isolation of, or as an alternative to,
measures prepared in accordance with GAAP. There are limitations
related to the use of non-GAAP adjusted income from continuing
operations rather than GAAP income (loss) from continuing
operations. Among other things, the Excess Costs of Avonmore, which
are excluded from the non-GAAP financial measure, necessarily
reflect judgments made by management in allocating manufacturing
and operating costs between Avonmore and the Corporation’s other
operations and in anticipating how the Corporation will conduct
business following the sale of Avonmore, which was completed on
September 30, 2019.
Forward-Looking
Statements
The Private Securities Litigation Reform Act of 1995 (the “Act”)
provides a safe harbor for forward-looking statements made by or on
behalf of Ampco-Pittsburgh Corporation (the “Corporation”). This
press release may include, but is not limited to, statements about
operating performance, trends, events that the Corporation expects
or anticipates will occur in the future, statements about sales and
production levels, restructurings, the impact from global pandemics
(including COVID-19), profitability and anticipated expenses,
future proceeds from the exercise of outstanding warrants, and cash
outflows. 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 and
words such as “may,” “will,” “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 the
Corporation, these risks and uncertainties include, but are not
limited to: cyclical demand for products and economic downturns;
excess global capacity in the steel industry; fluctuations of the
value of the U.S. dollar relative to other currencies; increases in
commodity prices or shortages of key production materials;
consequences of global pandemics (including COVID-19); changes in
the existing regulatory environment; new trade restrictions and
regulatory burdens associated with “Brexit”; inability of the
Corporation to successfully restructure its operations; limitations
in availability of capital to fund the Corporation’s operations and
strategic plan; inoperability of certain equipment on which the
Corporation relies; work stoppage or another industrial action on
the part of any of the Corporation’s unions; liability of the
Corporation’s subsidiaries for claims alleging personal injury from
exposure to asbestos-containing components historically used in
certain products of those subsidiaries; inability to satisfy the
continued listing requirements of the New York Stock Exchange or
NYSE American; failure to maintain an effective system of internal
controls; potential attacks on information technology
infrastructure and other cyber-based business disruptions; and
those discussed more fully elsewhere in this report and in
documents filed with the Securities and Exchange Commission by the
Corporation, particularly in Item 1A, Risk Factors, in Part I of
the Corporation’s latest Annual Report on Form 10-K, and Part II of
the Quarterly Report on Form 10-Q for the period ended September
30, 2020. The Corporation cannot guarantee any future results,
levels of activity, performance or achievements. In addition, there
may be events in the future that the Corporation may not be 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,
the Corporation assumes no obligation, and disclaims 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 December 31,
Twelve
Months Ended December 31,
2020
2019
2020
2019
Sales
$
87,029
$
97,019
$
328,544
$
397,904
Cost of products sold
(excl. depreciation and amortization)
67,909
75,925
257,513
326,157
Selling and administrative
12,068
13,464
45,542
53,643
Depreciation and amortization
4,712
4,556
18,575
18,967
Impairment charge
-
-
-
10,082
Charge for asbestos litigation
283
-
283
-
Loss (gain) on disposal of assets
54
30
185
(37
)
Total operating expenses
85,026
93,975
322,098
408,812
Income (loss) from continuing
operations
2,003
3,044
6,446
(10,908
)
Other income (expense) – net
1,645
868
2,254
2,541
Income (loss) from continuing operations
before income taxes
3,648
3,912
8,700
(8,367
)
Income tax (provision) benefit
(1,179
)
(392
)
470
(2,108
)
Net income (loss) from continuing
operations
2,469
3,520
9,170
(10,475
)
Loss from discontinued operations, net of
tax
-
(54
)
-
(9,085
)
Net income (loss)
2,469
3,466
9,170
(19,560
)
Less: Net income attributable to
noncontrolling interest
277
391
1,200
1,426
Net income (loss) attributable to
Ampco-Pittsburgh
$
2,192
$
3,075
$
7,970
$
(20,986
)
Net income (loss) from continuing
operations per share
attributable to Ampco-Pittsburgh common
shareholders:
Basic
$
0.12
$
0.25
$
0.56
$
(0.95
)
Diluted
$
0.12
$
0.25
$
0.54
$
(0.95
)
Loss from discontinued operations, net of
tax, per share
attributable to Ampco-Pittsburgh common
shareholders:
Basic
$
-
$
(0.01
)
$
-
$
(0.72
)
Diluted
$
-
$
(0.01
)
$
-
$
(0.72
)
Net income (loss) per share attributable
to
Ampco-Pittsburgh common shareholders:
Basic
$
0.12
$
0.24
$
0.56
$
(1.67
)
Diluted
$
0.12
$
0.24
$
0.54
$
(1.67
)
Weighted-average number of
common shares outstanding:
Basic
18,312
12,646
14,272
12,590
Diluted
18,752
12,692
14,636
12,590
AMPCO-PITTSBURGH
CORPORATION
SEGMENT INFORMATION
(in thousands)
Three
Months Ended December 31,
Twelve
Months Ended December 31,
2020
2019
2020
2019
Net Sales:
Forged and Cast Engineered Products
$
64,166
$
74,331
$
237,889
$
305,630
Air and Liquid Processing
22,863
22,688
90,655
92,274
Consolidated
$
87,029
$
97,019
$
328,544
$
397,904
Income (Loss) from Continuing
Operations:
Forged and Cast Engineered Products
$
3,187
$
4,510
$
8,621
$
(6,130
)
Air and Liquid Processing
2,442
2,631
10,133
10,002
Corporate costs
(3,626
)
(4,097
)
(12,308
)
(14,780
)
Consolidated
$
2,003
$
3,044
$
6,446
$
(10,908
)
AMPCO-PITTSBURGH CORPORATION NON-GAAP
FINANCIAL MEASURES RECONCILIATION SCHEDULE (in thousands)
As described under “Non-GAAP Financial Measures” above, the
Corporation presents non-GAAP adjusted income (loss) from
continuing operations as a supplemental financial measure to GAAP
financial measures. The following is a reconciliation of income
(loss) from continuing operations, the most directly comparable
GAAP financial measure, to this non-GAAP financial measure for the
three and twelve months ended December 31, 2020 and 2019:
Three
Months Ended December 31,
Twelve
Months Ended December 31,
2020
2019
2020
2019
Income (loss) from continuing
operations,
as reported (GAAP)
$
2,003
$
3,044
$
6,446
$
(10,908
)
Impairment Charge (1)
-
-
-
10,082
Restructuring-Related Costs (2)
-
697
-
2,350
Excess Costs of Avonmore (3)
-
-
-
4,572
Bad Debt Expense (4)
-
-
-
1,366
Proceeds from Business Interruption
Insurance Claim (5)
-
(1,803
)
(769
)
(1,803
)
Asbestos-Related Charge (6)
283
-
283
-
Income (loss) from continuing operations,
as
adjusted (Non-GAAP)
$
2,286
$
1,938
$
5,960
$
5,659
(1)
Represents an impairment charge recognized
in the first quarter of 2019 to record certain assets of Avonmore
to their estimated net realizable value less costs to sell in
anticipation of their sale, which was completed in September
2019.
(2)
Represents professional fees associated
with the Corporation’s overall restructuring plan and employee
severance costs due to reductions in force.
(3)
Represents estimated net operating costs
not expected to continue after the sale of certain assets of
Avonmore, which was completed in September 2019. The estimated
excess costs include judgments made by management in allocating
manufacturing and operating costs between Avonmore and the
Corporation’s other operations and in anticipating how it will
conduct business following the sale of Avonmore.
(4)
Represents bad debt expense for a British
cast roll customer who filed for bankruptcy in 2019.
(5)
Represents business interruption insurance
proceeds received for equipment outages that occurred in 2018.
(6)
Represents a charge for the potential
insolvency of an asbestos-related insurance carrier.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20210318005505/en/
Michael G. McAuley Senior Vice President, Chief Financial
Officer and Treasurer (412) 429-2472 mmcauley@ampcopgh.com
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