- Sales up 7% versus prior year quarter
- Forged and Cast Engineered Products Backlog up 16%
sequentially
- Price increase actions commenced
- Cost reduction actions in progress and capital equipment
improvement plan on track
Ampco-Pittsburgh Corporation (NYSE: AP) (the "Corporation" or
“Ampco-Pittsburgh”) reported net sales of $81.2 million and $260.4
million, respectively, for the three and nine months ended
September 30, 2021, compared to $75.7 million and $241.5 million
for the three and nine months ended September 30, 2020,
respectively. The increase is primarily attributable to higher
sales of forged engineered products to the steel distribution and
energy markets and higher sales of cast rolls for hot strip
mills.
Loss from operations for the three and nine months ended
September 30, 2021, was $2.4 million and $1.0 million,
respectively, compared to income from operations of $0.2 million
and $4.4 million for the three and nine months ended September 30,
2020, respectively. The decline primarily reflects under-recovery
of the inflationary effects of production costs as well as higher
maintenance spending associated with extended machine outages in
the Forged and Cast Engineered Products segment, which more than
offset the effect of higher sales and improved absorption of
manufacturing costs from higher production levels. For the nine
months ended September 30, 2021, the decline additionally reflects
an insurance recovery of $0.8 million received in the first quarter
of the prior year.
Commenting on the quarter, Ampco-Pittsburgh’s CEO, Brett
McBrayer, said, “While I am proud of how our team has been able to
navigate and mitigate much of the supply chain issues that nearly
all manufacturers are now facing, we have seen significant
inflationary pressures impacting our business. Our sales agreements
with index-based surcharges do not uniformly cover all inflationary
cost elements and our pricing is under-recovering the rapid rise in
operating costs in the Forged and Cast Engineered Products Segment.
As a result, we are now implementing price increase actions across
the business.”
Mr. McBrayer continued, “The plant downtime we took for planned
maintenance during the quarter positions us well for the expected
higher production rates evident with our backlog growth. The
extended outages of some of our key equipment further emphasize the
importance of the plant modernization capital projects we have
underway to further reduce our cost structure. As we look to the
future, our recently announced pricing actions should help improve
our margins and the increase in the backlog for the Forged and Cast
Engineered Products segment points to top-line growth in 2022.”
Investment-related income for the three months ended September
30, 2021, declined compared to the prior year due to the timing of
dividend income recorded one quarter earlier this year, but is
approximately comparable year-to-date. Interest expense for the
three and nine months ended September 30, 2021, declined in
comparison to the prior year based on reduced debt. Other – net
improved for the three and nine months ended September 30, 2021,
due to higher pension income and gains on foreign exchange
transactions in the current quarter and fewer losses
year-to-date.
The income tax provision for the nine months ended September 30,
2021, includes an unusual expense of $0.4 million, or $0.02 per
common share, for the revaluation of certain deferred income tax
liabilities for a future tax rate change enacted in the U.K. during
the second. The income tax benefit for the nine months ended
September 30, 2020, includes a benefit of $3.5 million due to
expanded tax loss carryback provisions made possible by the CARES
Act.
Basic loss per share was $0.08 and $0.02 for the three and nine
months ended September 30, 2021, respectively. This compares to
earnings of $0.07 and $0.45 per share for the three and nine months
ended September 30, 2020, respectively. Basic earnings per share
for the nine months ended September 30, 2020, included a $0.34 per
share combined benefit for the CARES Act tax loss carryback and the
insurance recovery.
Segment Results
Forged and Cast Engineered
Products
Sales for the Forged and Cast Engineered Products segment for
the three and nine months ended September 30, 2021, improved from
the prior year period primarily due to higher sales of forged
engineered products to the oil and gas and steel distribution
markets and higher sales of cast rolls for hot strip mills.
Operating results for the three months ended September 30, 2021,
declined compared to the prior year primarily due to under-recovery
of the inflationary effects of production costs as well as higher
maintenance spending associated with extended machine outages,
which more than offset the effect of higher sales and improved
absorption from higher production levels. For the nine months ended
September 30, 2021, the decline additionally reflects an insurance
recovery of $0.8 million received in the prior year.
Air and Liquid Processing
Sales for the Air and Liquid Processing segment for the three
and nine months ended September 30, 2021, declined slightly
compared to the prior year due to delays in availability of
trucking and certain parts due to supply chain issues, but
operating results were comparable due to higher pricing and
productivity improvements.
Teleconference Access
Ampco-Pittsburgh Corporation (NYSE: AP) will hold a conference
call on Thursday, November 4, 2021, at 10:30 a.m. Eastern Time (ET)
to discuss its financial results for the third quarter ended
September 30, 2021. 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/10161101/ee83174b90. 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.
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
control; 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. 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 September
30,
Nine Months Ended September
30,
2021
2020
2021
2020
Net sales
$
81,185
$
75,674
$
260,413
$
241,515
Cost of products sold
(excl. depreciation and amortization)
67,990
59,461
213,011
189,604
Selling and administrative
10,910
11,445
34,538
33,474
Depreciation and amortization
4,279
4,511
13,515
13,863
Loss on disposal of assets
367
79
334
131
Total operating expenses
83,546
75,496
261,398
237,072
(Loss) income from operations
(2,361
)
178
(985
)
4,443
Other income (expense):
Investment-related income
14
1,215
1,079
1,327
Interest expense
(834
)
(1,018
)
(2,672
)
(3,228
)
Other – net
2,006
1,493
4,694
2,510
Total other income – net
1,186
1,690
3,101
609
(Loss) income before income taxes
(1,175
)
1,868
2,116
5,052
Income tax (provision) benefit
(291
)
(630
)
(2,044
)
1,649
Net (loss) income
(1,466
)
1,238
72
6,701
Less: Net income attributable to
noncontrolling interest
123
270
431
923
Net (loss) income attributable to
Ampco-Pittsburgh
$
(1,589
)
$
968
$
(359
)
$
5,778
Net (loss) income per share attributable
to
Ampco-Pittsburgh common shareholders:
Basic
$
(0.08
)
$
0.07
$
(0.02
)
$
0.45
Diluted
$
(0.08
)
$
0.07
$
(0.02
)
$
0.43
Weighted-average number of common
shares
outstanding:
Basic
19,093
13,343
18,905
12,915
Diluted
19,093
14,454
18,905
13,585
AMPCO-PITTSBURGH
CORPORATION
SEGMENT INFORMATION
(in thousands)
Three Months Ended September
30,
Nine Months Ended September
30,
2021
2020
2021
2020
Net Sales:
Forged and Cast Engineered Products
$
61,179
$
54,499
$
195,558
$
173,723
Air and Liquid Processing
20,006
21,175
64,855
67,792
Consolidated
$
81,185
$
75,674
$
260,413
$
241,515
(Loss) Income from Operations:
Forged and Cast Engineered Products
$
(2,832
)
$
1,301
$
688
$
5,434
Air and Liquid Processing
2,891
2,261
7,265
7,691
Corporate costs
(2,420
)
(3,384
)
(8,938
)
(8,682
)
Consolidated
$
(2,361
)
$
178
$
(985
)
$
4,443
View source
version on businesswire.com: https://www.businesswire.com/news/home/20211104005659/en/
Michael G. McAuley Senior Vice President, Chief Financial
Officer and Treasurer (412) 429-2472 mmcauley@ampcopgh.com
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