- Full-year EPS of $0.18 per diluted share
- Q4 2022 sales up 11% over Q4 2021; full year 2022 sales up
13% over full year 2021
- Non-cash asbestos-related benefit of $2.2 million
pre-tax
- Backlog at 12/31/22 up 26% vs prior year and up 11% vs prior
quarter
Ampco-Pittsburgh Corporation (NYSE: AP) reported net sales of
$93.5 million and $390.2 million for the three and twelve months
ended December 31, 2022, compared to $84.5 million and $344.9
million for the three and twelve months ended December 31, 2021,
respectively. The increase for both the three and twelve months
ended December 31, 2022, over the prior year periods is principally
due to improved pricing, including higher variable-index
surcharges, and increased demand for mill rolls, as well as higher
shipment volumes of custom air handlers and heat exchange
coils.
CEO Brett McBrayer commented, “Our pricing actions in the Forged
and Cast Engineered products segment during the year largely kept
pace with the inflationary pressures experienced, though with a
lagged effect. We announced new price increases in February 2023
for all new roll orders, with material and energy surcharges
remaining in effect. Backlog in the Forged and Cast Engineered
Products segment rebounded in Q4 from Q3. We have installed our
first new lathe and the remainder of our strategic capital
equipment is scheduled for delivery and installation over the next
few quarters of this year. In addition, our growth agenda in Air
& Liquid Processing is proceeding with another record quarter
in its backlog, which grew 69% versus prior year.”
The Corporation reported income from operations for the three
and twelve months ended December 31, 2022, of $0.9 million and $2.8
million, respectively, compared to loss from operations for the
three and twelve months ended December 31, 2021, of $(7.7) million
and $(4.8) million, respectively. The three- and twelve-month
periods ended December 31, 2022, include an asbestos-related
benefit of $2.2 million resulting from a reduction in the estimated
long-term defense cost portion of the Corporation’s asbestos
liability (the “Asbestos Credit”). By comparison, the three- and
twelve-month periods ended December 31, 2021, include a $6.7
million asbestos-related charge resulting from the revaluation of
the asbestos liabilities and the related insurance receivables (the
“Asbestos Charge”). Both the Asbestos Credit and the Asbestos
Charge are recorded in the Air and Liquid Processing segment’s
operating results. Excluding the Asbestos Credit and the Asbestos
Charge, the improved profitability of the Air and Liquid Processing
segment was approximately offset by the higher costs of raw
material, energy and other operating costs, net of improved
pricing, in the Forged and Cast Engineered Products segment.
Interest expense for the three and twelve months ended December
31, 2022, increased due to a rise in total debt and interest rates
for the current year periods when compared to the same periods of
the prior year. “Other – net” declined for the three months ended
December 31, 2022, when compared to the prior year period,
primarily due to larger foreign exchange losses; however, “Other –
net” improved year over year primarily due to favorable foreign
exchange fluctuations, partly offset by unrealized losses on Rabbi
trust investments in the current year versus a gain for full year
2021.
Net (loss) income for the three and twelve months ended December
31, 2022, was $(0.5) million, or $(0.02) per diluted share, and
$3.4 million, or $0.18 per diluted share, respectively. This
compares to net loss for the three and twelve months ended December
31, 2021, of $(7.4) million, or $(0.39) per diluted share, and
$(3.9) million, or $(0.20) per diluted share, respectively.
Change in method of accounting for
inventory valuation
Effective December 31, 2022, the Corporation changed its method
of accounting for the cost of its domestic inventories from the
LIFO method to the FIFO method. At December 31, 2021, approximately
35% of the Corporation's inventories were accounted for using the
LIFO method and, at December 31, 2022, approximately 42% of the
Corporation's inventories would have been accounted for using the
LIFO method had the Corporation not changed. The Corporation
believes the change to the FIFO method of inventory valuation is
preferable as it provides a better matching of costs with the
physical flow of goods, standardizes the Corporation’s inventory
valuation methodology among the locations, and improves
comparability with industry peers. A change from the LIFO method to
the FIFO method is considered a change in accounting principle
requiring all prior periods to be restated as if the Corporation
had used the FIFO method to value its domestic inventories for
those periods and with a cumulative adjustment recorded to retained
deficit, net of tax, of the earliest year presented (i.e., January
1, 2021). The cumulative impact reduced the Corporation's
consolidated retained deficit on January 1, 2021, net of tax, by
$11.5 million. The change reduced net loss for the three and twelve
months ended December 31, 2021, by $4.9 million and $8.8 million,
respectively.
Segment Results
Forged and Cast Engineered
Products
Sales for the three months ended December 31, 2022, increased 8%
compared to the prior year period primarily due to higher pricing
and variable-index surcharges passed through to customers as a
result of higher raw material, energy and transportation costs,
offset in part by an unfavorable currency translation effect. Sales
for the twelve months ended December 31, 2022, improved 15%
compared to the prior year period due to including improved pricing
and higher product surcharges, a higher volume of mill roll
shipments and improved mix, offset in part by unfavorable currency
translation.
Operating results for the segment declined for the three and
twelve months ended December 31, 2022, primarily due to higher
costs of production not being fully offset by the effects of price
increases, higher product surcharges, higher sales volumes and, for
the twelve-month period, improved mix.
Air and Liquid Processing
Sales for the three and twelve months ended December 31, 2022,
improved when compared to the prior year periods by 20% and 7%,
respectively, due to higher shipments of air handling units and
heat exchange coils resulting from actions to strengthen the
segment sales distribution network and capture incremental demand,
which more than offset declines in sales of centrifugal pumps from
project delays associated with the ongoing supply chain issues at
U.S. Navy shipbuilders.
Operating results improved for the three and twelve months ended
December 31, 2022, primarily due to the Asbestos Credit in the
current year periods and the Asbestos Charge in the prior year
periods. In addition, segment operating results improved due to the
higher volume of shipments, changes in product mix and savings
generated from process improvements offset, in part, by higher
operating costs.
Teleconference Access
Ampco-Pittsburgh Corporation will hold a conference call on
Tuesday, March 21, 2023, at 10:30 a.m. Eastern Time (ET) to discuss
its financial results for the fourth quarter and fiscal year ended
December 31, 2022. 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/10176178/f60a50e408. 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 industries. It also manufactures open-die forged
products that are sold principally 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, and Slovenia and participates in
three operating joint ventures located in China. It has sales
offices in North 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 us or
on behalf of the Corporation. This press release may include, but
is not limited to, statements about operating performance, trends
and events that the Corporation expects or anticipates will occur
in the future, statements about sales and production levels,
restructurings, the impact from global pandemics, profitability and
anticipated expenses, inflation, the global supply chain, 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: economic downturns, cyclical demand for our products
and insufficient demand for our products; excess global capacity in
the steel industry; fluctuations in the value of the U.S. dollar
relative to other currencies; increases in commodity prices or
insufficient hedging against increases in commodity prices,
reductions in electricity and natural gas supply or shortages of
key production materials for us or our customers; limitations in
availability of capital to fund our strategic plan; inability to
maintain adequate liquidity in order to meet our operating cash
flow requirements, repay maturing debt and meet other financial
obligations; inability to obtain necessary capital or financing on
satisfactory terms in order to acquire capital expenditures that
may be necessary to support our growth strategy; inoperability of
certain equipment on which we rely and/or our inability to execute
our capital expenditure plan; liability of our subsidiaries for
claims alleging personal injury from exposure to
asbestos-containing components historically used in certain
products of our subsidiaries; changes in the existing regulatory
environment; inability to successfully restructure our operations
and/or invest in operations that will yield the best long term
value to our shareholders; consequences of global pandemics and
international conflicts; work stoppage or another industrial action
on the part of any of our unions; inability to satisfy the
continued listing requirements of the New York Stock Exchange or
the NYSE American Exchange; potential attacks on information
technology infrastructure and other cyber-based business
disruptions; failure to maintain an effective system of internal
control; and those discussed more fully elsewhere in this report,
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 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
December 31,
Twelve Months Ended
December 31,
2022
2021
2022
2021
Net sales
$
93,534
$
84,507
$
390,189
$
344,920
Cost of products sold (excl. depreciation
and amortization)
78,296
69,732
327,996
278,805
Selling and administrative
11,586
11,460
43,527
45,998
Depreciation and amortization
4,275
4,362
17,408
17,877
(Credit) charge for asbestos-related
costs
(2,226
)
6,661
(2,226
)
6,661
Loss on disposal of assets
659
27
706
361
Total operating expenses
92,590
92,242
387,411
349,702
Income (loss) from operations
944
(7,735
)
2,778
(4,782
)
Other income (expense):
Investment-related income
6
5
519
1,084
Interest expense
(1,750
)
(927
)
(5,434
)
(3,599
)
Other – net
674
1,608
7,693
6,302
Total other (expense) income – net
(1,070
)
686
2,778
3,787
(Loss) income before income taxes
(126
)
(7,049
)
5,556
(995
)
Income tax provision
(144
)
(261
)
(1,576
)
(2,305
)
Net (loss) income
(270
)
(7,310
)
3,980
(3,300
)
Less: Net income attributable to
noncontrolling interest
193
130
564
561
Net (loss) income attributable to
Ampco-Pittsburgh
$
(463
)
$
(7,440
)
$
3,416
$
(3,861
)
Net (loss) income per share attributable
to
Ampco-Pittsburgh common shareholders:
Basic
$
(0.02
)
$
(0.39
)
$
0.18
$
(0.20
)
Diluted
$
(0.02
)
$
(0.39
)
$
0.18
$
(0.20
)
Weighted-average number of common
shares
outstanding:
Basic
19,404
19,095
19,319
18,953
Diluted
19,404
19,095
19,444
18,953
AMPCO-PITTSBURGH
CORPORATION
SEGMENT INFORMATION
(in thousands)
Three Months Ended
December 31,
Twelve Months Ended
December 31,
2022
2021
2022
2021
Net Sales:
Forged and Cast Engineered Products
$
69,636
$
64,646
$
299,484
$
260,204
Air and Liquid Processing
23,898
19,861
90,705
84,716
Consolidated
$
93,534
$
84,507
$
390,189
$
344,920
Income (loss) from Operations:
Forged and Cast Engineered Products
$
(1,648
)
$
748
$
444
$
5,073
Air and Liquid Processing
5,509
(4,965
)
13,686
2,601
Corporate costs
(2,917
)
(3,518
)
(11,352
)
(12,456
)
Consolidated
$
944
$
(7,735
)
$
2,778
$
(4,782
)
View source
version on businesswire.com: https://www.businesswire.com/news/home/20230320005654/en/
Michael G. McAuley Senior Vice President, Chief Financial
Officer and Treasurer (412) 429-2472 mmcauley@ampcopgh.com
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