AMPCO PITTSBURGH CORP Q4 FY2024 earnings call

• Brett McBrayer mentioned earnings per common share for Q4 2024 was $6 and full year was $0.02, net cash flow from operating activities for Q4 2024 was $7.5 million and full year 2024 was $18 million. Income from operations for 2024 was $12.2 million including a $4.1 million non-cash asbestos-related benefit. - David Anderson stated Air and Liquid Processing segment had record sales in 2024, Q4 revenue up 6.5%, year-to-date up 11%, Q4 operating income improved, received $4 million additional funding from US Navy for Buffalo facility, saw positive activity in nuclear and pharmaceutical markets. - Sam Lyon said Forged and Cast Engineered Products segment Q4 2024 net sales $66.5 million, segment operating income $1.1 million, initiated formal collective consultation process with UK workforce due to losses, full-year 2024 operating income $10.5 million, 38% improvement from 2023.

Air and Liquid Processing segment: Achieved record sales for 2024, improving 11% from prior year, with Q4 revenue increasing 6.5% vs prior year, year-to-date revenue up 11% vs prior year. Q4 operating income was $7.6 million vs prior year's loss of $38.5 million. Year-to-date operating income was $15.9 million vs prior year's loss of $29.1 million. Forged and Cast Engineered Products segment: Fourth quarter 2024 net sales were $66.5 million vs $75.8 million in Q4 2023. Segment operating income improved to $1.1 million in Q4 2024 and $10.5 million for full year 2024, reflecting a 38% improvement from 2023 despite lower sales.

• CapEx for 2025 is expected to be flattish with some grant funding to mitigate. - The 2025 CapEx plan is not expected to be too different from previous years but will have grant funding to help reduce the impact.

• UK plant has weighed negatively on results for several years, collective consultation process may lead to plant closure which could impact annual operating income. - Tariffs may have indirect effects through changing demand dynamics involving customers in Canada and Mexico. - Uncertainty regarding asbestos-related liabilities and revaluations which can affect comparability of financial results.

Q: Referring to the UK situation, can you clarify what kind of what your game plan is there? Are you just looking to reduce the workforce or operations in general, or are you considering exiting that operation? And secondly, given what we're hearing about European spending perhaps going up particularly in Germany. I don't know how much of that operation supplies into Europe or not, but could that possibly improve your outlook for the operations of that plant?

A: Hi, John. This is Sam Lyon. First of all, over the last three years really, we've had significant losses in the UK, and it's gotten to the point where without some intervention or help, we don't see a sustainable path forward. So the formal process in the UK is to enter collective consultation, which we have done, which allows the workforce as well as the local governments and governments of the UK to decide how and if they can help us to stem these losses as we don't see normal market conditions such as you're mentioning in Germany. Significantly affecting the path forward for this operation? So that process takes several months. Once that's completed, a conclusion will be rendered, which could be anything from, you know, getting enough support for new equipment, you know, tax breaks, things like that that the normal government could do. To help us to if they can't help us and the union can't see a path forward to stem the losses or return them to breakeven, could result in the complete closure of the plant.

Q: Do you have year-end backlog by business segment?

A: Yes, David, we do. On Monday. But I did say that and you're going to see this in the 10-Ks coming out on backlog was flat with 2023. 2023, $379 million total. 2024 being flat, it's $379 million as of December 31, 2024. The composition of which is Forged and Cast Engineered Products, $250.5 million. And Air and Liquid Processing, $128.4 million.

Q: To circle back to the UK plant, I'm kinda curious. What kind of roles are they making, you know, cast or forge? Are they large diameter or small? And is it is that capacity that you're just gonna walk away from or can you replace it with your existing facility?

A: Yeah. Dennis, this is Sam. So they it's a cash roll facility. Which primarily serves two product lines, hot mill work rules, and then static cast mostly backup rules or section mill rules. So those are very large, rules that we make anywhere from one hundred to one hundred and thirty of those a year. And then the higher volume rules are the work rules, spun cast rules. The spun cast rules, a high percentage of those can be by if, you know, if we get to the point where we need to close, can be absorbed into our Sweden facility. Yep. Static cash backups the majority of those are probably seventy percent of those would go away, thirty percent or so, we could potentially convert to forged backup roles.