AMPCO PITTSBURGH CORP

For the period ended Dec 31, 2023. Filed Mar 25, 2024.

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A company's yearly report to the SEC, with audited financial statements. It is the fullest account a company gives of its business, its finances and the risks it sees.

FY2023 · Filed Mar 25, 2024

AP$6.80+13.3%Stored close · as of Nov 10, 2026

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Contents

Item 8. Financial Statements and Supplementary Data

	December 31,
(in thousands, except par value)	2023	2022
Assets
Current assets:
Cash and cash equivalents	$7,286	$8,735
Receivables, less allowance for credit losses	78,939	72,495
Receivables from related parties	912	1,066
Inventories	124,694	121,739
Insurance receivable – asbestos, less allowance for credit losses	15,000	15,000
Contract assets	4,452	4,931
Other current assets	5,370	7,442
Total current assets	236,653	231,408
Property, plant and equipment, net	158,732	154,998
Operating lease right-of-use assets, net	4,767	3,522
Insurance receivable – asbestos, less allowance for credit losses	145,245	90,910
Deferred income tax assets	3,160	2,141
Intangible assets, net	4,947	5,194
Investments in joint ventures	2,175	2,175
Prepaid pensions	4,951	7,242
Other noncurrent assets	5,024	5,184
Total assets	$565,654	$502,774
Liabilities and Shareholders’ Equity
Current liabilities:
Accounts payable	$36,830	$43,209
Accounts payable to related parties	401	412
Accrued payrolls and employee benefits	14,703	11,796
Debt – current portion	12,271	12,410
Operating lease liabilities – current portion	946	635
Asbestos liability – current portion	24,000	23,000
Other current liabilities	27,734	24,763
Total current liabilities	116,885	116,225
Employee benefit obligations	41,684	43,431
Asbestos liability	214,679	130,575
Long-term debt	116,382	93,061
Noncurrent operating lease liabilities	3,822	2,886
Deferred income tax liabilities	543	2,518
Other noncurrent liabilities	88	682
Total liabilities	494,083	389,378
Commitments and contingent liabilities (Note 12)
Shareholders’ equity:
Common stock – par value $1; authorized 40,000 shares; issued and outstanding 19,729 shares at December 31, 2023 and 19,404 shares at December 31, 2022	19,729	19,404
Additional paid-in capital	177,196	175,656
Retained deficit	(72,997)	(32,322)
Accumulated other comprehensive loss	(62,989)	(58,412)
Total Ampco-Pittsburgh shareholders’ equity	60,939	104,326
Noncontrolling interest	10,632	9,070
Total shareholders’ equity	71,571	113,396
Total liabilities and shareholders’ equity	$565,654	$502,774

	For The Years Ended December 31,
(in thousands, except per share amounts)	2023	2022
Net sales:
Net sales	$415,319	$380,255
Net sales to related parties	7,021	9,934
Total net sales	422,340	390,189
Operating costs and expenses:
Costs of products sold (excluding depreciation and amortization)	347,781	327,996
Selling and administrative	50,884	43,527
Depreciation and amortization	17,674	17,408
Charge (credit) for asbestos-related costs, net	40,696	(2,226)
(Gain) loss on disposal of assets	(121)	706
Total operating costs and expenses	456,914	387,411
(Loss) income from operations	(34,574)	2,778
Other (expense) income:
Investment-related income	128	519
Interest expense	(9,347)	(5,434)
Other – net	4,516	7,693
	(4,703)	2,778
(Loss) income before income taxes	(39,277)	5,556
Income tax benefit (provision)	1,158	(1,576)
Net (loss) income	(38,119)	3,980
Less: Net income attributable to noncontrolling interest	1,809	564
Net (loss) income attributable to Ampco-Pittsburgh	$(39,928)	$3,416
Net (loss) income per share attributable to Ampco-Pittsburgh common shareholders:
Basic	$(2.04)	$0.18
Diluted	$(2.04)	$0.18
Weighted-average number of common shares outstanding:
Basic	19,617	19,319
Diluted	19,617	19,444

CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME

	For The Years Ended December 31,
(in thousands)	2023	2022
Net (loss) income	$(38,119)	$3,980
Other comprehensive loss, net of income tax where applicable:
Adjustments for changes in:
Foreign currency translation	3,009	(11,848)
Unrecognized employee benefit costs (including effects of foreign currency translation)	(6,976)	6,825
Fair value of cash flow hedges	4	(512)
Reclassification adjustments for items included in net (loss) income:
Amortization of unrecognized employee benefit costs	(891)	1,115
Settlement of cash flow hedges	30	387
Other comprehensive loss	(4,824)	(4,033)
Comprehensive loss	(42,943)	(53)
Less: Comprehensive income (loss) attributable to noncontrolling interest	1,562	(163)
Comprehensive (loss) income attributable to Ampco-Pittsburgh	$(44,505)	$110

CONSOLIDATED STATEMENTSOF SHAREHOLDERS’ EQUITY

(in thousands) · CommonStock · AdditionalPaid-inCapital · RetainedDeficit · AccumulatedOtherComprehensiveLoss · NoncontrollingInterest · Total
Balance January 1, 2022	$19,184		$174,561		$(35,738)		$(55,106)		$9,233		$112,134
Stock-based compensation		1,665							1,665
Comprehensive loss:
Net income				3,416				564		3,980
Other comprehensive loss						(3,306)		(727)		(4,033)
Comprehensive loss							(163)		(53)
Shareholder exercise of warrants (Note 13)	48		(48)							-
Issuance of common stock including excess tax benefits of $0	172		(522)							(350)
Balance December 31, 2022	19,404		175,656		(32,322)		(58,412)		9,070		113,396
Impact of new accounting standard (Note 2)				(747)					(747)
Adjusted balance at January 1, 2023	19,404		175,656		(33,069)		(58,412)		9,070		112,649
Stock-based compensation		2,146							2,146
Comprehensive income (loss):
Net (loss) income				(39,928)				1,809		(38,119)
Other comprehensive loss						(4,577)		(247)		(4,824)
Comprehensive income (loss)							1,562		(42,943)
Issuance of common stock including excess tax benefits of $0	325		(606)							(281)
Balance December 31, 2023	$19,729		$177,196		$(72,997)		$(62,989)		$10,632		$71,571

	For The Years Ended December 31,
(in thousands)	2023	2022
Cash flows from operating activities:
Net (loss) income	$(38,119)	$3,980
Adjustments to reconcile net (loss) income from operations to net cash flows used in operating activities:
Depreciation and amortization	17,674	17,408
Charge (credit) for asbestos-related costs	40,887	(2,226)
Deferred income tax expense	(2,964)	468
Difference between net periodic pension and other postretirement costs and contributions	(6,541)	(9,295)
Stock-based compensation	2,146	1,665
Non-cash provisions – net	(64)	(2,215)
Other – net	804	(729)
Changes in assets/liabilities:
Receivables	(5,473)	(11,626)
Inventories	(1,401)	(17,903)
Other assets	762	(3,943)
Insurance receivable – asbestos	12,780	10,708
Asbestos liability	(23,374)	(19,834)
Accounts payable	(6,358)	1,557
Accrued payrolls and employee benefits	2,740	3,892
Other liabilities	2,815	885
Net cash flows used in operating activities	(3,686)	(27,208)
Cash flows from investing activities:
Purchases of property, plant and equipment	(20,448)	(16,688)
Proceeds from sale of property, plant and equipment	128	17
Purchases of long-term marketable securities	(99)	(724)
Proceeds from sale of long-term marketable securities	734	1,088
Other – net	—	(1)
Net cash flows used in investing activities	(19,685)	(16,308)
Cash flows from financing activities:
Proceeds from revolving credit facility	32,595	44,000
Payments on revolving credit facility	(23,673)	(26,666)
Proceeds from sale and leaseback financing arrangements	2,500	20,000
Payments on sale and leaseback financing arrangements	(268)	(346)
Proceeds from equipment financing facility	10,331	6,388
Proceeds from related party debt	1,768	5,776
Repayment of related party debt	(1,096)	(5,776)
Repayment of debt	(469)	(645)
Proceeds from shareholder exercise of warrants	—	193
Debt and equity issuance costs	—	(337)
Net cash flows provided by financing activities	21,688	42,587
Effect of exchange rate changes on cash and cash equivalents	234	(673)
Net decrease in cash and cash equivalents	(1,449)	(1,602)
Cash and cash equivalents at beginning of year	8,735	10,337
Cash and cash equivalents at end of year	$7,286	$8,735
Supplemental disclosures of cash flow information:
Income tax payments (net of refunds)	$2,335	$896
Interest payments (net of amounts capitalized)	7,921	5,923
Non-cash investing and financing activities:
Purchases of property, plant and equipment in accounts payable	$461	$994
Finance lease right-of-use assets exchanged for lease liabilities	199	1,105
Operating lease right-of-use assets exchanged for lease liabilities	1,956	194

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(dollars in thousands, except per share amounts)

Description of Business

Ampco-Pittsburgh Corporation and its subsidiaries (collectively, the “Corporation”) manufacture and sell highly engineered, high-performance specialty metal products and customized equipment utilized by industry throughout the world. It operates intwo business segments, the Forged and Cast Engineered Products (“FCEP”) segment and the Air and Liquid Processing (“ALP”) segment. This segment presentation is consistent with how the Corporation’s chief operating decision-maker evaluates financial performance and makes resource allocation and strategic decisions about the business.

The Segments

The FCEP segment produces forged hardened steel rolls, cast rolls and forged engineered products (“FEP”). Forged hardened steel rolls are used primarily in hot and cold rolling mills by producers of steel, aluminum and other metals. Cast rolls, which are produced in a variety of iron and steel qualities, are used mainly in hot strip mills, medium/heavy section mills, roughing mills, and plate mills. FEP principally are sold to customers in the steel distribution market, oil and gas industry and the aluminum and plastic extrusion industries. The segment has operations in the United States, England, Sweden, and Slovenia and equity interests inthree joint venture companies in China. Collectively, the segment primarily competes with European, Asian and North American and South American companies in both domestic and foreign markets and operates several sales offices located throughout the world.

The ALP segment includes Aerofin, Buffalo Air Handling and Buffalo Pumps, all divisions of Air & Liquid Systems Corporation (“Air & Liquid”), a wholly owned subsidiary of the Corporation. Aerofin produces custom-engineered finned tube heat exchange coils and related heat transfer products for a variety of industries including OEM/commercial, nuclear power generation and industrial manufacturing. Buffalo Air Handling produces large custom-designed air handling systems for institutional (e.g., hospital, university), pharmaceutical and general industrial building markets. Buffalo Pumps manufactures centrifugal pumps for the fossil-fueled power generation, marine defense and industrial refrigeration industries. The segment has operations in Virginia and New York with headquarters in Carnegie, Pennsylvania. The segment utilizes an independent group of sales offices located throughout the United States and Canada.

While the Corporation currently is operating at more normal levels, when compared to the operating levels during the pandemic and immediately thereafter, it continues to be challenged by lingering global economic effects of a post-pandemic environment and repercussions from the Russia-Ukraine conflict, among other events, including:

The Corporation is actively monitoring, and will continue to actively monitor, the geopolitical and economic consequence of these events and the potential impact on its operations, financial condition, liquidity, suppliers, industry, and workforce.

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