AMPCO PITTSBURGH CORP
For the period ended Jun 30, 2024. Filed Aug 12, 2024.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jun 30, 2024 · Filed Aug 12, 2024
AP$5.89-1.0%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-03-31; filed 2024-05-13.
0000950170-24-058689
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2024-06-30; filed 2024-08-12.
0000950170-24-095513
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 87 previous paragraphs and 103 current paragraphs.
45 unchanged; 30 reworded; 27 added; 12 removed; 0 previous and 1 current paragraphs rearranged.
Tables are not compared: 5 previous and 6 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (27)
Current report
Selling and administrative expenses for each of the three and six months periods were comparable and approximated $13,550 and $14,093 for the three months ended June 30, 2024 and 2023, respectively, and $26,523 and $26,280 for the six months ended June 30, 2024 and 2023, respectively.
Current report
Interest expense approximated $3,017 and $2,245 for the three months ended June 30, 2024 and 2023, respectively, and $5,774 and $4,316, for the six months ended June 30, 2024 and 2023, respectively. When compared to the same periods of the prior year, the increase is principally due to:
Current report
In addition, as of December 31, 2023, as a result of the Corporation moving certain of its cast roll production from the U.K. to Sweden given the significant increases in energy costs in the U.K. due in part to Russia-Ukraine conflict, the Corporation’s U.K. operations entered into a three-year cumulative loss position resulting in a valuation allowance to be established against the net deferred income tax assets of the U.K. operations. As of June 30, 2024, the U.K. operations remain in a three-year cumulative loss position. Accordingly, the income tax provision for the three and six months ended June 30, 2024 does not include any income tax benefit for the net operating losses of the U.K. By comparison, the income tax provision for the three and six months ended June 30, 2023, which is prior to establishing the valuation allowance, includes a income tax benefit for the operating losses of the U.K.
Current report
Net income attributable to Ampco-Pittsburgh and net income per common share attributable to Ampco-Pittsburgh for the three and six months ended June 30, 2023 include an after-tax benefit associated with the Foreign Energy Credit of $1,874 or $0.10 per common share.
Current report
The change in net sales for the three and six months ended June 30, 2024, when compared to the same periods of the prior year, is primarily due to the following:
Current report
Higher volume of and favorable changes in product mix for forged roll sales, particularly earlier in 2024, which increased net sales by approximately $100 and $3,100 for the three and six months ended June 30, 2024, respectively;
Current report
Lower volume of FEP shipments, which decreased net sales by approximately $1,800 and $2,000 for the three and six months ended June 30, 2024, respectively.
Current report
Changes in exchange rates between the periods reduced net sales slightly for the current year periods when compared to the same periods of the prior year.
Current report
Lower selling and administrative costs associated primarily with lower commissions and professional fees, which increased income from operations by approximately $700 for each of the three and six months ended June 30, 2024, respectively; offset by
Current report
Lower manufacturing absorption and the insurance deductible associated with a fire at one of the Corporation’s cast roll facilities in the first quarter of 2024, which decreased operating income by approximately $1,100 and $1,500 for the three and six months ended June 30, 2024; respectively;
Current report
Foreign Energy Credit of $1,874 received in the prior year which benefited operating income for the three and six months ended June 30, 2023;
Current report
Impact from the net lower volume of shipments, which decreased operating income by approximately $1,200 and $900 for the three and six months ended June 30, 2024, respectively; and
Current report
Changes in exchange rates between the periods reduced income from operations slightly for the current year periods when compared to the same periods of the prior year.
Current report
Operating income fluctuated between the periods principally due to:
Current report
Higher volume of shipments, net of changes in product mix and manufacturing costs, which increased operating income by approximately $700 and $300 for the three and six months ended June 30, 2024; offset by
Current report
Non-GAAP Financial Measures
Current report
The Corporation presents non-GAAP adjusted income from operations which is calculated as income from operations excluding the Foreign Energy Credit for the three and six months ended June 30, 2023. This non-GAAP financial measure is not based on any standardized methodology prescribed by accounting principles generally accepted in the United States of America (“GAAP”) and may not be comparable to similarly titled measures presented by other companies.
Current report
The Corporation has presented non-GAAP adjusted income from 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 its business. This non-GAAP financial measure excludes significant charges or credits that are one-time charges or credits, or unrelated to the Corporation’s ongoing results of operations, or beyond its control. Additionally, a portion of the incentive and compensation arrangements for certain employees is based on the Corporation’s business performance. The Corporation believes this non-GAAP financial measure helps identify underlying trends in its business that otherwise could be masked by the effect of the items it excludes from adjusted income from operations. In particular, the Corporation believes the exclusion of the Foreign Energy Credit can provide a useful measure for period-to-period comparisons of the Corporation’s core business performance. The Corporation also believes this non-GAAP financial measure provides useful information to management, shareholders and investors, and others in understanding and evaluating its operating results, enhancing the overall understanding of its past performance and future prospects and allowing for greater transparency with respect to key financial metrics used by the Corporation’s management in its financial and operational decision-making.
Current report
Adjusted income from operations is not 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 adjusted income from operations rather than income from operations, which is the nearest GAAP equivalent. Among other things, there can be no assurance that additional benefits similar to the Foreign Energy Credit will not occur in future periods.
Current report
The adjustment reflected in adjusted income from operations is pre-tax. The tax impact associated with the adjustment is not significant due to the Corporation having a valuation allowance recorded against the deferred income tax assets for the jurisdiction where the income is recognized.
Current report
The following is a reconciliation of income from operations to non-GAAP adjusted income from operations for the three and six months ended June 30, 2024 and 2023, respectively:
Current report
(1) Represents reimbursement of past energy costs at one of the Corporation’s foreign operations by its local government.
Current report
Reimbursement of prior years' asbestos-related settlement costs of approximately $1,756 as a result of the Corporation and Air & Liquid entering into a settlement agreement with a previously unsettled insurance carrier during the second quarter of 2024; offset by
Current report
Higher contributions to U.S. defined benefit pension plans of approximately $3,347 for the six months ended June 30, 2024 in comparison to the six months ended June 30, 2023; and
Current report
Proceeds from the Foreign Energy Credit of approximately $1,874 received in the second quarter of 2023.
Current report
Net cash flows used in investing activities equaled $(4,370) and $(9,560) for the six months ended June 30, 2024 and 2023, respectively, and include capital expenditures for the FCEP segment related to the previously announced capital program undertaken to upgrade existing equipment at certain of its locations. The capital program was completed during the second quarter of 2024. In addition, a division of the ALP segment has initiated purchases of key machinery which may be able to be subsidized by various government incentives such as grants. Through June 30, 2024, the Corporation received approximately $808 in government incentives to help offset the cost of such key machinery. To date, no repayment obligations exist for any government incentives received. At
Current report
Lower proceeds from sale and leaseback financing arrangements of $2,500;
Removed paragraphs (12)
Previous report
Selling and administrative expenses approximated $12,973 and $12,187 for the three months ended March 31, 2024 and 2023, respectively, or an increase of $786. The increase is due primarily to higher employee-related costs and inflationary increases in expenses.
Previous report
Interest expense approximated $2,757 and $2,071 for the three months ended March 31, 2024 and 2023, respectively, or an increase of $686. The increase is principally due to:
Previous report
Higher volume of forged roll sales, which increased sales by approximately $3,000 for the three months ended March 31, 2024; offset by
Previous report
Net sales of FEP were relatively comparable quarter to quarter. Changes in exchange rates did not have a significant impact on net sales for the three months ended March 31, 2024, when compared to the three months ended March 31, 2023.
Previous report
Income from operations for the three months ended March 31, 2024 decreased when compared to the same period of the prior year primarily due to:
Previous report
Recognition of repairs and maintenance expenses and unabsorbed costs of $900 in the first quarter of 2024 associated with a fire at one of the Corporation's cast roll facilities;
Previous report
Net improvement in production levels at the remaining facilities, which increased operating income by approximately $500 for the three months ended March 31, 2024; and
Previous report
Benefit from the higher net volume of shipments, which improved operating income by approximately $300 for the three months ended March 31, 2024.
Previous report
Changes in exchange rates did not have a significant impact on operating income for the three months ended March 31, 2024, when compared to the three months ended March 31, 2023.
Previous report
Operating income for the three months ended March 31, 2024 decreased when compared to the three months ended March 31, 2023 principally due to:
Previous report
Unfavorable product mix and higher manufacturing costs, net of the benefit from the higher volume of shipments, which reduced operating income by approximately $400 for the three months ended March 31, 2024;
Previous report
Availability under the Corporation’s equipment financing facility is expected to be sufficient to finance the remaining expenditures associated with the capital program for the FCEP segment, in the time frame currently anticipated. At March 31, 2024, availability under the equipment financing facility approximated $2,147. Each borrowing on the equipment financing facility constitutes a secured loan transaction (each, a “Term Loan”). Each Term Loan converted to a Term Note on the earlier of (i) the date in which the associated equipment is placed in service or (ii) April 30, 2024 (previously March 31, 2024). Each Term Note has a term of 84 months, with payment commencing on the date of the Term Note.
Reworded paragraphs (30)
Previous wording
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 Ampco-Pittsburgh Corporation and its subsidiaries (collectively, “we,” “us,” “our,” or the “Corporation”). Management’s Discussion and Analysis of Financial Condition and Results of Operations and other sections of this Quarterly Report on Form 10-Q, as well as the condensed consolidated financial statements and notes hereto, may include, but are not limited to, statements about operating performance, trends and events we expect or anticipate will occur in the future, statements about sales and production levels, restructurings, the impact from pandemics and geopolitical conflicts, 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,” “target,” “goal,” “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 us, these risks and uncertainties include, but are not limited to:
Current wording
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 Ampco-Pittsburgh Corporation and its subsidiaries (collectively, “we,” “us,” “our,” or the “Corporation”). Management’s Discussion and Analysis of Financial Condition and Results of Operations and other sections of this Quarterly Report on Form 10-Q, as well as the condensed consolidated financial statements and notes hereto, may include, but are not limited to, statements about operating performance, trends and events we expect or anticipate will occur in the future, statements about sales and production levels, timing of orders for our products, restructurings, the impact from pandemics and geopolitical conflicts, 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,” “target,” “goal,” “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 us, these risks and uncertainties include, but are not limited to:
Previous wording
For the FCEP segment, the forged roll market in North America has been flat as a result of end customer demand; however, order intake is expected to improve in the second half of the year, for delivery in 2025. Higher pricing and increased market share, when compared to a year ago, is expected to help minimize the effect of the expected decline in the overall volume of shipments for 2024. The cast roll market remains weak as Europe continues to experience economic uncertainty and due to the entry of low-priced product from China. The FEP market remains challenged by increased imports and high inventory levels at bar distributors. The primary focus for this segment is to maintain a strong position in the roll market and, with the completion of the previously announced capital program, to improve operational efficiencies and reliability at its domestic forge facilities and increase capacity for the manufacturing of its FEP.
Current wording
For the FCEP segment, the roll market in North America has been flat as a result of end customer demand; however, order intake is expected to improve in the second half of the year, for delivery in 2025. Higher pricing and increased market share, when compared to a year ago, is expected to help minimize the effect of the expected decline in the overall volume of shipments for 2024. While stable, the European steel producers are operating at lower levels when compared to pre-pandemic levels as Europe continues to experience economic uncertainty and due to the entry of low-priced product from China. In addition, increased imports of flat rolled steel has resulted in pricing and volume pressures for steel producers there. The FEP market remains challenged by increased imports and high inventory levels at bar distributors. The primary focus for this segment is to maintain a strong position in the roll market and, with the completion of the previously announced capital program, to improve operational efficiencies and reliability at its domestic forge facilities and increase capacity for the manufacturing of its FEP.
Previous wording
Net sales approximated $110,215 and $104,803 for the three months ended March 31, 2024 and 2023, respectively. The increase is attributable to higher sales for the ALP segment. A discussion of net sales for the Corporation’s two segments is included below.
Current wording
Net sales approximated $110,988 and $107,211 for the three months ended June 30, 2024 and 2023, respectively, and $221,203 and $212,014 for the six months ended June 30, 2024 and 2023, respectively. The increase is attributable to higher sales for the ALP segment. A discussion of net sales for the Corporation’s two segments is included below.
Previous wording
Income from operations approximated $82 and $1,993 for the three months ended March 31, 2024 and 2023, respectively. A discussion of income from operations for the Corporation’s two segments is included below.
Current wording
Income from operations approximated $5,043 and $3,288 for the three months ended June 30, 2024 and 2023, respectively, and $5,125 and $5,281 for the six months ended June 30, 2024 and 2023, respectively. Included in operating income for the three and six months ended June 30, 2023 is a credit of approximately $1,874 for the reimbursement of past energy costs at one of the Corporation’s foreign operations by its local government (the “Foreign Energy Credit”). A discussion of income from operations for the Corporation’s two segments is included below.
Previous wording
Backlog equaled $348,824 as of March 31, 2024 versus $378,912 as of December 31, 2023. Backlog represents the accumulation of firm orders on hand which: (i) are supported by evidence of a contractual arrangement, (ii) include a fixed and determinable sales price, (iii) have reasonably assured collectability, and (iv) generally are expected to ship within two years from the backlog reporting date. Backlog at a certain date may not be a direct measure of future revenue for a particular order because price increases, negotiated subsequently to the original order, are not included in backlog until the updated contract is received from the customer and certain surcharges are not determinable until the order is complete and ready for shipment to the customer. Approximately 18% of the backlog is expected to be released after 2024. A discussion of backlog by segment is included below.
Current wording
Backlog equaled $360,375 as of June 30, 2024 versus $378,912 as of December 31, 2023. Backlog represents the accumulation of firm orders on hand which: (i) are supported by evidence of a contractual arrangement, (ii) include a fixed and determinable sales price, (iii) have reasonably assured collectability, and (iv) generally are expected to ship within two years from the backlog reporting date. Backlog at a certain date may not be a direct measure of future revenue for a particular order because price increases, negotiated subsequently to the original order, are not included in backlog until the updated contract is received from the customer and certain surcharges are not determinable until the order is complete and ready for shipment to the customer. Approximately 44% of the backlog is expected to be released after 2024. A discussion of backlog by segment is included below.
Previous wording
Costs of products sold, excluding depreciation and amortization, as a percentage of net sales, for the three months ended March 31, 2024 and 2023 approximated 83.9% and 82.4%, respectively. Costs of products sold, excluding depreciation and amortization, for the ALP segment increased primarily due to an unfavorable product mix. Costs of products sold, excluding depreciation and amortization, for the FCEP segment were comparable between the first quarter of 2024 and the first quarter of 2023.
Current wording
Costs of products sold, excluding depreciation and amortization, as a percentage of net sales, for the three months ended June 30, 2024 and 2023 approximated 79.0% and 79.7%, respectively, and for the six months ended June 30, 2024 and 2023 approximated 81.5% and 81.1%, respectively. For the FCEP segment, costs of products sold, excluding depreciation and amortization, for the three and six months ended June 30, 2024 and 2023 were comparable. Whereas the current year periods benefited from favorable pricing, the prior year periods benefited from the Foreign Energy Credit. For the ALP segment, costs of products sold, excluding depreciation and amortization, increased for the three and six months ended June 30, 2024, when compared to the same periods of the prior year, primarily due to an unfavorable product mix of heat exchangers, caused by the timing of shipments for several large orders, and centrifugal pumps, due to shipping older lower-margin orders.
Previous wording
Higher interest on the equipment financing facility, net of capitalized interest, of approximately $70.
Current wording
Higher interest on the equipment financing facility, net of capitalized interest, of approximately $545 and $615 for the three and six months ended June 30, 2024, respectively;
Previous wording
Higher average borrowings outstanding under the revolving credit facility in 2024 versus 2023, which increased interest expense by approximately $300;
Current wording
Higher average borrowings outstanding under the revolving credit facility, which increased interest expense by approximately $120 and $420 for the three and six months ended June 30, 2024, respectively;
Previous wording
Higher average interest rates for 2024 versus 2023, which increased interest expense by approximately $180;
Current wording
Higher average interest rates for 2024 versus 2023, which increased interest expense by approximately $85 and $265 for the three and six months ended June 30, 2024, respectively; and
Previous wording
Higher interest on the sale and leaseback financing transactions, including interest on the proceeds received from the Disbursement Agreement in June 2023, of approximately $110; and,
Current wording
Higher interest on the sale and leaseback financing transactions, including interest on the proceeds received from the Disbursement Agreement in June 2023, which increased interest expense by approximately $50 and $160 for the three and six months ended June 30, 2024, respectively.
Previous wording
Net (loss) income attributable to Ampco-Pittsburgh and net (loss) income per common share attributable to Ampco-Pittsburgh equaled $(2,717) and $(0.14) per common share and $676 and $0.03 per common share for the three months ended March 31, 2024 and 2023, respectively.
Current wording
Net income (loss) attributable to Ampco-Pittsburgh and net income (loss) per common share attributable to Ampco-Pittsburgh equaled $2,012 and $0.10 per common share and $423 and $0.02 per common share for the three months ended June 30, 2024 and 2023, respectively, and equaled $(705) and $(0.04) per common share and $1,099 and $0.06 per common share for the six months ended June 30, 2024 and 2023, respectively.
Previous wording
Lower variable-index surcharges passed through to customers as a result of fluctuation in the price of raw material, energy and transportation, net of improved pricing, which decreased net sales by approximately $1,900 for the three months ended March 31, 2024; and
Current wording
Improved pricing, net of lower variable-index surcharges passed through to customers as a result of fluctuation in the price of raw material, energy and transportation, which increased net sales by approximately $4,100 and $2,200 for the three and six months ended June 30, 2024, respectively; offset by
Previous wording
Lower volume of cast roll shipments, which decreased net sales by approximately $800 for the three months ended March 31, 2024.
Current wording
Lower volume of cast roll shipments, which decreased net sales by approximately $4,000 and $4,800 for the three and six months ended June 30, 2024, respectively; and
Previous wording
Net sales for the three months ended March 31, 2024 increased when compared to the three months ended March 31, 2023 primarily due to the following:
Current wording
Income from operations for the three and six months ended June 30, 2024 increased when compared to the three and six months ended June 30, 2023 primarily due to:
Previous wording
Lower variable-index surcharges and fluctuations in manufacturing costs, which decreased operating income by approximately $400 for the three months ended March 31, 2024;
Current wording
Benefit from improved pricing and fluctuations in manufacturing costs, net of lower variable-index surcharges, which increased income from operations by approximately $5,000 and $4,600 for the three and six months ended June 30, 2024, respectively, and
Previous wording
Lower gains on the disposal of property, plant and equipment associated with equipment being replaced in the prior year in connection with the segment’s strategic capital expenditure program of approximately $125; offset by
Current wording
Lower gains on the disposal of property, plant and equipment associated with equipment being replaced in the prior year in connection with the segment’s strategic capital expenditure program of approximately $131 for the six months ended June 30, 2024.
Previous wording
Backlog decreased at March 31, 2024 from December 31, 2023 by $23,491. The backlog for mill roll orders at March 31, 2024 decreased from December 31, 2023 by approximately $19,200 primarily due to timing of 2025 orders from most of the segment's major forged roll customers which are expected in the second and third quarter of 2024. The backlog for FEP was comparable at March 31, 2024 and December 31, 2023. Lower foreign exchange rates used to translate the backlog of the Corporation’s foreign subsidies into the U.S. dollar decreased backlog at March 31, 2024 when compared to backlog at December 31, 2023 by approximately $4,000. At March 31, 2024, approximately 12% of backlog is expected to ship after 2024.
Current wording
Backlog decreased at June 30, 2024 from December 31, 2023 by $16,153. The backlog for mill roll orders at June 30, 2024 decreased from December 31, 2023 by approximately $12,500 primarily due to timing of 2025 orders from most of the segment’s major forged roll customers which are expected in the third quarter of 2024. The backlog for FEP was comparable at June 30, 2024 and December 31, 2023. Lower foreign exchange rates used to translate the backlog of the Corporation’s foreign subsidies into the U.S. dollar decreased backlog at June 30, 2024 when compared to backlog at December 31, 2023 by approximately $3,600. At June 30, 2024, approximately 39% of backlog is expected to ship after 2024.
Previous wording
Net sales for the three months ended March 31, 2024 improved over the comparable prior year period by $5,021 principally due to an increase in shipments of air handling systems attributable to higher order intake as a result in the segment's expansion of its sales distribution network throughout 2023 and the additional manufacturing facility opened in the third quarter of 2023. Net sales of heat exchange coils for the three months ended March 31, 2024 were comparable to net sales for the three months ended March 31, 2023. Net sales of centrifugal pumps for the first quarter of 2024 benefited from a higher volume of shipments to commercial customers when compared to the first quarter of 2023.
Current wording
Net sales for the three and six months ended June 30, 2024 improved over the comparable prior year periods principally due to an increase in shipments of air handling systems attributable to higher order intake as a result in the segment’s expansion of its sales distribution network throughout 2023 and the additional manufacturing facility opened in the third quarter of 2023. Net sales of heat exchange coils for the three and six months ended June 30, 2024 improved when compared to net sales for the three and six months ended June 30, 2023 primarily as a result of higher net sales to original equipment manufacturers and fossil utility customers. Net sales of centrifugal pumps for the six months ended June 30, 2024 exceed the comparable prior year period due to a higher volume of shipments to commercial customers but declined for the second quarter of 2024 when compared to the second quarter of 2023 as a result of timing of shipments.
Previous wording
Higher selling and administrative costs of approximately $500 for the three months ended March 31, 2024 primarily as a result of higher commissions and employee-related costs including costs associated with expansion of the segment’s sales distribution network; and
Current wording
Higher selling and administrative costs of approximately $500 and $1,000 for the three and six months ended June 30, 2024 primarily as a result of higher commissions and employee-related costs including costs associated with expansion of the segment’s sales distribution network; and
Previous wording
Lease costs associated with the additional manufacturing facility of approximately $100.
Current wording
Higher lease costs associated with the additional manufacturing facility of approximately $100 for the six months ended June 30, 3024.
Previous wording
Backlog at March 31, 2024 decreased from December 31, 2023 by $6,597. Backlog for air handling units decreased approximately $10,600 from December 31, 2023 due to the strong sales quarter and lower order activity as a result of the manufacturing facilities being at capacity for the balance of 2024. Backlog for heat exchange coils and centrifugal pumps improved from December 31, 2023 by approximately $2,100 and $1,900, respectively. At March 31, 2024, approximately 29% of backlog is expected to ship after 2024.
Current wording
Backlog at June 30, 2024 decreased from December 31, 2023 by $2,384. Backlog for air handling units decreased approximately $7,800 from December 31, 2023 due to the strong sales and lower order activity as a result of the manufacturing facilities being at capacity for the balance of 2024. Backlog for centrifugal pumps improved from December 31, 2023 by approximately $5,900 and backlog for heat exchangers was modestly lower versus December 31, 2023. At June 30, 2024, approximately 53% of backlog is expected to ship after 2024.
Previous wording
Net cash flows from (used in) operating activities equaled $4,535 and $(4,391) for the three months ended March 31, 2024 and 2023, respectively. The change in net cash flows from operating activities for the three months ended March 31, 2024 when compared to the three months ended March 31, 2023 primarily is due to a lower investment in trade working capital offset by higher asbestos-related payments of approximately $2,400 for the three months ended March 31, 2024 when compared to the period of 2023. Asbestos-related payments are expected to continue in the foreseeable future. The amount of asbestos-related payments and corresponding insurance recoveries is difficult to predict and can vary based on a number of factors, including changes in assumptions, as outlined in Note 15 to the condensed consolidated financial statements.
Current wording
Net cash flows used in operating activities equaled $(780) and $(7,105) for the six months ended June 30, 2024 and 2023, respectively. The change in net cash flows from operating activities for the six months ended June 30, 2024 when compared to the six months ended June 30, 2023 primarily is due to a lower investment in trade working capital. In addition, net cash flows used in operating activities includes:
Previous wording
Net cash flows used in investing activities equaled $(2,845) and $(3,357) for the three months ended March 31, 2024 and 2023, respectively, and primarily represented capital expenditures for the FCEP segment related to the previously announced capital program undertaken to upgrade existing equipment at certain of its locations. The capital program is substantially complete with the final asset to be placed in service during the second quarter 2024. At March 31, 2024, commitments for future capital expenditures approximated $3,300 which is expected to be spent over the next 12-15 months.
Current wording
June 30, 2024, commitments for future capital expenditures approximated $3,800 which is expected to be spent over the next 12-15 months.
Previous wording
Net cash flows provided by financing activities equaled $2,028 and $4,998 for the three months ended March 31, 2024 and 2023 respectively, a decrease of $2,970 primarily due to:
Current wording
Net cash flows provided by financing activities equaled $5,922 and $17,404 for the six months ended June 30, 2024 and 2023, respectively, a decrease of $11,482 primarily due to:
Previous wording
Lower net borrowings from the Corporation’s revolving credit facility of $507;
Current wording
Lower net borrowings from the Corporation’s revolving credit facility of $5,130;
Previous wording
Lower proceeds from the equipment financing facility of $1,364;
Current wording
Lower proceeds from the equipment financing facility of $2,515;
Previous wording
Higher debt repayments of $206 primarily due to the commencement of principal payments on the equipment financing term loans.
Current wording
Higher debt repayments of $673 primarily due to the commencement of principal payments on the equipment financing Term Notes; and
Previous wording
Repayment of related-party debt in 2024 of $664 in comparison to proceeds from related-party debt of $229 in 2023; and
Current wording
Repayment of related-party debt in 2024 of $664.
Previous wording
As a result of the above, cash and cash equivalents increased by $3,543 during 2024 and ended the period at $10,829 in comparison to $7,286 at December 31, 2023. The majority of the Corporation’s cash and cash equivalents is held by its foreign operations. Domestic customer remittances are used to pay down borrowings under the Corporation’s revolving credit facility daily, resulting in minimal cash maintained by the Corporation’s domestic operations. Cash held by the Corporation’s foreign operations is considered to be permanently re-invested; accordingly, a provision for estimated local and withholding tax has not been made. If the Corporation were to remit any foreign earnings to it or any of its U.S. entities, the estimated tax impact would be insignificant.
Current wording
As a result of the above, cash and cash equivalents increased by $606 during 2024 and ended the period at $7,892 in comparison to $7,286 at December 31, 2023. The majority of the Corporation’s cash and cash equivalents is held by its foreign operations. Domestic customer remittances are used to pay down borrowings under the Corporation’s revolving credit facility daily, resulting in minimal cash maintained by the Corporation’s domestic operations. Cash held by the Corporation’s foreign operations is considered to be permanently re-invested; accordingly, a provision for estimated local and withholding tax has not been made. If the Corporation were to remit any foreign earnings to it or any of its U.S. entities, the estimated tax impact would be insignificant.
Previous wording
Funds on hand, funds generated from future operations and availability under the Corporation’s revolving credit facility are expected to be sufficient to finance the Corporation’s operational requirements and debt service costs. The maturity date for the revolving credit facility is June 29, 2026 and, subject to the other terms and conditions of the revolving credit agreement, will become due on that date. As of March 31, 2024, remaining availability under the revolving credit facility approximated $23,174, net of standard availability reserves. Since a significant portion of the Corporation's debt includes variable interest, increases in the underlying benchmark rates will increase the Corporation's debt service costs.
Current wording
Funds on hand, funds generated from future operations and availability under the Corporation’s revolving credit facility are expected to be sufficient to finance the Corporation’s operational requirements and debt service costs. The maturity date for the revolving credit facility is June 29, 2026 and, subject to the other terms and conditions of the revolving credit agreement, will become due on that date. As of June 30, 2024, remaining availability under the revolving credit facility approximated $20,540, net of standard availability reserves. In addition, although the previously announced capital program undertaken to upgrade existing equipment at certain of the Corporation’s FCEP locations has been completed, subject to the approval of the lender, approximately $1,589 remains available under the Corporation's equipment finance facility to finance other capital projects of the Corporation. Since a significant portion of the Corporation’s debt includes variable rate interest, increases in the underlying benchmark rates will increase the Corporation’s debt service costs.
Rearranged current paragraphs (1)
Current report — wording carried from elsewhere
Asbestos-related payments are expected to continue in the foreseeable future. The amount of asbestos-related payments and corresponding insurance recoveries is difficult to predict and can vary based on a number of factors, including changes in assumptions, as outlined in Note 15 to the condensed consolidated financial statements. Contributions to U.S. defined benefit plans for the remainder of 2024 are expected to approximate $2,700.