AMPCO PITTSBURGH CORP
For the period ended Mar 31, 2025. Filed May 12, 2025.
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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.
Mar 31, 2025 · Filed May 12, 2025
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 2024-09-30; filed 2024-11-12.
0000950170-24-124716
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2025-03-31; filed 2025-05-12.
0000950170-25-069330
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 107 previous paragraphs and 121 current paragraphs.
36 unchanged; 31 reworded; 52 added; 40 removed; 0 previous and 2 current paragraphs rearranged.
Tables are not compared: 6 previous and 7 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 (52)
Current report
changes in the global economic environment, inflation, elevated interest rates, recessions or prolonged periods of slow economic growth, and global instability and actual and threatened geopolitical conflict; and
Current report
For the FCEP segment, global steel manufacturing capacity continues to exceed global consumption of steel products. Demand for steel is soft but stable. Increased entry of low-priced products from other countries has negatively impacted local demand in the U.S. and Europe, with several of the segment’s largest customers engaging in trade cases to reduce the number of imports into the U.S. The U.S. government previously announced new tariffs on steel and aluminum imports to the U.S. and has, for now, removed the exceptions allowing certain countries to send un-tariffed products to the U.S. As of March 31, 2025, tariffs are now incurred on forged and cast rolls shipped from the segment's European facilities into the U.S. and on U.S. forged and cast rolls shipped into China. Since the cast roll market is currently underserved in the U.S., the Corporation believes the segment's European operations are on equal footing with its competition with respect to tariffs. It is expected that the costs associated with tariffs will be passed on to customers. Tariff outcomes are fluid and subject to change. Accordingly, it is difficult to predict how tariffs will affect the ordering patterns of the segment's customers, however, customer deferral of orders is expected.
Current report
The primary focus for the FCEP segment is to improve its profitability by maintaining a strong position in the roll market and continuing to improve operational efficiency and equipment reliability following the completion of a significant capital equipment program. In addition, in February 2025, the segment's U.K. operations entered into a formal consultation process with its unions and staff to evaluate various options to improve its profitability, which continues as of March 31, 2025.
Current report
Net sales approximated $104,265 and $110,215 for the three months ended March 31, 2025 and 2024, respectively, a decrease of $5,950. A discussion of net sales for the Corporation’s two segments is included below.
Current report
Income from operations approximated $3,850 and $82 for the three months ended March 31, 2025 and 2024, respectively, an improvement of $3,768. A discussion of income from operations for the Corporation’s two segments is included below.
Current report
Costs of products sold, excluding depreciation and amortization, as a percentage of net sales, for the three months ended March 31, 2025 and 2024 approximated 78.7% and 83.9%, respectively, with gross margins improving for both the FCEP and ALP segments. See further discussion in the commentary for the Corporation’s two segments below.
Current report
Interest expense for the three months ended March 31, 2025 and 2024 was comparable and approximated $2,726 and $2,757, respectively. More specifically:
Current report
Other income – net fluctuated primarily due to:
Current report
Lower net pension and other postretirement income primarily due to a lower expected long-term rate of return on the assets of U.S. defined benefit pension plan in 2025 versus 2024,
Current report
Changes in unrealized losses and gains in the market value of the Rabbi trust investments corresponding to the volatility in the financial markets.
Current report
The income tax provision for the three months ended March 31, 2025 includes an income tax benefit of approximately $500 resulting from the Corporation's majority-owned Chinese joint venture qualifying as a high-tech enterprise (“HTE”). As an HTE, the earnings of the Chinese joint venture through 2026 will be taxed at a rate of 15% (versus 25%) and, at March 31, 2025, certain net deferred income tax liabilities were revalued at a rate of 15% (versus 25%) thereby reducing deferred income tax liabilities and contributing to the income tax benefit.
Current report
Net income (loss) attributable to Ampco-Pittsburgh and net income (loss) per common share attributable to Ampco-Pittsburgh equaled $1,142 and $0.06 per common share and $(2,717) and $(0.14) per common share for the three months ended March 31, 2025 and 2024, respectively. The income tax benefit resulting from the Corporation's majority-owned Chinese joint venture qualifying as an HTE of approximately $500 improved net income attributable to Ampco-Pittsburgh and net income per common share attributable to Ampco-Pittsburgh by approximately $299 and $0.01 per common share, respectively, for the three months ended March 31, 2025.
Current report
Changes in exchange rates between the periods used to translate net sales of the Corporation’s foreign subsidiaries into the U.S. dollar, which decreased net sales by approximately $1,000 for the three months ended March 31, 2025 when compared to the three months ended March 31, 2024; and
Current report
Lower FEP sales, which decreased net sales by approximately $100 for the three months ended March 31, 2025 when compared to the three months ended March 31, 2024; offset
Current report
Better manufacturing absorption for the current year period, which increased operating income by approximately $500 for the three months ended March 31, 2025, when compared to the three months ended March 31, 2024, primarily as a result of operational efficiencies and improved equipment reliability following completion of a significant capital equipment program by the end of 2024 coupled with lower absorption in the prior year period as a result of a fire at one of the Corporation’s cast roll facilities; offset by
Current report
Higher selling and administrative costs, which decreased operating income by approximately $700 for the three months ended March 31, 2025 when compared to the three months ended March 31, 2024; and
Current report
Changes in exchange rates between the periods used to translate the operating results of the Corporation’s foreign subsidiaries into the U.S. dollar, which reduced income from operations by approximately $100 for the three months ended March 31, 2025 when compared to the three months ended March 31, 2024.
Current report
Backlog decreased at March 31, 2025 from December 31, 2024 by $18,234 primarily due to:
Current report
Lower backlog for mill rolls of approximately $31,700 due to (i) lower demand in Europe as a result of mills operating at a reduced rate, (ii) U.S. customers deferring orders due, in part, to the current geopolitical events with tariffs and uncertainty as to the total cost of a roll, and (iii) timing of orders for the following year; offset by
Current report
Higher exchange rates used to translate the backlog of the Corporation’s foreign subsidiaries into the U.S. dollar, which increased backlog at March 31, 2025 when compared to backlog at December 31, 2024, by approximately $8,200; and
Current report
Improved demand for FEP, which increased backlog at March 31, 2025 when compared to backlog at December 31, 2024 by approximately $5,200.
Current report
The decrease in net sales for the three months ended March 31, 2025, when compared to the same period of the prior year period, is primarily due to:
Current report
Lower net sales of air handling units principally due to the timing of shipments and associated revenue recognition, which reduced net sales by approximately $1,900 for the three months ended March 31, 2025 when compared to the three months ended March 31, 2024; offset by
Current report
Higher net sales of heat exchange coils principally due to an increase in the volume of shipments to nuclear-power customers, which increased net sales by approximately $700 for the three months ended March 31, 2025 when compared to the three months ended March 31, 2024; and
Current report
Higher net sales of centrifugal pumps principally due to higher sales to the U.S. Navy after-market and commercial customers, which increased net sales by approximately $100 for the three months ended March 31, 2025 when compared to the three months ended March 31, 2024.
Current report
The improvement in operating income is principally due to changes in product mix, offset in part by the lower volume of shipments and higher manufacturing costs, which had a net benefit to operating income of approximately $1,500 for the three months ended March 31, 2025 when compared to the three months ended March 31, 2024.
Current report
Backlog at March 31, 2025 improved when compared to backlog December 31, 2024 by approximately $7,800 with each of the product lines improving. In particular, backlog for:
Current report
Heat exchange coils increased approximately $4,500 primarily due to record order intake in the nuclear market;
Current report
Centrifugal pumps increased approximately $1,900 primarily due to strong order activity in the U.S. Navy market; and
Current report
Air handling units increased approximately $1,400 primarily due to strong order activity in the pharmaceutical market.
Current report
The Corporation presents non-GAAP adjusted EBITDA and non-GAAP adjusted income (loss) from operations. Non-GAAP adjusted EBITDA is calculated as net income (loss) excluding interest expense, other income - net, income tax provision, depreciation and amortization, and stock-based compensation along with significant charges or credits that are one-time charges or credits, unrelated to the Corporation’s ongoing results of operations, or beyond its control. Non-GAAP adjusted income (loss) from operations is calculated as income (loss) from operations excluding depreciation and amortization and stock-based compensation along with significant charges or credits that are one-time charges or credits, unrelated to the segment’s ongoing results of operations, or beyond its control. These non-GAAP financial measures are not based on any standardized methodology prescribed by accounting principles generally accepted in the United States of America (“GAAP”).
Current report
Beginning in 2025, the Corporation began presenting non-GAAP adjusted EBITDA along with non-GAAP adjusted income (loss) from operations. These measures are key measures used by the Corporation's management and Board of Directors to understand and evaluate the operating performance of the Corporation and its segments. While these non-GAAP measures may not be directly comparable to similarly titled measures presented by other companies, the Corporation's management and Board of Directors believe these non-GAAP measures enhance comparability to companies in its stated industry peer group.
Current report
The following is a reconciliation of net income (loss) to non-GAAP adjusted EBITDA for the three months ended March 31, 2025 and 2024, respectively:
Current report
Corporate represents the operating expenses of the corporate office and other costs not allocated to the segments.
Current report
Net cash flows (used in) provided by operating activities equaled $(5,280) and $4,535 for the three months ended March 31, 2025 and 2024, respectively, a change of $(9,815) primarily due to:
Current report
Higher investment in trade working capital of approximately $12,700; and
Current report
Higher contributions to the U.S. defined benefit pension plan of approximately $796; offset by
Current report
Net income of $1,891 for the three months ended March 31, 2025 versus a net loss of $2,206 for the three months ended March 31, 2024; and
Current report
Lower net asbestos-related payments of $1,254 for the three months ended March 31, 2025 versus the three months ended March 31, 2024.
Current report
Trade receivables at March 31, 2025 increased by approximately $11,900 when compared to trade receivables at December 31, 2024 primarily due to:
Showing the first 40 of 52 passages. Open the source sections for the rest.
Removed paragraphs (40)
Previous report
limitations in availability of capital to fund our strategic plan;
Previous report
inability to execute our capital expenditure plan;
Previous report
For the FCEP segment, demand for steel in the segment’s two largest markets, North America and Europe, has been flat when compared to the prior year, resulting in customers operating with lower overall roll inventories and placing orders for new rolls on an as-needed basis. Order intake has begun to show signs of improvement with shipments expecting to increase for the segment’s cast roll facilities in early 2025 and the segment’s forge roll facilities by mid-2025. Pricing has been stable and market share has increased, compared to a year ago, which is expected to improve the segment’s overall utilization in 2025 when compared to 2024. European steel producers, however, continue to operate at lower levels compared to pre-pandemic levels as Europe continues to experience economic uncertainty. Additionally, increased entry of low-priced products from other countries has negatively impacted local demand both in Europe and the U.S. with several of the segment’s largest customers engaging in trade cases to reduce the number of imports into the U.S. The FEP market remains challenged by low activity among bar distribution customers, improved block utilization, and lower activity among the segment’s block customers. The primary focus for the FCEP segment is to maintain a strong position in the roll market and to continue to improve operational efficiency and equipment reliability resulting from the completion of the previously announced capital program.
Previous report
Net sales approximated $96,166 and $102,218 for the three months ended September 30, 2024 and 2023, respectively, and $317,369 and $314,232 for the nine months ended September 30, 2024 and 2023, respectively. The decrease for the three months ended September 30, 2024, when compared to September 30, 2023, is attributable to lower sales for the FCEP segment while the increase for the nine months ended September 30, 2024, when compared to September 30, 2023, is attributable to higher sales for the ALP segment. A discussion of net sales for the Corporation’s two segments is included below.
Previous report
Income from operations approximated $1,870 and $1,722 for the three months ended September 30, 2024 and 2023, respectively, and $6,995 and $7,003 for the nine months ended September 30, 2024 and 2023, respectively. Included in operating income for the three and nine months ended September 30, 2023 is a credit of approximately $191 for proceeds received from an insolvent asbestos-related insurance carrier (the “Asbestos-Related Credit”) and, for the nine months ended September 30, 2023, 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 report
Costs of products sold, excluding depreciation and amortization, as a percentage of net sales, for the three months ended September 30, 2024 and 2023 approximated 79.4% and 82.7%, respectively, and for the nine months ended September 30, 2024 and 2023 approximated 80.8% and 81.6%, respectively, due principally to improved margins for the FCEP segment. For the ALP segment, costs of products sold, excluding depreciation and amortization, were comparable for the three months ended September 30, 2024 when compared to the same period of the prior year, but increased for the nine months ended September 30, 2024 when compared to the same period of the prior year primarily due to product mix and shipment of older lower-margin orders for centrifugal pumps.
Previous report
Credit for asbestos litigation of $191 in 2023 represents a credit for proceeds received from an insolvent asbestos-related insurance carrier.
Previous report
Investment-related income relates primarily to dividends from one of the Corporation’s Chinese joint ventures. In the third quarter of 2024 and 2023, the Chinese joint venture declared dividends totaling $62 and $92 for the Corporation, respectively.
Previous report
Interest expense approximated $2,976 and $2,468 for the three months ended September 30, 2024 and 2023, respectively, and $8,750 and $6,784, for the nine months ended September 30, 2024 and 2023, respectively. When compared to the same periods of the prior year, the increase is principally due to:
Previous report
Interest on the sale and leaseback financing transactions, including interest on the proceeds received from the Disbursement Agreement in June 2023, which was comparable for the three months ended September 30, 2024 and 2023 but higher by approximately $158 for the nine months ended September 30, 2024 when compared to the nine months ended September 30, 2023.
Previous 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 being established against the net deferred income tax assets of the U.K. operations. As of September 30, 2024, the U.K. operations remain in a three-year cumulative loss position. Accordingly, the income tax provision for the three and nine months ended September 30, 2024 does not include any income tax benefit for the net operating losses of the U.K. operations. By comparison, the income tax provision for the three and nine months ended September 30, 2023, which is prior to establishing the valuation allowance, includes an income tax benefit for the operating losses of the U.K. operations of $636 and $1,177 for the three and nine months ended September 30, 2023, respectively.
Previous report
Net (loss) income attributable to Ampco-Pittsburgh and net (loss) income per common share attributable to Ampco-Pittsburgh equaled $(1,959) and $(0.10) per common share and $809 and $0.04 per common share for the three months ended September 30, 2024 and 2023, respectively, and $(2,664) and $(0.13) per common share and $1,908 and $0.10 per common share for the nine months ended September 30, 2024 and 2023, respectively.
Previous report
Net income attributable to Ampco-Pittsburgh and net income per common share attributable to Ampco-Pittsburgh for the three months ended September 30, 2023 include an after-tax benefit of $185 or $0.01 per common share associated with the Asbestos-Related Credit.
Previous report
Net income attributable to Ampco-Pittsburgh and net income per common share attributable to Ampco-Pittsburgh for the nine months ended September 30, 2023 include an after-tax benefit of $2,059 or $0.11 per common share associated with the Asbestos-Related Credit and the Foreign Energy Credit.
Previous report
Lower volume of FEP shipments, which decreased net sales by approximately $1,800 and $3,800 for the three and nine months ended September 30, 2024, respectively; and
Previous report
Increases in exchange rates between the periods which increased net sales by approximately $900 and $1,000 for the three and nine months ended September 30, 2024, respectively.
Previous report
Improved manufacturing absorption, net of the impact associated with a fire at one of the Corporation’s cast roll facilities in the first quarter of 2024, which increased operating income by approximately $1,900 and $400 for the three and nine months ended September 30, 2024, respectively; offset by
Previous report
Changes in selling and administrative costs associated primarily with changes in employee-related costs, which reduced income from operations by approximately $500 for the three months ended September 30, 2024, however, selling and administrative costs for the nine months ended September 30, 2024 remain below the same costs for the same period of the prior year by approximately $200;
Previous report
Foreign Energy Credit of $1,874 received in the prior year which benefited operating income for the nine months ended September 30, 2023;
Previous report
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 nine months ended September 30, 2024; and
Previous report
Net increase in certain exchange rates, which increased the losses of certain of the Corporation's foreign operations and reduced income from operations by approximately $100 and $200 for the three and nine months ended September 30, 2024, respectively.
Previous report
Net sales for the three and nine months ended September 30, 2024 improved over the comparable prior year periods. Net sales of air handling units for the third quarter of 2024 were slightly less than net sales for the comparable prior year period primarily due to timing of shipments and associated revenue recognition. Net sales of air handling systems for the nine months ended September 30, 2024 exceeded the comparable prior year period due to higher order intake as a result of 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 nine months ended September 30, 2024 improved when compared to net sales for the three and nine months ended September 30, 2023 primarily as a result of higher net sales to original equipment manufacturers and power generation customers. Net sales of centrifugal pumps for the three and nine months ended September 30, 2024 exceeded the comparable prior year periods principally due to a higher volume of shipments to commercial customers.
Previous report
Operating income decreased for each of the current year periods, when compared to the same periods of the prior year, principally due to:
Previous report
Higher selling and administrative costs of approximately $300 and $1,300 for the three and nine months ended September 30, 2024, respectively, primarily as a result of higher commissions associated primarily with the increase in sales and employee-related costs including costs associated with expansion of the segment’s sales distribution network;
Previous report
Asbestos-Related Credit of $191 received in the prior year which benefited operating income for the three and nine months ended September 30, 2023;
Previous report
Full-year lease costs associated with the additional manufacturing facility which reduced operating income by approximately $100 for the nine months ended September 30, 2024; and
Previous report
Higher depreciation costs of approximately $100 for the three and nine months ended September 30, 2024 associated with the capital investment at the additional manufacturing facility; offset by
Previous report
Higher volume of shipments, net of changes in product mix and manufacturing costs, which increased operating income by approximately $300 and $600 for the three and nine months ended September 30, 2024; respectively.
Previous report
Backlog at September 30, 2024 and December 31, 2023 was comparable. Backlog for centrifugal pumps improved from year-end 2023 by approximately $4,600 due to improved order intake while backlog for air handling units decreased from year-end 2023 by approximately $4,600 due to the strong sales and lower order activity as a result of the manufacturing facilities being at capacity. Backlog for heat exchangers at September 30, 2024 was modestly higher versus December 31, 2023. At September 30, 2024, approximately 77% of backlog is expected to ship after 2024.
Previous report
The Corporation presents non-GAAP adjusted income from operations which is calculated as income from operations excluding the Asbestos-Related Credit for the three and nine months ended September 30, 2023 and the Foreign Energy Credit for the nine months ended September 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.
Previous report
The adjustments reflected in adjusted income from operations are pre-tax. The tax impact associated with these adjustments is not significant due to the Corporation having a valuation allowance recorded against the deferred income tax assets for the jurisdictions where the income is recognized.
Previous report
(1) Represents proceeds received from an insolvent asbestos-related insurance carrier.
Previous report
(2) Represents reimbursement of past energy costs at one of the Corporation’s foreign operations by its local government.
Previous report
Net cash flows provided by (used in) operating activities equaled $10,576 and $(10,327) for the nine months ended September 30, 2024 and 2023, respectively. The change in net cash flows provided by operating activities for the nine months ended September 30, 2024 when compared to the nine months ended September 30, 2023 primarily is due to a lower investment in trade working capital. In addition, net cash flows provided by (used in) operating activities includes:
Previous 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;
Previous report
Higher contributions to U.S. defined benefit pension plans of approximately $4,434 for the nine months ended September 30, 2024 in comparison to the nine months ended September 30, 2023; and
Previous report
Proceeds from the Foreign Energy Credit of approximately $1,874 received in the second quarter of 2023.
Previous report
Lower net borrowings from the Corporation’s revolving credit facility of $11,288;
Previous report
Lower proceeds from sale and leaseback financing arrangements of $2,500;
Previous report
Higher principal payments of $1,181 primarily due to the commencement of payments on the equipment financing Term Notes; and
Reworded paragraphs (31)
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, 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:
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 Operationsand 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, tariffs and global trade, 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
inability to obtain necessary capital or financing on satisfactory terms to support our growth strategy;
Current wording
inability to obtain necessary capital or financing on satisfactory terms to acquire capital expenditures that may be necessary to support our growth strategy;
Previous wording
failure to maintain an effective system of internal control; and
Current wording
failure to maintain an effective system of internal control;
Previous wording
The FCEP segment produces forged hardened steel rolls, cast rolls and forged engineered products (“FEP”). Forged hardened steel rolls are used primarily in 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 and cold strip mills, medium/heavy section 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 an equity interest in three joint venture companies in China. Collectively, the segment primarily competes with European, Asian and North and South American companies in both domestic and foreign markets and distributes a significant portion of its products through sales offices located throughout the world.
Current wording
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 an equity interest in three joint venture companies in China. Collectively, the segment primarily competes with European, Asian and North and South American companies in both domestic and foreign markets and distributes a significant portion of its products through sales offices located throughout the world.
Previous wording
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 original equipment manufacturers, 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.
Current wording
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 original equipment manufacturers and 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.
Previous wording
For the ALP segment, businesses are benefiting from steady demand and increased market share but are facing increasing production costs and supply chain issues as a result of the lingering effects from a post-pandemic environment. The segment has been implementing price increases for certain of its products to help mitigate these inflationary effects. The focus for this segment is to grow revenues, strengthen engineering and manufacturing capabilities to keep pace with growth opportunities and continue to improve its sales distribution network.
Current wording
For the ALP segment, businesses are benefiting from steady demand and increased market share but continue to face increasing production costs due to inflation. The segment has been implementing price increases for certain of its products to help mitigate these inflationary effects. The focus for this segment is to grow revenues, strengthen engineering and manufacturing capabilities to keep pace with growth opportunities, and continue to improve its sales distribution network. As of March 31, 2025, tariffs are now incurred on certain of the segment's raw materials. It is expected that the costs associated with these tariffs will be passed on to customers. Tariff outcomes are fluid and subject to change; however, the U.S.'s onshoring of additional manufacturing capabilities would potentially increase demand for the segment's products.
Previous wording
The Corporation is actively monitoring, and will continue to actively monitor, the lingering effects from a post-pandemic environment, repercussions from the Russia-Ukraine and Middle East conflicts and similar geopolitical matters, economic conditions, and other developments relevant to its business including the potential impact on its operations, financial condition, liquidity, suppliers, industry, and workforce.
Current wording
The Corporation is actively monitoring, and will continue to actively monitor, changes prompted by the U.S. government, repercussions from the Russia-Ukraine and Middle East conflicts and similar geopolitical matters, economic conditions, and other developments relevant to its business including the potential impact on its operations, financial condition, liquidity, suppliers, industry, and workforce.
Previous wording
Backlog equaled $383,550 as of September 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 71% of the backlog is expected to be released after 2024. A discussion of backlog by segment is included below.
Current wording
Backlog equaled $368,453 as of March 31, 2025 versus $378,884 as of December 31, 2024. 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 20% of the backlog is expected to be released after 2025. A discussion of backlog by segment is included below.
Previous wording
Selling and administrative expenses approximated $13,332 and $11,821 for the three months ended September 30, 2024 and 2023, respectively, and $39,855 and $38,101 for the nine months ended September 30, 2024 and 2023, respectively. The increase in selling and administrative expenses for the current year periods is primarily due to higher employee-related costs, professional fees and an increase in exchange rates used to translate selling and administrative expenses of the Corporation’s foreign subsidiaries into the U.S. dollar.
Current wording
Selling and administrative expenses approximated $13,659 and $12,973 for the three months ended March 31, 2025 and 2024, respectively. The increase in selling and administrative expenses for the current year period when compared to the same period of the prior year is primarily due to inflationary increases, higher employee-related costs and professional fees.
Previous wording
Higher average interest rates for 2024 versus 2023, which increased interest expense by approximately $47 and $312 for the three and nine months ended September 30, 2024, respectively; and
Current wording
Lower average interest rates for 2025 versus 2024 decreased interest expense by approximately $200 for the three months ended March 31, 2025; and
Previous wording
Higher average borrowings outstanding under the revolving credit facility, which increased interest expense by approximately $182 and $602 for the three and nine months ended September 30, 2024, respectively;
Current wording
Lower average borrowings outstanding under the revolving credit facility decreased interest expense by approximately $159 for the three months ended March 31, 2025; offset by
Previous wording
Higher interest on the equipment financing facility, net of capitalized interest, of approximately $279 and $894 for the three and nine months ended September 30, 2024, respectively;
Current wording
Higher average borrowings under the equipment financing facility, net of capitalized interest, increased interest expense by approximately $353 for the three months ended March 31, 2025.
Previous wording
Other income – net fluctuated period over period principally due to changes in foreign exchange gains and losses.
Current wording
Changes in foreign exchange gains and losses, and
Previous wording
The change in net sales for the three and nine months ended September 30, 2024, when compared to the same periods of the prior year, is primarily due to the following:
Current wording
The decline in net sales for the three months ended March 31, 2025, when compared to the same period of the prior year, is primarily due to the following:
Previous wording
Lower volume and changes in product mix for roll sales, which decreased net sales by approximately $4,100 and $5,900 for the three and nine months ended September 30, 2024, respectively;
Current wording
Lower volume and changes in product mix for roll sales, which decreased net sales by approximately $6,300 for the three months ended March 31, 2025 when compared to the three months ended March 31, 2024;
Previous wording
Lower variable-index surcharges passed through to customers as a result of lower prices for raw material, energy and transportation, net of higher base pricing, which reduced net sales by approximately $1,400 for the three months ended September 30, 2024, reducing the year-to-date benefit of improved pricing, net of variable index surcharges, to approximately $800 for the nine months ended September 30, 2024 when compared to the same period of the prior year; offset by
Current wording
Higher base pricing, net of lower variable-index surcharges passed through to customers as a result of lower prices for raw material, energy and transportation, which increased net sales by approximately $2,500 for the three months ended March 31, 2025 when compared to the three months ended March 31, 2024.
Previous wording
Income from operations for the three and nine months ended September 30, 2024 increased when compared to the three and nine months ended September 30, 2023 primarily due to:
Current wording
Income from operations for the three months ended March 31, 2025 increased when compared to the three months ended March 31, 2024 primarily due to:
Previous wording
Benefit from improved pricing and changes in manufacturing costs, net of lower variable-index surcharges, which increased income from operations by approximately $2,000 and $6,600 for the three and nine months ended September 30, 2024, respectively, and
Current wording
Benefit from improved pricing and changes in manufacturing costs, net of lower variable-index surcharges, which increased income from operations by approximately $5,200 for the three months ended March 31, 2025 when compared to the three months ended March 31, 2024; and
Previous wording
Lower volume of shipments, which decreased operating income by approximately $2,300 and $3,200 for the three and nine months ended September 30, 2024, respectively;
Current wording
Lower volume of shipments, which decreased operating income by approximately $2,600 for the three months ended March 31, 2025 when compared to the three months ended March 31, 2024;
Previous wording
Backlog increased at September 30, 2024 from December 31, 2023 by $4,535 due to an increase in backlog for mill roll orders of approximately $3,800 and higher exchange rates used to translate the backlog of the Corporation’s foreign subsidies into the U.S. dollar which increased backlog by approximately $770. The backlog for FEP was comparable at September 30, 2024 and December 31, 2023. At September 30, 2024, approximately 68% of backlog is expected to ship after 2024.
Current wording
At March 31, 2025, approximately 14% of backlog is expected to ship after 2025.
Previous wording
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 Asbestos-Related Credit and 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 wording
The Corporation believes these non-GAAP financial measures help identify underlying trends in its business that otherwise could be masked by the effect of the items it excludes from adjusted EBITDA and adjusted income (loss) from operations. The Corporation also believes these non-GAAP financial measures provide 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.
Previous wording
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 Asbestos-Related Credit and the Foreign Energy Credit will not occur in future periods.
Current wording
Non-GAAP adjusted EBITDA and non-GAAP adjusted income (loss) from operations are 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 non-GAAP adjusted EBITDA, rather than net income (loss), or non-GAAP adjusted income (loss) from operations, rather than income (loss) from operations, which are the nearest GAAP equivalents.
Previous wording
The following is a reconciliation of income from operations to non-GAAP adjusted income from operations for the three and nine months ended September 30, 2024 and 2023, respectively:
Current wording
The following is a reconciliation of income (loss) from operations to non-GAAP adjusted income (loss) from operations for the three months ended March 31, 2025 and 2024, respectively:
Previous wording
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
Asbestos-related payments are expected to continue in the foreseeable future. The amount of asbestos-related payments and corresponding insurance recoveries are 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.
Previous wording
Net cash flows used in investing activities equaled $(6,657) and $(13,515) for the nine months ended September 30, 2024 and 2023, respectively, and include primarily 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 September 30, 2024, the Corporation received approximately $1,300 in government incentives to help offset the cost of such key machinery. To date, no repayment obligations exist for any government incentives received. At September 30, 2024, commitments for future capital expenditures approximated $6,000 which is expected to be spent over the next 12-18 months.
Current wording
Higher capital spend of approximately $500 by the ALP segment. Certain of this capital spend may be able to be subsidized by various government incentives such as grants. For the three months ended March 31, 2025, the Corporation received approximately $323 in government incentives. To date, no repayment obligations exist for any government incentive received.
Previous wording
Net cash flows provided by financing activities equaled $557 and $21,323 for the nine months ended September 30, 2024 and 2023, respectively, a decrease of $20,766 primarily due to:
Current wording
Net cash flows (used in) provided by financing activities equaled $(1,727) and $2,028 for the three months ended March 31, 2025 and 2024, respectively, a change of $(3,755) which is primarily due to:
Previous wording
Lower proceeds from the equipment financing facility of $5,130;
Current wording
No proceeds from the equipment financing facility in the current year, due to the completion of a significant capital equipment program during the second quarter of 2024, whereas the prior year included proceeds from the equipment financing facility of $1,134; and
Previous wording
Changes in borrowings and repayment of related-party debt, which reduced net cash flows provided by financing activities by $667.
Current wording
Prior year repayment of related-party debt of $664.
Previous wording
As a result of the above, cash and cash equivalents increased by $4,558 during 2024 and ended the period at $11,844 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 decreased by $8,298 during 2025 and ended the period at $7,129 in comparison to $15,427 at December 31, 2024. The majority of the Corporation’s cash and cash equivalents is held by its foreign operations. Domestic customer remittances are used to repay 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 September 30, 2024, remaining availability under the revolving credit facility approximated $20,507, 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.
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, debt service costs and capital expenditures. As of March 31, 2025, remaining availability under the revolving credit facility approximated $28,586, net of standard availability reserves. 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. Similarly, decreases in the underlying benchmark rates will decrease the Corporation’s debt service costs.
Previous wording
While the Corporation anticipates it has sufficient liquidity to finance the Corporation’s operational requirements, debt service costs and capital expenditures, it may from time to time consider alternatives, potential transactions and other strategies in an attempt to enhance its liquidity. Given such measures are forward looking, the Corporation cannot ensure it would be successful in achieving such enhancements or be able to improve its liquidity.
Current wording
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. However, the Corporation is currently in discussions with its lenders with the intent of securing a mutually beneficial arrangement covering multiple years prior to June 30, 2025. Additionally, while the Corporation anticipates it has sufficient liquidity to finance the Corporation’s operational requirements, debt service costs and capital expenditures, it may from time to time consider alternatives, potential transactions and other strategies in an attempt to enhance its liquidity. Given such measures are forward-looking, the Corporation cannot ensure it will be successful in renegotiating its revolving credit facility or achieving such enhancements to improve its liquidity.
Rearranged current paragraphs (2)
Current report — wording carried from elsewhere
At March 31, 2025, approximately 31% of backlog is expected to ship after 2025.
Current report — wording carried from elsewhere
At March 31, 2025, commitments for future capital expenditures approximated $5,200 which are expected to be spent over the next 12-18 months.