AMPCO PITTSBURGH CORP

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 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:

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, the continued impact of tariffs, global trade conditions, 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 maintain adequate liquidity to meet our operating cash flow requirements, repay maturing debt and meet other financial obligations;

Current wording

inability to maintain adequate liquidity to meet our operating cash flow requirements, repay maturing debt and meet other financial obligations including severance costs associated with our anticipated exit from our operations in the U.K.;

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inability to successfully restructure our operations and/or invest in operations that will yield the best long-term value to our shareholders;

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inability to successfully restructure our operations, exit our U.K. operations, and/or invest in operations that will yield the best long-term value to our shareholders;

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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

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changes in the global economic environment, inflation, the ongoing impact of tariffs, elevated interest rates, recessions or prolonged periods of slow economic growth, and global instability and actual and threatened geopolitical conflict;

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inability to satisfy the continued listing requirements of the New York Stock Exchange or the NYSE American Exchange;

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inability to satisfy the continued listing requirements of the New York Stock Exchange;

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failure to maintain an effective system of internal control;

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failure to maintain an effective system of internal control; and

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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 wording

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 a result, 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. Subject to negotiations with customers, it is expected that the costs associated with tariffs will be passed on to customers. With the recently announced trade deals, tariff rates with many of the segment's largest trading partners have begun to be finalized, however, 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. Customer deferral of orders has occurred and may continue to occur. 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.

Previous 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.

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. Following previous U.S. government actions, 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, 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.

Current wording

The Corporation is actively monitoring, and will continue to actively monitor, changes prompted by the U.S. government, repercussions from the 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

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 wording

Net sales approximated $113,104 and $110,988 for the three months ended June 30, 2025 and 2024, respectively, an improvement of $2,116, and $217,369 and $221,203 for the six months ended June 30, 2025 and 2024, respectively, a decrease of $3,834. A discussion of net sales for the Corporation’s two segments is included below.

Previous 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.

Current wording

Backlog equaled $351,266 as of June 30, 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 37% of the backlog is expected to be released after 2025. 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, 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 wording

Costs of products sold, excluding depreciation and amortization, as a percentage of net sales, for the three months ended June 30, 2025 and 2024 approximated 81.3% and 79.0%, respectively, with the increase primarily being driven by the FCEP segment. Costs of products sold, excluding depreciation and amortization, as a percentage of net sales, for the six months ended June 30, 2025 and 2024 approximated 80.1% and 81.5%, respectively, with both segments contributing to the decrease. Included in costs of products sold, excluding depreciation and amortization, for the three and six months ended June 30, 2025 is the benefit from the Employee-Retention Credits. See further discussion in the below commentary for the Corporation’s two segments.

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Other income – net is comprised of the following:

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Other (expense) income – net is comprised of the following:

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Other income – net fluctuated primarily due to:

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Other (expense) income – net fluctuated primarily due to:

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Changes in foreign exchange gains and losses, and

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Changes in foreign exchange gains and losses;

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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,

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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; and

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Changes in unrealized losses and gains in the market value of the Rabbi trust investments corresponding to the volatility in the financial markets.

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Changes in unrealized losses and gains in the market value of the Rabbi trust investments corresponding to the volatility in the financial markets; offset by

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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 wording

The income tax provisions for 2025 benefited from a lower statutory income tax rate on the earnings of the Corporation's majority-owned Chinese joint venture as a result of the joint venture qualifying as a high-tech enterprise (“HTE”). As a HTE, the earnings of the Chinese joint venture through 2026 will be taxed at a rate of 15% (versus 25%). The effect on the income tax provisions was a benefit of $300 and $800 for the three and six months ended June 30, 2025, respectively, when compared to the income tax provisions for the three and six months ended June 30, 2024.

Previous wording

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 wording

Net (loss) attributable to Ampco-Pittsburgh and net (loss) per common share attributable to Ampco-Pittsburgh equaled $(7,335), or $(0.36) per common share, and $(6,193), or $(0.31) per common share, for the three and six months ended June 30, 2025, respectively, including the U.K. Exit Charge and Employee-Retention Credits. No income tax benefit was able to be recognized for the U.K. Exit Charge since the U.K. operations remained in a three-year cumulative loss position as of June 30, 2025. The U.K. Exit Charge and Employee-Retention Credits impacted net loss attributable to Ampco-Pittsburgh and net loss per common share attributable to Ampco-Pittsburgh by $6,006, or $0.30 per common share, for each of the three and six months ended June 30, 2025. The income tax benefit resulting from the Corporation's majority-owned Chinese joint venture qualifying as an HTE of approximately $500 reduced the net loss attributable to Ampco-Pittsburgh and net loss per common share attributable to Ampco-Pittsburgh by approximately $299, or $0.01 per common share, for the six months ended June 30, 2025.

Previous 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:

Current wording

The change in net sales for the three and six months ended June 30, 2025, when compared to the same periods of the prior year, is primarily due to the following:

Previous 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.

Current wording

Changes in pricing and lower variable-index surcharges passed through to customers as a result of fluctuations in the price of raw materials, energy and transportation costs, which reduced net sales by approximately $1,100 for the three months ended June 30, 2025, when compared to the three months ended June 30, 2024, but increased net sales by approximately $1,300 for the six months ended June 30, 2025, when compared to the six months ended June 30, 2024; and

Previous wording

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 wording

Changes in exchange rates used to translate net sales of the segment’s foreign subsidiaries into the U.S. dollar, which increased net sales for the three and six months ended June 30, 2025, when compared to the same periods of 2024, by approximately $2,200 and $1,200, respectively.

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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

Current wording

Changes in pricing and lower variable-index surcharges net of changes in manufacturing costs, which reduced operating results by approximately $1,400 for the three months ended June 30, 3025, versus the three months ended June 30, 2024, but improved operating results by approximately $3,800 for the six months ended June 30, 2025, when compared to the six months ended June 30, 2024;

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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;

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Lower volume of roll shipments, offset by a higher volume of FEP shipments, which decreased operating results by $300 and $2,900 for the three and six months ended June 30, 2025, respectively, when compared to the three and six months ended June 30, 2024; and

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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 wording

Changes in exchange rates used to translate the operating results of the segment’s foreign subsidiaries into the U.S. dollar, which improved operating results by approximately $200 and $100 for the three and six months ended June 30, 2025, respectively, when compared to the same periods of 2024.

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Backlog decreased at March 31, 2025 from December 31, 2024 by $18,234 primarily due to:

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Backlog decreased at June 30, 2025 from December 31, 2024 by $38,101 primarily due to:

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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 wording

Lower backlog for mill rolls of approximately $54,300 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 resulting in uncertainty as to the total cost of a roll, (iii) timing of orders for the following year, and (iv) lower orders for UES-UK resulting from the anticipated exit of UES-UK; offset by

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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 wording

Higher exchange rates used to translate the backlog of the Corporation’s foreign subsidiaries into the U.S. dollar, which increased backlog at June 30, 2025 when compared to backlog at December 31, 2024, by approximately $14,300; and

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Improved demand for FEP, which increased backlog at March 31, 2025 when compared to backlog at December 31, 2024 by approximately $5,200.

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Improved demand for FEP, which increased backlog at June 30, 2025 when compared to backlog at December 31, 2024 by approximately $1,900.

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At March 31, 2025, approximately 14% of backlog is expected to ship after 2025.

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At June 30, 2025, approximately 32% of backlog is expected to ship after 2025.

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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:

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The decrease in net sales for the three and six months ended June 30, 2025, when compared to the same periods of the prior year, is primarily due to:

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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 wording

Lower net sales of air handling units principally due to the timing of shipments and associated revenue recognition.

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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 wording

Lower net sales of heat exchange coils principally due to:

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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 wording

Higher net sales of centrifugal pumps principally due to:

Previous wording

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 wording

Changes in product mix, offset in part by the net lower volume of shipments and higher manufacturing costs, which had a net benefit to operating income of approximately $300 and $1,800 for the three and six months ended June 30, 2025, respectively, when compared to the three and six months ended June 30, 2024;

Previous wording

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 wording

Backlog at June 30, 2025 improved when compared to backlog December 31, 2024 by approximately $10,483 with each of the product lines improving. In particular, backlog for:

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Centrifugal pumps increased approximately $1,900 primarily due to strong order activity in the U.S. Navy market; and

Current wording

Centrifugal pumps increased approximately $5,172 primarily due to strong order activity in the U.S. Navy market;

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Air handling units increased approximately $1,400 primarily due to strong order activity in the pharmaceutical market.

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Air handling units increased approximately $4,044 primarily due to strong order activity in the pharmaceutical market; and

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Heat exchange coils increased approximately $4,500 primarily due to record order intake in the nuclear market;

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Heat exchange coils increased approximately $1,267 primarily due to record order intake in the nuclear market.

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At March 31, 2025, approximately 31% of backlog is expected to ship after 2025.

Current wording

At June 30, 2025, approximately 45% of backlog is expected to ship after 2025.