AMPCO PITTSBURGH CORP

Overview of the Business

Ampco-Pittsburgh Corporation (the “Corporation”) manufactures and sells highly engineered, high-performance specialty metal products and customized equipment utilized by industry throughout the world. It operates intwo business segments – the Forged and Cast Engineered Products (“FCEP”) segment and the Air and Liquid Processing (“ALP”) segment. This segment presentation is consistent with how the Corporation’s chief operating decision-maker (“CODM”) evaluates financial performance and makes resource allocation and strategic decisions about the business (Note 19).

Note 1 – Unaudited Condensed Consolidated Financial Statements

The unaudited condensed consolidated balance sheet as of June 30, 2025 and the unaudited condensed consolidated statements of operations, comprehensive (loss) income and shareholders’ equity for the three and six months ended June 30, 2025 and 2024, and cash flows for the six months ended June 30, 2025 and 2024, have been prepared by the Corporation. In the opinion of management, all adjustments, consisting of only normal and recurring adjustments necessary to present fairly the financial position, results of operations and cash flows for the periods presented, have been made. The results of operations for the three and six months ended June 30, 2025 are not necessarily indicative of the operating results expected for the full year.

Certain information and footnote disclosures normally included in the annual financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) have been condensed or omitted. These unaudited condensed consolidated financial statements should be read in conjunction with the Corporation’s latest Annual Report on Form 10-K.

Recently Issued Accounting Pronouncements

In November 2024, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2024-03, Income Statement - Disaggregation of Income Statement Expenses. The guidance requires tabular disclosure of certain expenses included in costs of products sold and selling and administrative expenses, such as purchases of inventory and employee compensation, and qualitative description of certain other costs. The guidance becomes effective for the Corporation’s annual period beginning January 1, 2027 and interim periods beginning January 1, 2028. The Corporation is currently evaluating the impact this new standard will have on its annual disclosures in its consolidated financial statements for the year ending December 31, 2027 and interim disclosures thereafter. It will not, however, impact the Corporation’s consolidated financial position, results of operations or cash flows.

In December 2023, the FASB issued ASU 2023-09, Income Taxes - Improvements to Income Tax Disclosures. The guidance requires annual disclosure of specific categories of information within the effective tax rate reconciliation, and income taxes paid and income tax expense disaggregated by jurisdiction. The guidance became effective for the Corporation’s annual period beginning January 1, 2025. The Corporation is currently evaluating the impact this new standard will have on its annual disclosures. It will not, however, impact the Corporation’s consolidated financial position, results of operations or cash flows.

Note 2 -Severance Charge and Other Exit Costs

In February 2025, Union Electric Steel UK Limited (“UES-UK”), an indirect subsidiary of the Corporation, entered into a formal consultation process with its unions and staff to evaluate various options to improve its profitability, which it completed during the second quarter of 2025. The U.K. operations have been impacted by unpredictable and high energy costs compared to its foreign competitors, lower demand for its products manufactured in the U.K., and increased imports of rolls and flat rolled steel into Europe from low-cost countries. In light of UES-UK's historical performance and management's outlook for the remainder of 2025 and subsequent years, UES-UK has decided to exit its operations. While UES-UK continues to review its restructuring alternatives, it is currently expected it will complete its orders in backlog and will cease foundry operations at the end of 2025 and finishing operations in the spring of 2026. As of the date of this filing, no decision has been made by the Board of Directors of UES-UK as to the method to liquidate and dissolve its operations.

For the three and six months ended June 30, 2025, the Corporation recognized costs and accelerated depreciation approximating $6,750. A summary of cash and non-cash charges included in the condensed consolidated statement of operations for the three and six months ended June 30, 2025 is as follows:

The charge for employee-related costs represents primarily statutory severance and other benefits payable to the 168 employees of UES-UK under existing benefit plans. Additional benefits may be earned by the employees as additional services are rendered, which will be accrued as earned and could range between $500 - $600.

Accelerated depreciation represents higher depreciation expense resulting from reducing the estimated remaining useful lives and revising the estimated residual value of the property, plant and equipment of UES-UK (Note 5). UES-UK will continue to evaluate the future alternative uses of its property, plant and equipment, including estimated salvage value, highest and best use of the land and building, and costs to ready the site for disposal or sale. Accordingly, additional charges may occur in the future.

Professional fees and other non-cash charges approximated $132 and $110, respectively, for the three and six months ended June 30, 2025. Similar costs and charges may be incurred through the completion of its restructuring, which will be recognized when incurred.

Outstanding severance charges equaled $5,922 as of June 30, 2025, of which $5,074 is recorded as a current liability (accrued payrolls and employee benefits) and $848 is recorded as a noncurrent liability (other noncurrent liabilities) on the condensed consolidated balance sheet as of June 30, 2025. Activity during the three and six months ended June 30, 2025 consisted of the following:

Note 3 – Inven tories

At June 30, 2025 and December 31, 2024, substantially all inventories were valued using the first-in, first-out method. Inventories were comprised of the following:

Note 4 – Contract Assets

Changes in contract assets were comprised of the following: