NYSE:AP Ampco-Pittsburgh Q1 2024 Earnings Report $1.96 -0.08 (-3.68%) Closing price 04/25/2025 03:58 PM EasternExtended Trading$1.97 +0.00 (+0.25%) As of 04/25/2025 05:46 PM Eastern Extended trading is trading that happens on electronic markets outside of regular trading hours. This is a fair market value extended hours price provided by Polygon.io. Learn more. Earnings History Ampco-Pittsburgh EPS ResultsActual EPS-$0.14Consensus EPS N/ABeat/MissN/AOne Year Ago EPSN/AAmpco-Pittsburgh Revenue ResultsActual Revenue$110.22 millionExpected RevenueN/ABeat/MissN/AYoY Revenue GrowthN/AAmpco-Pittsburgh Announcement DetailsQuarterQ1 2024Date5/13/2024TimeN/AConference Call DateTuesday, May 14, 2024Conference Call Time10:30AM ETUpcoming EarningsAmpco-Pittsburgh's Q1 2025 earnings is scheduled for Monday, May 12, 2025, with a conference call scheduled on Tuesday, May 13, 2025 at 10:30 AM ET. Check back for transcripts, audio, and key financial metrics as they become available.Conference Call ResourcesConference Call AudioConference Call TranscriptPress Release (8-K)Quarterly Report (10-Q)Earnings HistoryCompany ProfilePowered by Ampco-Pittsburgh Q1 2024 Earnings Call TranscriptProvided by QuartrMay 14, 2024 ShareLink copied to clipboard.There are 8 speakers on the call. Operator00:00:00Welcome to the Ampco Pittsburgh Corporation First Quarter 20 24 Earnings Results Conference Call. All participants will be in listen only mode. After today's presentation, there will be an opportunity to ask questions. Please note this event is being recorded. I'd now like to turn the conference over to Kim Knox, Corporate Secretary. Operator00:00:36Please go ahead. Speaker 100:00:38Thank you, Nick, and good morning to everyone joining us on today's Q1 2024 conference call. Joining me today are Brett McBrayer, our Chief Executive Officer and Mike McAuley, Senior Vice President, Chief Financial Officer and Treasurer. Also joining us on the call today are Sam Lyon, President of Union Electric Steel Corporation and Dave Anderson, President of Air and Liquid Systems Corporation. Before we begin, I would like to remind everyone that participants on this call may make statements or comments that are forward looking and may include financial projections or other statements of the corporation's plans, objectives, expectations or intentions. These matters involve certain risks and uncertainties, many of which are outside the corporation's control. Speaker 100:01:26The corporation's actual results may differ significantly from those projected or suggested in any forward looking statements due to various risk factors, including those discussed in the corporation's most recently filed Form 10 ks and in subsequent filings with the Securities and Exchange Commission. We do not undertake any obligation to update or otherwise release publicly any revision to our forward looking statements. A replay of this call will be posted on our website. To access the earnings release or webcast replay, please consult the Investors section of our website at amcopgh.com. With that, I'd like to turn the call over to Brett McBrayer, Ampco Pittsburgh's CEO. Speaker 100:02:11Brett? Speaker 200:02:11Thank you, Kim. Good morning and thank you for joining our call. As reported in our press release, net sales finished the Q1 of 2024 at $110,200,000 up over 5% compared to the Q1 2023. Income from operations for the quarter was $100,000 versus $2,000,000 when compared to the Q1 of 2023. Significantly impacting our quarter's performance was plant downtime due to a fire in one of our foreign cast roll facilities and the associated repair expense, as well as an unfavorable product mix in our Air and Liquid Processing segment. Speaker 200:02:53These headwinds are behind us as we have moved into the Q2. For further comments on our performance, I will now turn the call over to Sam Lyon, President of our Forged and Cash Engineered Products segment. Speaker 300:03:05Thank you, Brett, and good morning. In our Forged Cast and Engineered Products segment, the market conditions have been muted. In 2024, the rural market will be lower overall with significant reductions in Europe. This reduction occurred as the anticipated recovery was slower than forecasted, resulting in a slight overstocking. We are starting to see improvements in activity and outlook in both North America and Europe. Speaker 300:03:30We are optimistic about the second half of the year, anticipating improved order intake for delivery in 2025. We have seen some positive movements with most of our customers experiencing a flat or improving order book across North America in Q2. Our European customers have said that destocking of their customers is largely complete, resulting in their supply and demand matching up. Despite these challenges, higher pricing is expected to mitigate much of the impact of the decline in shipment volumes for 2024. High inventory levels similarly challenged our FPP market at bar distributors. Speaker 300:04:07We appear to have come off a bottom and shipments and backlog through April have exceeded 50% of 2023 total shipments. Our primary focus remains on maintaining a strong position in the rural market enhancing operational efficiencies and reliability with the completion of our capital program. As we look forward to 2025, I am pleased to report strong indications from several of our top customers regarding increased needs for forged and cast rolls. This is due to more robust demand in both North America and Europe. In addition, one of our competitors has exited the large cash backup rule market of which we expect to be a beneficiary. Speaker 300:04:49We are at the beginning of negotiations for 2025 and as stated are encouraged. Our allocation from one of our largest customers is up over 25% compared to 2024. Many of our other large customers expect to buy more rolls in 20 25 over double digit percentages. The steel market is improving and the aluminum flat rolled market remains strong. Turning to our financials. Speaker 300:05:12In the Q1 of 2024, net sales increased slightly to $77,200,000 from 76 $800,000 in the same period last year. The income from operations for the Q1 of 2024 was $1,600,000 dollars a decrease from $2,200,000 in the Q1 of 2023. The main reason for the decline resulted from the unplanned downtime and repair costs in our Sweden plant, partially offset by improved productivity in the U. S. And strong performance at our Slovenia forge plant and our China joint venture. Speaker 300:05:47While we are facing lower volume in 2024, our pricing actions over the last few years have offset this headwind. End customer demand is improving and our potential for future orders look stronger for 2025. Our new equipment continues to perform as expected and we anticipate reliable production from this investment for many years. Speaker 200:06:07Thank you, Sam. Dave Anderson, President of Air and Liquid Systems will now cover his segment results. Speaker 400:06:14Thank you, Brett. Good morning. Air and Liquid Q1 revenue increased 18% versus prior year, primarily due to increased shipments of customary handling units. The increase was driven by the higher backlog due to the success of the increased sales force, along with the additional capacity achieved by opening the new manufacturing facility in mid-twenty 23. Backlog declined in the quarter due to capacity being sold out for 2024 in our Air Handling business unit. Speaker 400:06:44The backlog for heat exchangers and pumps both increased in the quarter. In April, we began to see more booking activity for air handling units as April bookings for air handlers exceeded total Q1 air handler bookings. Operating income for Air and Liquid declined in the Q1 versus prior year, primarily due to unfavorable product mix in the heat exchanger product line, along with higher SG and A costs due to the expansion of the sales force and higher commission expense due to the increased revenue. The product mix was a short term issue related to the timing of shipments of higher margin orders. Higher shipments for centrifugal pumps and air handlers resulted in higher operating income for both of those product lines and partially offset the unfavorable product mix in the quarter. Speaker 400:07:33Demand for the products we design and build continues to be strong. We have substantially increased our manufacturing capacity in the last 2 years, yet we continue to sell out that capacity. Multiple projects are in motion to further increase capacity. Those projects include the new equipment arriving this quarter at our facility in Buffalo. This is the equipment purchased with the funding grant we received from the U. Speaker 400:07:58S. Navy in 2023. We also continue our work at Oak Ridge National Laboratory regarding developing additive manufactured parts for the U. S. Navy. Speaker 400:08:09Additive manufacturing will provide an alternative to the traditional foundries that continue to suffer with long lead times and quality issues. We expect to continue to expand our workforce at the new manufacturing location we opened last year in Lynchburg, Virginia. This location primarily manufactures air handling units and was the main driver in expanding our capacity, which allowed air handling sales to grow by 36% in Q1 versus last year. Demand remains strong for all of our product lines and we continue to pursue opportunities to increase our capacity to meet this demand. Speaker 200:08:45Thank you, Dave. At this time, Mike McAuley, our Chief Financial Officer, will now share more detail regarding our financial performance for the quarter. Speaker 500:08:54Thank you, Brett. As indicated in our Form 10 Q filed yesterday and in our press release issued this morning, Ampco's total net sales for the 1st quarter of 2024 were $110,200,000 an increase of approximately 5% compared to net sales for the Q1 of 2023. The Air and Liquid Processing segment accounted for the growth, increasing their sales by 18% for Q1 over prior year. Forged and Gas Engineered Products segment sales were approximately flat versus prior year, as higher shipment volumes of forged rolls and higher base roll pricing was approximately offset by lower shipment volumes of cast rolls and lower surcharge pass throughs. Corporation reported a modest positive income from operations for the Q1 of 2024, which was heavily impacted by 2 temporary issues, as Fred indicated. Speaker 500:09:511st, damage from a fire in the foundry at 1 of our European cast roll facilities, which reduced operating income by approximately $900,000 due to both repair costs and production downtime, which caused lack of cost absorption. 2nd, an unfavorable sales mix effect in Air and Liquid Processing segment related to the timing of higher margin orders, as Dave indicated. In addition, the Air and Liquid segment had higher SG and A expense than the prior year quarter, given the expansion of the segment's sales and distribution network and higher commissions expense given its higher volume of shipments. Corporation's total selling and administrative expenses were approximately 11.8 percent of net sales for Q1 'twenty four compared to 11.6 percent for Q1 2023. Interest expense of $2,800,000 for the quarter increased by $700,000 compared to prior year, primarily due to higher average revolving credit facility borrowings, a higher equipment financing debt balance, and higher interest rates. Speaker 500:11:04Other income net declined primarily due to foreign exchange transaction losses recorded in Q1 2024 versus gains recorded in Q1 2023. The income tax provision for Q1 2024 increased slightly year over year given higher income of the corporation's profitable entities, which have no valuation allowances recorded against their deferred tax assets. As a result, net loss attributable to Ampco Pittsburgh for the 3 months ended March 31, 2024 was $2,700,000 or $0.14 per share. This compares to net income of $700,000 or $0.03 per share for the quarter ended March 31, 2023. Total backlog at March 31, 2024 of 348 $800,000 declined approximately 8% from December 31, 2023. Speaker 500:12:04Forchancat's Engineered Products segment backlog decreased from December 31, 2023 by approximately $19,000,000 due to timing of 2025 orders and most of the segment's major forged roll customers are expected in the second and third quarters of 2024. In addition, lower foreign exchange rates reduced the translated value of foreign backlog by about $4,000,000 The Air and Liquid segment backlog declined by $6,600,000 and this is primarily due to the strong sales quarter of air handlers in Q1, air handlers in Q1, coupled with lower order activity in that product line due to being at capacity for the balance of 2024, as Dave had indicated. Net cash flows provided by operating activities was a positive $4,500,000 for Q1 2024. Investment in net trade working capital was stable with prior quarter. Capital expenditures for the Q1 of 2024 were $2,800,000 primarily in the Forged and Cash Engineered Products segment. Speaker 500:13:11At March 31, 2024, the Corporation's liquidity position included cash on hand of $10,800,000 and undrawn availability on our revolving credit facility of $23,200,000 Operator, at this time, we would now like to open the line for questions. Operator00:13:33Thank The first question comes from Justin Bergner with Gabelli Funds. Please go ahead. Speaker 600:14:13So thank you. I think I missed Mike the comment about the cost of the fire. Speaker 500:14:17I think you threw out some Speaker 600:14:20cost number, but I didn't catch it. Could you reiterate it? Speaker 500:14:24Yes, dollars 900,000 in the quarter, Justin. Speaker 700:14:29Okay. And is that like the Speaker 600:14:32actual cost of repairing exclusive of the lost production? Is any of that recoverable from insurance? Speaker 500:14:41Yes. About $500,000 is the cost, is repair costs and that's right about $500,000 in repair costs. And then $400,000 is the impact for the plant downtime, which meant that we had manufacturing overhead, we couldn't absorb into inventory, because of lack of production. Collectively, those two pieces are 900,000 dollars in the operating income impact for the quarter. Speaker 600:15:16Great. Thank you for that detail. I assume that the operating impact is 0 or negligible in the Q2. Is that fair? Speaker 200:15:22Correct. Speaker 600:15:26Okay. Yes. Bigger picture question. So you mentioned I guess Sam mentioned that competitor on the cast backup roll market in Europe has exited. Could you provide a little bit more detail on that? Speaker 600:15:43I mean, how large a share of the market they roughly are? How you think that will impact sort of the degree Speaker 300:15:51of volume growth and pricing power prospectively? Is this Speaker 600:15:56sort of a minor deal or a major deal? Speaker 300:15:59Just, I would say it's not major, but it's probably 100 to maybe 150 basis points of revenue potentially. So it's a smaller portion of the market, but we generally we make about 100 rules and we could see upside of 20 of these larger rules or so, but that will be yet to be seen. But it didn't actually the competitor, it was a U. S. Company that decided to exit that. Speaker 600:16:33Okay. So when you say 100 to 150 basis points of revenue, that's in the context of forge cash and secured products or the whole Ampco Pittsburgh? Speaker 300:16:41FCP, fortunate cash and engineered products. Speaker 600:16:46Okay. Got you. Speaker 300:16:47And again, again, again, that's I don't want to say that's assuming we pick up our share of it. That's not. Guaranteed, but we should get our share though. Speaker 600:16:59Okay. And then just the components of the flattish revenue in Forged and Cast Engineered Products, I guess, Cast rolls down, Forged up and then Pass through up. Is that Speaker 300:17:11the Forged and cast are both down. Cast is down more, but the pricing increase is mitigating the volume decrease. Speaker 700:17:22Okay. And I Speaker 600:17:23mean, your comments were positive sequentially about orders in forged and cast rolls and I think North America and Europe. I mean do you expect us to see volumes up in the second half of 'twenty four or is that hopefully more likely to be a 'twenty five event? Speaker 300:17:43It's more likely it's 'twenty five is when we'll see the increase. We're negotiating as Mike was talking, we're negotiating now one of our largest customers. We have the allocation. We're negotiating with everybody else. But many of our customers have indicated that the roll buys will be larger next year. Speaker 300:18:03So that's what we're going that's what we're seeing in the market. Speaker 600:18:07Okay. But would you expect the second half to sort look better than the first half outside of seasonal factors on the volume front, Per? Speaker 300:18:15No. It will probably be similar. We're seeing increase on the FEP side of the business, so the non roll side. The roll side is more, I'd say, flattish, taking into account, of course, the downtime in Europe and seasonal factors that you just mentioned. Speaker 700:18:36Okay. Thank you. Yes. Thanks, Justin. Operator00:18:45The next question comes from John Bair with Ascend Wealth Advisors. Please go ahead. Speaker 700:18:52Good morning. Good morning, John. Hi. Thanks for taking the call here. Question on the exit of the competitor in Europe. Speaker 700:19:02Are you able to pick up any of their facilities or you're looking at doing anything along those lines? Speaker 300:19:13No. And it's not an exit. 1 of our competitors exited a portion, a small a particular portion of the market. So they didn't go away. And again, it was a U. Speaker 300:19:23S. Company. But no, there will not be any asset pickup or anything like that. It would just be a transfer of production product. Speaker 700:19:35Okay. And then as far as it sounds like the majority of your capital expenditures for upgrading plant and so forth is pretty much behind you. So how does that look going forward relative to the past couple of years? Speaker 300:19:53Well, number 1, the equipment reliability is the biggest factor, and it's greatly improved. So we would had assets that were decades old, and this has modernized that. And then we're also seeing higher productivity, better performance out of the equipment. So it's operating as expected, I would say, which we had high expectations, but it's running well. Speaker 700:20:23And what about on the domestic order side? Are you seeing a pickup there? Speaker 300:20:32For 2025, everybody is indicating higher roll buys. So and then these things lag a little bit. Listening just quoting earnings calls from our major customers Steel Dynamics, Nucor, U. S. Steel, Cleveland Cliffs, they're all either citing slightly improved demand in Q2 or flat demand. Speaker 300:20:55So everyone's expecting to say stay where that or go up. And then that ends up translating into higher need for our products. Speaker 700:21:07Okay, great. Thank you very much for taking the call. Or questions rather. Thank you. Operator00:21:16This concludes our question and answer session. I would like to turn the conference back over to Brett McBrayer for any closing remarks. Speaker 200:21:24Thank you, Nick. As we progress through the remainder of the year, we will continue to explore options to improve profitability in our cast roll division. The continuing investments in steel and aluminum in North America, as well as the continuing trends in near shoring present a favorable outlook for our forged roll division. As David Anderson mentioned, expanding our output in the Air and Liquids segment is a priority. In the near term, we believe we have good momentum heading into the Q2. Speaker 200:21:53I want to thank our employees for their great work and our shareholders for your continued support. Thank you for joining our call this morning.Read morePowered by Conference Call Audio Live Call not available Earnings Conference CallAmpco-Pittsburgh Q1 202400:00 / 00:00Speed:1x1.25x1.5x2x Earnings DocumentsPress Release(8-K)Quarterly report(10-Q) Ampco-Pittsburgh Earnings HeadlinesAmpco-Pittsburgh (NYSE:AP) Earns Hold Rating from Analysts at StockNews.comApril 20, 2025 | americanbankingnews.comAmpco-Pittsburgh Corporation (NYSE:AP) Q4 2024 Earnings Call TranscriptMarch 14, 2025 | msn.comSilicon Valley Gold RushA new technology has sparked a modern-day gold rush in Silicon Valley. OpenAI’s Sam Altman invested $375M. Bill Gates has backed four companies in this space. The World Economic Forum calls it “the most exciting human discovery since fire.” Whitney Tilson believes this trend could mint a new class of wealthy investors—and he’s sharing one stock to watch now, for free.April 26, 2025 | Stansberry Research (Ad)Ampco-Pittsburgh Corp (AP) Q4 2024 Earnings Call Highlights: Navigating Challenges with ...March 14, 2025 | gurufocus.comQ4 2024 Ampco-Pittsburgh Corp Earnings Call TranscriptMarch 14, 2025 | gurufocus.comAmpco-Pittsburgh Reports 2024 Financial ResultsMarch 14, 2025 | tipranks.comSee More Ampco-Pittsburgh Headlines Get Earnings Announcements in your inboxWant to stay updated on the latest earnings announcements and upcoming reports for companies like Ampco-Pittsburgh? Sign up for Earnings360's daily newsletter to receive timely earnings updates on Ampco-Pittsburgh and other key companies, straight to your email. Email Address About Ampco-PittsburghAmpco-Pittsburgh (NYSE:AP), together with its subsidiaries, engages in manufacture and sale of specialty metal products and customized equipment to commercial and industrial users worldwide. The company operates through Forged and Cast Engineered Products (FCEP); and Air and Liquid Processing (ALP) segments. The FCEP segment produces forged hardened steel rolls, cast rolls and, forged engineered products that are used in cold rolling mills by producers of steel, aluminum, and other metals; cast rolls for hot strip mills, medium/heavy section mills, roughing mills, and plate mills; and forged engineered products for narrow and wide strip and aluminum mills, back-up rolls for narrow strip mills, and leveling rolls and shafts. The ALP segment produces custom-engineered finned tube heat exchange coils and related heat transfer products for various industries, including OEM/commercial, nuclear power generation, and industrial manufacturing; custom-designed air handling systems for institutional, pharmaceutical, and general industrial building markets; and manufacture centrifugal pumps for the fossil fueled power generation, marine defense, and industrial refrigeration industries. Ampco-Pittsburgh Corporation was incorporated in 1929 and is headquartered in Carnegie, Pennsylvania.View Ampco-Pittsburgh ProfileRead more More Earnings Resources from MarketBeat Earnings Tools Today's Earnings Tomorrow's Earnings Next Week's Earnings Upcoming Earnings Calls Earnings Newsletter Earnings Call Transcripts Earnings Beats & Misses Corporate Guidance Earnings Screener Earnings By Country U.S. Earnings Reports Canadian Earnings Reports U.K. Earnings Reports Latest Articles Market Anticipation Builds: Joby Stock Climbs Ahead of EarningsIs Intuitive Surgical a Buy After Volatile Reaction to Earnings?Seismic Shift at Intel: Massive Layoffs Precede Crucial EarningsRocket Lab Lands New Contract, Builds Momentum Ahead of EarningsAmazon's Earnings Could Fuel a Rapid Breakout Tesla Earnings Miss, But Musk Refocuses and Bulls ReactQualcomm’s Range Narrows Ahead of Earnings as Bulls Step In Upcoming Earnings Cadence Design Systems (4/28/2025)Welltower (4/28/2025)Waste Management (4/28/2025)AstraZeneca (4/29/2025)Mondelez International (4/29/2025)PayPal (4/29/2025)Starbucks (4/29/2025)DoorDash (4/29/2025)Honeywell International (4/29/2025)Regeneron Pharmaceuticals (4/29/2025) Get 30 Days of MarketBeat All Access for Free Sign up for MarketBeat All Access to gain access to MarketBeat's full suite of research tools. 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There are 8 speakers on the call. Operator00:00:00Welcome to the Ampco Pittsburgh Corporation First Quarter 20 24 Earnings Results Conference Call. All participants will be in listen only mode. After today's presentation, there will be an opportunity to ask questions. Please note this event is being recorded. I'd now like to turn the conference over to Kim Knox, Corporate Secretary. Operator00:00:36Please go ahead. Speaker 100:00:38Thank you, Nick, and good morning to everyone joining us on today's Q1 2024 conference call. Joining me today are Brett McBrayer, our Chief Executive Officer and Mike McAuley, Senior Vice President, Chief Financial Officer and Treasurer. Also joining us on the call today are Sam Lyon, President of Union Electric Steel Corporation and Dave Anderson, President of Air and Liquid Systems Corporation. Before we begin, I would like to remind everyone that participants on this call may make statements or comments that are forward looking and may include financial projections or other statements of the corporation's plans, objectives, expectations or intentions. These matters involve certain risks and uncertainties, many of which are outside the corporation's control. Speaker 100:01:26The corporation's actual results may differ significantly from those projected or suggested in any forward looking statements due to various risk factors, including those discussed in the corporation's most recently filed Form 10 ks and in subsequent filings with the Securities and Exchange Commission. We do not undertake any obligation to update or otherwise release publicly any revision to our forward looking statements. A replay of this call will be posted on our website. To access the earnings release or webcast replay, please consult the Investors section of our website at amcopgh.com. With that, I'd like to turn the call over to Brett McBrayer, Ampco Pittsburgh's CEO. Speaker 100:02:11Brett? Speaker 200:02:11Thank you, Kim. Good morning and thank you for joining our call. As reported in our press release, net sales finished the Q1 of 2024 at $110,200,000 up over 5% compared to the Q1 2023. Income from operations for the quarter was $100,000 versus $2,000,000 when compared to the Q1 of 2023. Significantly impacting our quarter's performance was plant downtime due to a fire in one of our foreign cast roll facilities and the associated repair expense, as well as an unfavorable product mix in our Air and Liquid Processing segment. Speaker 200:02:53These headwinds are behind us as we have moved into the Q2. For further comments on our performance, I will now turn the call over to Sam Lyon, President of our Forged and Cash Engineered Products segment. Speaker 300:03:05Thank you, Brett, and good morning. In our Forged Cast and Engineered Products segment, the market conditions have been muted. In 2024, the rural market will be lower overall with significant reductions in Europe. This reduction occurred as the anticipated recovery was slower than forecasted, resulting in a slight overstocking. We are starting to see improvements in activity and outlook in both North America and Europe. Speaker 300:03:30We are optimistic about the second half of the year, anticipating improved order intake for delivery in 2025. We have seen some positive movements with most of our customers experiencing a flat or improving order book across North America in Q2. Our European customers have said that destocking of their customers is largely complete, resulting in their supply and demand matching up. Despite these challenges, higher pricing is expected to mitigate much of the impact of the decline in shipment volumes for 2024. High inventory levels similarly challenged our FPP market at bar distributors. Speaker 300:04:07We appear to have come off a bottom and shipments and backlog through April have exceeded 50% of 2023 total shipments. Our primary focus remains on maintaining a strong position in the rural market enhancing operational efficiencies and reliability with the completion of our capital program. As we look forward to 2025, I am pleased to report strong indications from several of our top customers regarding increased needs for forged and cast rolls. This is due to more robust demand in both North America and Europe. In addition, one of our competitors has exited the large cash backup rule market of which we expect to be a beneficiary. Speaker 300:04:49We are at the beginning of negotiations for 2025 and as stated are encouraged. Our allocation from one of our largest customers is up over 25% compared to 2024. Many of our other large customers expect to buy more rolls in 20 25 over double digit percentages. The steel market is improving and the aluminum flat rolled market remains strong. Turning to our financials. Speaker 300:05:12In the Q1 of 2024, net sales increased slightly to $77,200,000 from 76 $800,000 in the same period last year. The income from operations for the Q1 of 2024 was $1,600,000 dollars a decrease from $2,200,000 in the Q1 of 2023. The main reason for the decline resulted from the unplanned downtime and repair costs in our Sweden plant, partially offset by improved productivity in the U. S. And strong performance at our Slovenia forge plant and our China joint venture. Speaker 300:05:47While we are facing lower volume in 2024, our pricing actions over the last few years have offset this headwind. End customer demand is improving and our potential for future orders look stronger for 2025. Our new equipment continues to perform as expected and we anticipate reliable production from this investment for many years. Speaker 200:06:07Thank you, Sam. Dave Anderson, President of Air and Liquid Systems will now cover his segment results. Speaker 400:06:14Thank you, Brett. Good morning. Air and Liquid Q1 revenue increased 18% versus prior year, primarily due to increased shipments of customary handling units. The increase was driven by the higher backlog due to the success of the increased sales force, along with the additional capacity achieved by opening the new manufacturing facility in mid-twenty 23. Backlog declined in the quarter due to capacity being sold out for 2024 in our Air Handling business unit. Speaker 400:06:44The backlog for heat exchangers and pumps both increased in the quarter. In April, we began to see more booking activity for air handling units as April bookings for air handlers exceeded total Q1 air handler bookings. Operating income for Air and Liquid declined in the Q1 versus prior year, primarily due to unfavorable product mix in the heat exchanger product line, along with higher SG and A costs due to the expansion of the sales force and higher commission expense due to the increased revenue. The product mix was a short term issue related to the timing of shipments of higher margin orders. Higher shipments for centrifugal pumps and air handlers resulted in higher operating income for both of those product lines and partially offset the unfavorable product mix in the quarter. Speaker 400:07:33Demand for the products we design and build continues to be strong. We have substantially increased our manufacturing capacity in the last 2 years, yet we continue to sell out that capacity. Multiple projects are in motion to further increase capacity. Those projects include the new equipment arriving this quarter at our facility in Buffalo. This is the equipment purchased with the funding grant we received from the U. Speaker 400:07:58S. Navy in 2023. We also continue our work at Oak Ridge National Laboratory regarding developing additive manufactured parts for the U. S. Navy. Speaker 400:08:09Additive manufacturing will provide an alternative to the traditional foundries that continue to suffer with long lead times and quality issues. We expect to continue to expand our workforce at the new manufacturing location we opened last year in Lynchburg, Virginia. This location primarily manufactures air handling units and was the main driver in expanding our capacity, which allowed air handling sales to grow by 36% in Q1 versus last year. Demand remains strong for all of our product lines and we continue to pursue opportunities to increase our capacity to meet this demand. Speaker 200:08:45Thank you, Dave. At this time, Mike McAuley, our Chief Financial Officer, will now share more detail regarding our financial performance for the quarter. Speaker 500:08:54Thank you, Brett. As indicated in our Form 10 Q filed yesterday and in our press release issued this morning, Ampco's total net sales for the 1st quarter of 2024 were $110,200,000 an increase of approximately 5% compared to net sales for the Q1 of 2023. The Air and Liquid Processing segment accounted for the growth, increasing their sales by 18% for Q1 over prior year. Forged and Gas Engineered Products segment sales were approximately flat versus prior year, as higher shipment volumes of forged rolls and higher base roll pricing was approximately offset by lower shipment volumes of cast rolls and lower surcharge pass throughs. Corporation reported a modest positive income from operations for the Q1 of 2024, which was heavily impacted by 2 temporary issues, as Fred indicated. Speaker 500:09:511st, damage from a fire in the foundry at 1 of our European cast roll facilities, which reduced operating income by approximately $900,000 due to both repair costs and production downtime, which caused lack of cost absorption. 2nd, an unfavorable sales mix effect in Air and Liquid Processing segment related to the timing of higher margin orders, as Dave indicated. In addition, the Air and Liquid segment had higher SG and A expense than the prior year quarter, given the expansion of the segment's sales and distribution network and higher commissions expense given its higher volume of shipments. Corporation's total selling and administrative expenses were approximately 11.8 percent of net sales for Q1 'twenty four compared to 11.6 percent for Q1 2023. Interest expense of $2,800,000 for the quarter increased by $700,000 compared to prior year, primarily due to higher average revolving credit facility borrowings, a higher equipment financing debt balance, and higher interest rates. Speaker 500:11:04Other income net declined primarily due to foreign exchange transaction losses recorded in Q1 2024 versus gains recorded in Q1 2023. The income tax provision for Q1 2024 increased slightly year over year given higher income of the corporation's profitable entities, which have no valuation allowances recorded against their deferred tax assets. As a result, net loss attributable to Ampco Pittsburgh for the 3 months ended March 31, 2024 was $2,700,000 or $0.14 per share. This compares to net income of $700,000 or $0.03 per share for the quarter ended March 31, 2023. Total backlog at March 31, 2024 of 348 $800,000 declined approximately 8% from December 31, 2023. Speaker 500:12:04Forchancat's Engineered Products segment backlog decreased from December 31, 2023 by approximately $19,000,000 due to timing of 2025 orders and most of the segment's major forged roll customers are expected in the second and third quarters of 2024. In addition, lower foreign exchange rates reduced the translated value of foreign backlog by about $4,000,000 The Air and Liquid segment backlog declined by $6,600,000 and this is primarily due to the strong sales quarter of air handlers in Q1, air handlers in Q1, coupled with lower order activity in that product line due to being at capacity for the balance of 2024, as Dave had indicated. Net cash flows provided by operating activities was a positive $4,500,000 for Q1 2024. Investment in net trade working capital was stable with prior quarter. Capital expenditures for the Q1 of 2024 were $2,800,000 primarily in the Forged and Cash Engineered Products segment. Speaker 500:13:11At March 31, 2024, the Corporation's liquidity position included cash on hand of $10,800,000 and undrawn availability on our revolving credit facility of $23,200,000 Operator, at this time, we would now like to open the line for questions. Operator00:13:33Thank The first question comes from Justin Bergner with Gabelli Funds. Please go ahead. Speaker 600:14:13So thank you. I think I missed Mike the comment about the cost of the fire. Speaker 500:14:17I think you threw out some Speaker 600:14:20cost number, but I didn't catch it. Could you reiterate it? Speaker 500:14:24Yes, dollars 900,000 in the quarter, Justin. Speaker 700:14:29Okay. And is that like the Speaker 600:14:32actual cost of repairing exclusive of the lost production? Is any of that recoverable from insurance? Speaker 500:14:41Yes. About $500,000 is the cost, is repair costs and that's right about $500,000 in repair costs. And then $400,000 is the impact for the plant downtime, which meant that we had manufacturing overhead, we couldn't absorb into inventory, because of lack of production. Collectively, those two pieces are 900,000 dollars in the operating income impact for the quarter. Speaker 600:15:16Great. Thank you for that detail. I assume that the operating impact is 0 or negligible in the Q2. Is that fair? Speaker 200:15:22Correct. Speaker 600:15:26Okay. Yes. Bigger picture question. So you mentioned I guess Sam mentioned that competitor on the cast backup roll market in Europe has exited. Could you provide a little bit more detail on that? Speaker 600:15:43I mean, how large a share of the market they roughly are? How you think that will impact sort of the degree Speaker 300:15:51of volume growth and pricing power prospectively? Is this Speaker 600:15:56sort of a minor deal or a major deal? Speaker 300:15:59Just, I would say it's not major, but it's probably 100 to maybe 150 basis points of revenue potentially. So it's a smaller portion of the market, but we generally we make about 100 rules and we could see upside of 20 of these larger rules or so, but that will be yet to be seen. But it didn't actually the competitor, it was a U. S. Company that decided to exit that. Speaker 600:16:33Okay. So when you say 100 to 150 basis points of revenue, that's in the context of forge cash and secured products or the whole Ampco Pittsburgh? Speaker 300:16:41FCP, fortunate cash and engineered products. Speaker 600:16:46Okay. Got you. Speaker 300:16:47And again, again, again, that's I don't want to say that's assuming we pick up our share of it. That's not. Guaranteed, but we should get our share though. Speaker 600:16:59Okay. And then just the components of the flattish revenue in Forged and Cast Engineered Products, I guess, Cast rolls down, Forged up and then Pass through up. Is that Speaker 300:17:11the Forged and cast are both down. Cast is down more, but the pricing increase is mitigating the volume decrease. Speaker 700:17:22Okay. And I Speaker 600:17:23mean, your comments were positive sequentially about orders in forged and cast rolls and I think North America and Europe. I mean do you expect us to see volumes up in the second half of 'twenty four or is that hopefully more likely to be a 'twenty five event? Speaker 300:17:43It's more likely it's 'twenty five is when we'll see the increase. We're negotiating as Mike was talking, we're negotiating now one of our largest customers. We have the allocation. We're negotiating with everybody else. But many of our customers have indicated that the roll buys will be larger next year. Speaker 300:18:03So that's what we're going that's what we're seeing in the market. Speaker 600:18:07Okay. But would you expect the second half to sort look better than the first half outside of seasonal factors on the volume front, Per? Speaker 300:18:15No. It will probably be similar. We're seeing increase on the FEP side of the business, so the non roll side. The roll side is more, I'd say, flattish, taking into account, of course, the downtime in Europe and seasonal factors that you just mentioned. Speaker 700:18:36Okay. Thank you. Yes. Thanks, Justin. Operator00:18:45The next question comes from John Bair with Ascend Wealth Advisors. Please go ahead. Speaker 700:18:52Good morning. Good morning, John. Hi. Thanks for taking the call here. Question on the exit of the competitor in Europe. Speaker 700:19:02Are you able to pick up any of their facilities or you're looking at doing anything along those lines? Speaker 300:19:13No. And it's not an exit. 1 of our competitors exited a portion, a small a particular portion of the market. So they didn't go away. And again, it was a U. Speaker 300:19:23S. Company. But no, there will not be any asset pickup or anything like that. It would just be a transfer of production product. Speaker 700:19:35Okay. And then as far as it sounds like the majority of your capital expenditures for upgrading plant and so forth is pretty much behind you. So how does that look going forward relative to the past couple of years? Speaker 300:19:53Well, number 1, the equipment reliability is the biggest factor, and it's greatly improved. So we would had assets that were decades old, and this has modernized that. And then we're also seeing higher productivity, better performance out of the equipment. So it's operating as expected, I would say, which we had high expectations, but it's running well. Speaker 700:20:23And what about on the domestic order side? Are you seeing a pickup there? Speaker 300:20:32For 2025, everybody is indicating higher roll buys. So and then these things lag a little bit. Listening just quoting earnings calls from our major customers Steel Dynamics, Nucor, U. S. Steel, Cleveland Cliffs, they're all either citing slightly improved demand in Q2 or flat demand. Speaker 300:20:55So everyone's expecting to say stay where that or go up. And then that ends up translating into higher need for our products. Speaker 700:21:07Okay, great. Thank you very much for taking the call. Or questions rather. Thank you. Operator00:21:16This concludes our question and answer session. I would like to turn the conference back over to Brett McBrayer for any closing remarks. Speaker 200:21:24Thank you, Nick. As we progress through the remainder of the year, we will continue to explore options to improve profitability in our cast roll division. The continuing investments in steel and aluminum in North America, as well as the continuing trends in near shoring present a favorable outlook for our forged roll division. As David Anderson mentioned, expanding our output in the Air and Liquids segment is a priority. In the near term, we believe we have good momentum heading into the Q2. Speaker 200:21:53I want to thank our employees for their great work and our shareholders for your continued support. Thank you for joining our call this morning.Read morePowered by