[Part I – Financial Information](index=3&type=section&id=Part%20I%20%E2%80%93%20Financial%20Information) This section presents the unaudited financial statements, management's discussion, market risk disclosures, and internal controls [Item 1 – Financial Statements (Unaudited)](index=3&type=section&id=Item%201%20%E2%80%93%20Financial%20Statements%20(Unaudited)) The unaudited consolidated financial statements for June 30, 2022, show increased assets and liabilities, with varied net sales and income results [Condensed Consolidated Balance Sheets](index=3&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Total assets increased to **$501.8 million** while total liabilities rose to **$418.1 million**, leading to a decrease in shareholders' equity Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | June 30, 2022 | December 31, 2021 | | :--- | :--- | :--- | | **Total current assets** | $215,320 | $188,297 | | **Total assets** | $501,771 | $485,632 | | **Total current liabilities** | $128,760 | $125,042 | | **Long-term debt** | $75,791 | $40,912 | | **Total liabilities** | $418,113 | $393,826 | | **Total shareholders' equity** | $83,658 | $91,806 | [Condensed Consolidated Statements of Operations](index=4&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) Q2 2022 net sales increased to **$102.6 million**, but operating income turned to a loss, while six-month net income improved Statement of Operations Summary (in thousands, except per share data) | Metric | Q2 2022 | Q2 2021 | 6 Months 2022 | 6 Months 2021 | | :--- | :--- | :--- | :--- | :--- | | **Total net sales** | $102,582 | $92,428 | $197,008 | $179,228 | | **(Loss) income from operations** | $(320) | $469 | $923 | $1,376 | | **Net income attributable to Ampco-Pittsburgh** | $403 | $1,063 | $2,048 | $1,230 | | **Diluted EPS** | $0.02 | $0.05 | $0.11 | $0.06 | [Condensed Consolidated Statements of Cash Flows](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Net cash used in operating activities significantly increased to **$23.0 million**, primarily funded by increased financing activities Cash Flow Summary - Six Months Ended June 30 (in thousands) | Cash Flow Activity | 2022 | 2021 | | :--- | :--- | :--- | | **Net cash used in operating activities** | $(23,033) | $(2,754) | | **Net cash used in investing activities** | $(6,725) | $(6,536) | | **Net cash provided by financing activities** | $27,500 | $5,842 | | **Net decrease in cash** | $(2,965) | $(3,529) | | **Cash at end of period** | $7,372 | $13,313 | [Notes to Condensed Consolidated Financial Statements](index=8&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) Notes detail business segments, accounting policies, and significant financial components, including increased debt and asbestos litigation liabilities - The company operates in two segments: Forged and Cast Engineered Products (FCEP) and Air and Liquid Processing (ALP), facing ongoing disruptions from global conflicts and the pandemic[22](index=22&type=chunk) - Borrowings under the revolving credit facility significantly increased to **$57.7 million** at June 30, 2022, from **$29.7 million** at year-end 2021[36](index=36&type=chunk)[38](index=38&type=chunk) Asbestos Liability and Insurance Receivable (in thousands) | Account | June 30, 2022 | | :--- | :--- | | Asbestos liability, end of period | $171,710 | | Insurance receivable – asbestos, end of period | $116,727 | - The company plans a significant capital program of approximately **$27 million** over the next 15 months for its FCEP locations, with **$23 million** in commitments outstanding as of June 30, 2022[45](index=45&type=chunk) [Item 2 – Management's Discussion and Analysis of Financial Condition and Results of Operations](index=22&type=section&id=Item%202%20%E2%80%93%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses post-pandemic recovery, persistent inflation, increased net sales driven by FCEP, declining operating income, and significant backlog growth [Executive Overview and Business Conditions](index=23&type=section&id=Executive%20Overview%20and%20Business%20Conditions) The company observes market recovery in FCEP segments but faces significant cost inflation, mitigated by price increases and surcharges - FCEP segment's roll market has recovered to pre-pandemic levels, with strengthening demand in the FEP market from steel distribution and oil & gas sectors[91](index=91&type=chunk) - Both segments are experiencing significant cost inflation in materials, energy, and transportation, with price increases and surcharges implemented to offset these costs, albeit with a time lag[91](index=91&type=chunk) [Results of Operations](index=24&type=section&id=Results%20of%20Operations) Consolidated net sales increased, driven by FCEP, but operating income declined due to cost pressures, while backlog grew significantly Financial Performance Summary (in thousands) | Metric | Q2 2022 | Q2 2021 | 6 Months 2022 | 6 Months 2021 | | :--- | :--- | :--- | :--- | :--- | | **Consolidated Net Sales** | $102,582 | $92,428 | $197,008 | $179,228 | | **Consolidated (Loss) Income from Operations** | $(320) | $469 | $923 | $1,376 | - Consolidated backlog grew significantly to **$348.8 million** at June 30, 2022, an increase of **$56.2 million** from December 31, 2021[93](index=93&type=chunk)[94](index=94&type=chunk) - Costs of products sold as a percentage of sales increased to **85.3%** in Q2 2022 from **81.6%** in Q2 2021, primarily due to higher material, energy, and transportation costs in the FCEP segment[95](index=95&type=chunk) [Liquidity and Capital Resources](index=28&type=section&id=Liquidity%20and%20Capital%20Resources) The company used **$23.0 million** in operating cash for working capital, funded by increased borrowings, and plans a **$27 million** capital program - Net cash used in operating activities was **$23.0 million** for the first six months of 2022, mainly due to investment in trade working capital[114](index=114&type=chunk) - The company plans a significant capital program of approximately **$27 million** over the next 15 months for its FCEP locations and is exploring long-term financing options[115](index=115&type=chunk)[118](index=118&type=chunk) - As of June 30, 2022, remaining availability under the revolving credit facility was approximately **$24.4 million**[117](index=117&type=chunk) [Item 3 – Quantitative and Qualitative Disclosures About Market Risk](index=29&type=section&id=Item%203%20%E2%80%93%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This section is marked as "Not applicable," indicating no new material disclosures regarding market risk for the period - The report states this section is not applicable[119](index=119&type=chunk) [Item 4 – Controls and Procedures](index=29&type=section&id=Item%204%20%E2%80%93%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective as of June 30, 2022, with no material changes to internal controls - Management concluded that the Corporation's disclosure controls and procedures were effective as of June 30, 2022[120](index=120&type=chunk) - No material changes to the internal control over financial reporting were identified during the last fiscal quarter[121](index=121&type=chunk) [Part II – Other Information](index=30&type=section&id=Part%20II%20%E2%80%93%20Other%20Information) This section covers legal proceedings, risk factors, and a list of exhibits filed with the Form 10-Q [Item 1 – Legal Proceedings](index=30&type=section&id=Item%201%20%E2%80%93%20Legal%20Proceedings) This section incorporates by reference information on ongoing asbestos-related litigation from the financial statement notes - The report refers to Note 15 of the financial statements for information on legal proceedings, which focuses on asbestos litigation[123](index=123&type=chunk) [Item 1A – Risk Factors](index=30&type=section&id=Item%201A%20%E2%80%93%20Risk%20Factors) There are no material changes to the risk factors previously disclosed in the company's latest Annual Report on Form 10-K - There are no material changes to the risk factors from the company's latest Annual Report on Form 10-K[124](index=124&type=chunk) [Item 6 – Exhibits](index=30&type=section&id=Item%206%20%E2%80%93%20Exhibits) This section lists the exhibits filed with the Form 10-Q, including corporate governance documents and required certifications - Lists filed exhibits, including Sarbanes-Oxley certifications and an amendment to the Revolving Credit and Security Agreement[125](index=125&type=chunk) [Signatures](index=31&type=section&id=Signatures) The report was duly signed and authorized on August 9, 2022, by the CEO and CFO - The report was duly signed and authorized on August 9, 2022, by J. Brett McBrayer (CEO) and Michael G. McAuley (CFO)[127](index=127&type=chunk)[128](index=128&type=chunk)

Ampco-Pittsburgh Corporation (NYSE:AP) Q1 2022 Results Conference Call May 10, 2022 10:30 AM ET Company Participants Melanie Sprowson - Director, Investor Relations Brett McBrayer - Chief Executive Officer Mike McAuley - Senior Vice President, Chief Financial Officer and Treasurer Sam Lyon - President, Union Electric Steel Corporation Dave Anderson - President, Air & Liquid Systems Corporation Conference Call Participants Justin Bergner - Gabelli Funds Operator Good morning, and welcome to Ampco-Pittsburgh' ...

Part I – Financial Information [Item 1 – Financial Statements (Unaudited)](index=2&type=section&id=Item%201%20%E2%80%93%20Financial%20Statements%20%28Unaudited%29) This section presents Ampco-Pittsburgh Corporation's unaudited condensed consolidated financial statements and notes for Q1 2022 and 2021 [Condensed Consolidated Balance Sheets](index=3&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) The balance sheets show an increase in total assets driven by current assets, with a slight rise in shareholders' equity **Condensed Consolidated Balance Sheet Highlights (in thousands):** | Metric | March 31, 2022 | December 31, 2021 | | :----------------------------------- | :------------- | :---------------- | | Total Assets | $502,634 | $485,632 | | Total Liabilities | $410,704 | $393,826 | | Total Shareholders' Equity | $91,930 | $91,806 | - Total assets increased by **$17,002 thousand** from December 31, 2021, to March 31, 2022, primarily driven by an increase in current assets, notably receivables and inventories[6](index=6&type=chunk) [Condensed Consolidated Statements of Operations](index=4&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) The statements of operations reflect increased net sales and a significant rise in net income attributable to Ampco-Pittsburgh **Condensed Consolidated Statements of Operations Highlights (in thousands, except per share amounts):** | Metric | Three Months Ended March 31, 2022 | Three Months Ended March 31, 2021 | | :------------------------------------------------- | :-------------------------------- | :-------------------------------- | | Total Net Sales | $94,426 | $86,800 | | Income from Operations | $1,243 | $907 | | Income Before Income Taxes | $1,665 | $695 | | Net Income | $1,609 | $314 | | Net Income Attributable to Ampco-Pittsburgh | $1,645 | $167 | | Basic Net Income Per Share Attributable to Ampco-Pittsburgh | $0.09 | $0.01 | | Diluted Net Income Per Share Attributable to Ampco-Pittsburgh | $0.08 | $0.01 | - Net sales increased by **$7,626 thousand** year-over-year, and net income attributable to Ampco-Pittsburgh significantly rose from **$167 thousand** in Q1 2021 to **$1,645 thousand** in Q1 2022[9](index=9&type=chunk) [Condensed Consolidated Statements of Comprehensive Loss](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Comprehensive%20Loss) Despite increased net income, the company reported a comprehensive loss due to other comprehensive loss components **Condensed Consolidated Statements of Comprehensive Loss Highlights (in thousands):** | Metric | Three Months Ended March 31, 2022 | Three Months Ended March 31, 2021 | | :---------------------------------------------------- | :-------------------------------- | :-------------------------------- | | Net Income | $1,609 | $314 | | Other Comprehensive Loss | $(1,755) | $(458) | | Comprehensive Loss | $(146) | $(144) | | Comprehensive Loss Attributable to Ampco-Pittsburgh | $(138) | $(325) | - The company reported a comprehensive loss of **$(146) thousand** in Q1 2022, primarily due to foreign currency translation adjustments and other comprehensive loss components, despite an increase in net income[12](index=12&type=chunk) [Condensed Consolidated Statements of Shareholders' Equity](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Shareholders%27%20Equity) Total shareholders' equity saw a slight increase, driven by net income offsetting other comprehensive losses **Condensed Consolidated Statements of Shareholders' Equity Highlights (in thousands):** | Metric | March 31, 2022 | January 1, 2022 | | :------------------------------------ | :------------- | :-------------- | | Common Stock | $19,191 | $19,184 | | Additional Paid-in Capital | $174,824 | $174,561 | | Retained Deficit | $(54,421) | $(56,066) | | Accumulated Other Comprehensive Loss | $(56,889) | $(55,106) | | Total Ampco-Pittsburgh Shareholders' Equity | $82,705 | $82,573 | | Noncontrolling Interest | $9,225 | $9,233 | | Total Shareholders' Equity | $91,930 | $91,806 | - Total shareholders' equity slightly increased from **$91,806 thousand** at January 1, 2022, to **$91,930 thousand** at March 31, 2022, driven by net income offsetting other comprehensive losses[15](index=15&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Operating activities shifted to a significant cash outflow, while financing activities provided substantial cash from borrowings **Condensed Consolidated Statements of Cash Flows Highlights (in thousands):** | Metric | Three Months Ended March 31, 2022 | Three Months Ended March 31, 2021 | | :------------------------------------------------ | :-------------------------------- | :-------------------------------- | | Net Cash Flows (Used in) Provided by Operating Activities | $(16,272) | $1,858 | | Net Cash Flows Used in Investing Activities | $(3,330) | $(2,303) | | Net Cash Flows Provided by Financing Activities | $16,228 | $2,172 | | Net (Decrease) Increase in Cash and Cash Equivalents | $(3,552) | $1,409 | | Cash and Cash Equivalents at End of Period | $6,785 | $18,251 | - Operating activities shifted from providing **$1,858 thousand** in cash in Q1 2021 to using **$(16,272) thousand** in Q1 2022, primarily due to increased investment in trade working capital[18](index=18&type=chunk)[104](index=104&type=chunk)[106](index=106&type=chunk) - Financing activities provided **$16,228 thousand** in Q1 2022, largely from net borrowings under the revolving credit facility[18](index=18&type=chunk)[104](index=104&type=chunk)[106](index=106&type=chunk) [Notes to Condensed Consolidated Financial Statements](index=8&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) This section provides detailed explanations of various financial accounts, business segments, accounting policies, and significant liabilities [Note 1 – Overview of the Business & Unaudited Condensed Consolidated Financial Statements](index=8&type=section&id=Note%201%20%E2%80%93%20Overview%20of%20the%20Business%20%26%20Unaudited%20Condensed%20Consolidated%20Financial%20Statements) Ampco-Pittsburgh operates in two segments, monitoring global economic impacts and evaluating new accounting standards - Ampco-Pittsburgh Corporation operates in two segments: Forged and Cast Engineered Products (FCEP) and Air and Liquid Processing (ALP), manufacturing specialty metal products and customized equipment globally[21](index=21&type=chunk) - The company is monitoring ongoing impacts from COVID-19 and the Russia-Ukraine conflict, including global supply chain disruptions, inflationary pressures, and transportation delays[21](index=21&type=chunk) - The Corporation, as a Smaller Reporting Company, has deferred the effective date for ASU 2016-13 (CECL model) to fiscal years beginning after December 15, 2022, and is evaluating its impact on financial position and operating results, but not liquidity[22](index=22&type=chunk) [Note 2 – Inventories](index=9&type=section&id=Note%202%20%E2%80%93%20Inventories) Total inventories increased, with a significant portion valued using the LIFO method **Inventory Composition (in thousands):** | Category | March 31, 2022 | December 31, 2021 | | :--------------- | :------------- | :---------------- | | Raw materials | $27,725 | $22,332 | | Work-in-process | $42,741 | $37,447 | | Finished goods | $16,698 | $18,093 | | Supplies | $10,708 | $10,326 | | Total Inventories | $97,872 | $88,198 | - Approximately **37%** of inventories were valued using the LIFO method at March 31, 2022, with the remainder using FIFO[24](index=24&type=chunk)[25](index=25&type=chunk) - Total inventories increased by **$9,674 thousand** from December 31, 2021, to March 31, 2022[24](index=24&type=chunk)[25](index=25&type=chunk) [Note 3 – Property, Plant and Equipment](index=9&type=section&id=Note%203%20%E2%80%93%20Property%2C%20Plant%20and%20Equipment) Net property, plant and equipment slightly decreased, with depreciation expense impacting the total **Property, Plant and Equipment, Net (in thousands):** | Category | March 31, 2022 | December 31, 2021 | | :-------------------------------- | :------------- | :---------------- | | Land and land improvements | $10,271 | $10,377 | | Buildings | $63,090 | $63,166 | | Machinery and equipment | $347,068 | $345,118 | | Construction-in-process | $11,414 | $11,019 | | Other | $6,798 | $6,798 | | Accumulated depreciation and amortization | $(282,156) | $(277,915) | | Property, plant and equipment, net | $156,485 | $158,563 | - Net property, plant and equipment decreased slightly by **$2,078 thousand** from December 31, 2021, to March 31, 2022[27](index=27&type=chunk) - Depreciation expense was approximately **$4,389 thousand** for the three months ended March 31, 2022[27](index=27&type=chunk) [Note 4 – Intangible Assets](index=9&type=section&id=Note%204%20%E2%80%93%20Intangible%20Assets) Net intangible assets decreased due to amortization and foreign currency exchange rate changes **Intangible Assets, Net (in thousands):** | Category | March 31, 2022 | December 31, 2021 | | :----------------------- | :------------- | :---------------- | | Customer relationships | $5,751 | $5,850 | | Developed technology | $4,128 | $4,201 | | Trade name | $2,384 | $2,442 | | Accumulated amortization | $(6,293) | $(6,289) | | Intangible assets, net | $5,970 | $6,204 | - Net intangible assets decreased by **$234 thousand** from December 31, 2021, to March 31, 2022, primarily due to amortization of intangible assets and the impact of foreign currency exchange rate changes[28](index=28&type=chunk)[29](index=29&type=chunk) [Note 5 – Other Current Liabilities](index=10&type=section&id=Note%205%20%E2%80%93%20Other%20Current%20Liabilities) Total other current liabilities increased, while product warranty claims and customer deposits decreased **Other Current Liabilities (in thousands):** | Category | March 31, 2022 | December 31, 2021 | | :--------------------------- | :------------- | :---------------- | | Customer-related liabilities | $12,082 | $12,548 | | Accrued interest payable | $1,807 | $1,772 | | Accrued sales commissions | $2,022 | $1,864 | | Other | $6,024 | $5,026 | | Total Other Current Liabilities | $21,935 | $21,210 | - Total other current liabilities increased by **$725 thousand** from December 31, 2021, to March 31, 2022[32](index=32&type=chunk)[33](index=33&type=chunk)[34](index=34&type=chunk) - The liability for product warranty claims decreased from **$7,331 thousand** to **$6,997 thousand**, while customer deposits decreased from **$4,328 thousand** to **$3,989 thousand** during the three months ended March 31, 2022[32](index=32&type=chunk)[33](index=33&type=chunk)[34](index=34&type=chunk) [Note 6 – Debt](index=10&type=section&id=Note%206%20%E2%80%93%20Debt) Outstanding borrowings increased significantly, primarily due to increased utilization of the revolving credit facility **Debt Composition (in thousands):** | Category | March 31, 2022 | December 31, 2021 | | :-------------------------------- | :------------- | :---------------- | | Revolving credit facility | $45,487 | $29,744 | | Sale and leaseback financing obligation | $20,690 | $20,546 | | Industrial Revenue Bonds | $9,191 | $9,191 | | Minority shareholder loan | $742 | $0 | | Finance lease liabilities | $1,812 | $1,438 | | Outstanding Borrowings | $77,922 | $60,919 | | Debt – current portion | $(19,530) | $(20,007) | | Long-term debt | $58,392 | $40,912 | - Outstanding borrowings increased by **$17,003 thousand** from December 31, 2021, to March 31, 2022, primarily due to increased utilization of the revolving credit facility[35](index=35&type=chunk)[38](index=38&type=chunk) - The revolving credit facility has a **$100,000 thousand** limit, with **$33,000 thousand** remaining availability as of March 31, 2022[35](index=35&type=chunk)[38](index=38&type=chunk) [Note 7 – Pension and Other Postretirement Benefits](index=12&type=section&id=Note%207%20%E2%80%93%20Pension%20and%20Other%20Postretirement%20Benefits) Contributions to foreign defined benefit pension plans increased, and U.S. defined benefit plans showed improved net benefit income **Contributions to Employee Benefit Plans (in thousands):** | Plan Type | Three Months Ended March 31, 2022 | Three Months Ended March 31, 2021 | | :----------------------------------- | :-------------------------------- | :-------------------------------- | | U.S. defined benefit pension plans | $0 | $0 | | Foreign defined benefit pension plans | $642 | $171 | | Other postretirement benefits | $115 | $182 | | U.K. defined contribution pension plan | $71 | $82 | | U.S. defined contribution plan | $1,361 | $1,402 | - Net benefit income for U.S. Defined Benefit Pension Plans was **$(1,015) thousand** in Q1 2022, an improvement from **$(1,240) thousand** in Q1 2021, primarily due to expected return on plan assets[43](index=43&type=chunk) [Note 8 – Commitments and Contingent Liabilities](index=13&type=section&id=Note%208%20%E2%80%93%20Commitments%20and%20Contingent%20Liabilities) The Corporation has significant commitments for capital expenditures and outstanding letters of credit - Outstanding standby and commercial letters of credit totaled **$13,846 thousand** as of March 31, 2022, mainly collateralizing IRB debt[45](index=45&type=chunk) - The Corporation has commitments for future capital expenditures of approximately **$25,000 thousand** as of March 31, 2022, including a significant **$27,000 thousand** program to upgrade FCEP equipment over the next 18 months[45](index=45&type=chunk)[105](index=105&type=chunk) [Note 9 – Equity Rights Offering](index=13&type=section&id=Note%209%20%E2%80%93%20Equity%20Rights%20Offering) In Q1 2021, the Corporation received proceeds from warrant exercises, but no such proceeds were received in Q1 2022 - In Q1 2021, the Corporation received **$3,101 thousand** from shareholders exercising 1,208,192 Series A warrants, resulting in the issuance of 539,336 common shares[46](index=46&type=chunk)[106](index=106&type=chunk) - No proceeds were received from warrant exercises in Q1 2022[46](index=46&type=chunk)[106](index=106&type=chunk) [Note 10 – Accumulated Other Comprehensive Loss](index=13&type=section&id=Note%2010%20%E2%80%93%20Accumulated%20Other%20Comprehensive%20Loss) Accumulated other comprehensive loss increased, primarily due to foreign currency translation adjustments **Accumulated Other Comprehensive Loss (in thousands):** | Component | Balance at Jan 1, 2022 | Net Change | Balance at Mar 31, 2022 | | :------------------------------------------------ | :--------------------- | :--------- | :---------------------- | | Foreign Currency Translation | $(14,322) | $(2,614) | $(16,936) | | Unrecognized Employee Benefit Costs | $(40,563) | $511 | $(40,052) | | Cash Flow Hedges | $277 | $348 | $625 | | Total Accumulated Other Comprehensive Loss | $(54,608) | $(1,755) | $(56,363) | | Less: Noncontrolling Interest | $498 | $28 | $526 | | Accumulated Other Comprehensive Loss Attributable to Ampco-Pittsburgh | $(55,106) | $(1,783) | $(56,889) | - Accumulated other comprehensive loss attributable to Ampco-Pittsburgh increased by **$(1,783) thousand** during Q1 2022, primarily due to a **$(2,614) thousand** net change in foreign currency translation[48](index=48&type=chunk) [Note 11 – Derivative Instruments](index=14&type=section&id=Note%2011%20%E2%80%93%20Derivative%20Instruments) The Corporation uses futures contracts to hedge commodity prices, and foreign exchange transactions resulted in a significant gain - The Corporation uses futures contracts to hedge against commodity price increases (copper and aluminum) for its ALP segment, with **46%** of anticipated copper purchases and **56%** of anticipated aluminum purchases hedged as of March 31, 2022[53](index=53&type=chunk) - Gains on foreign exchange transactions included in other income – net equaled **$256 thousand** for Q1 2022, a significant improvement from a loss of **$(1,221) thousand** in Q1 2021[54](index=54&type=chunk) [Note 12 – Fair Value](index=15&type=section&id=Note%2012%20%E2%80%93%20Fair%20Value) Investments in other noncurrent assets are valued based on quoted prices in active markets **Fair Value of Investments (in thousands):** | Category | March 31, 2022 | December 31, 2021 | | :-------------------- | :------------- | :---------------- | | Other noncurrent assets | $4,521 | $4,860 | - Investments held as other noncurrent assets, primarily in a 'Rabbi' trust for pension benefits, are valued based on quoted prices in active markets (Level 1 inputs)[59](index=59&type=chunk) [Note 13 – Revenue and Income Before Income Taxes](index=16&type=section&id=Note%2013%20%E2%80%93%20Revenue%20and%20Income%20Before%20Income%20Taxes) U.S. net sales and income before taxes significantly improved, while forged engineered products sales saw substantial growth **Net Sales by Geographic Area (in thousands):** | Region | Three Months Ended March 31, 2022 | Three Months Ended March 31, 2021 | | :----------- | :-------------------------------- | :-------------------------------- | | United States | $51,278 | $44,482 | | Foreign | $43,148 | $42,318 | | Total | $94,426 | $86,800 | **Income Before Income Taxes by Geographic Area (in thousands):** | Region | Three Months Ended March 31, 2022 | Three Months Ended March 31, 2021 | | :----------- | :-------------------------------- | :-------------------------------- | | United States | $1,410 | $(61) | | Foreign | $255 | $756 | | Total | $1,665 | $695 | **Net Sales by Product Line (in thousands):** | Product Line | Three Months Ended March 31, 2022 | Three Months Ended March 31, 2021 | | :--------------------------- | :-------------------------------- | :-------------------------------- | | Forged and cast mill rolls | $60,707 | $58,166 | | Forged engineered products | $14,052 | $5,185 | | Centrifugal pumps | $7,300 | $10,042 | | Air handling systems | $6,609 | $7,350 | | Heat exchange coils | $5,758 | $6,057 | | Total | $94,426 | $86,800 | - U.S. net sales increased significantly from **$44,482 thousand** in Q1 2021 to **$51,278 thousand** in Q1 2022, and U.S. income before income taxes turned positive from a loss of **$(61) thousand** to a gain of **$1,410 thousand**[61](index=61&type=chunk)[62](index=62&type=chunk) - Forged engineered products sales saw a substantial increase from **$5,185 thousand** in Q1 2021 to **$14,052 thousand** in Q1 2022, while centrifugal pumps, air handling systems, and heat exchange coils experienced declines[63](index=63&type=chunk) [Note 14 – Stock-Based Compensation](index=16&type=section&id=Note%2014%20%E2%80%93%20Stock-Based%20Compensation) Stock-based compensation expense decreased, with the Omnibus Incentive Plan authorizing up to 2,700,000 shares for awards - Stock-based compensation expense decreased from **$546 thousand** in Q1 2021 to **$287 thousand** in Q1 2022[64](index=64&type=chunk) - The Ampco-Pittsburgh Corporation 2016 Omnibus Incentive Plan authorizes up to **2,700,000 shares** for awards[64](index=64&type=chunk) [Note 15 – Litigation](index=17&type=section&id=Note%2015%20%E2%80%93%20Litigation) Asbestos claims and associated costs increased, leading to an updated valuation of asbestos liabilities **Asbestos Claims Activity (Number of Claims):** | Metric | Three Months Ended March 31, 2022 | Three Months Ended March 31, 2021 | | :------------------------------------------ | :-------------------------------- | :-------------------------------- | | Total claims pending at beginning of period | 6,097 | 5,891 | | New claims served | 299 | 318 | | Claims dismissed | (80) | (141) | | Claims settled | (52) | (104) | | Total claims pending at end of period | 6,264 | 5,964 | | Total active claims at end of period | 3,439 | 3,077 | | Gross settlement and defense costs paid (in 000's) | $3,034 | $3,340 | | Avg. gross settlement and defense costs per claim resolved (in 000's) | $22.98 | $13.63 | **Asbestos Liability and Insurance Receivable (in thousands):** | Metric | Three Months Ended March 31, 2022 | Three Months Ended March 31, 2021 | | :---------------------------------------------------- | :-------------------------------- | :-------------------------------- | | Asbestos liability, beginning of the year | $180,314 | $180,196 | | Settlement and defense costs paid | $(3,034) | $(3,340) | | Asbestos liability, end of the period | $177,280 | $176,856 | | Insurance receivable – asbestos, beginning of the year | $121,297 | $117,937 | | Settlement and defense costs paid by insurance carriers | $(1,600) | $(2,075) | | Insurance receivable – asbestos, end of the period | $119,697 | $115,862 | - Total active asbestos claims increased to **3,439** at March 31, 2022, from 3,077 in the prior year[69](index=69&type=chunk) - The average gross settlement and defense costs per claim resolved increased significantly to **$22.98 thousand** in Q1 2022 from **$13.63 thousand** in Q1 2021[69](index=69&type=chunk) - The Corporation's asbestos liability was **$177,280 thousand** at March 31, 2022, with a corresponding insurance receivable of **$119,697 thousand**[72](index=72&type=chunk)[73](index=73&type=chunk)[74](index=74&type=chunk) - The valuation of asbestos liabilities was updated in Q4 2021, increasing the reserve by **$23,333 thousand** due to recent claim experience, including a higher proportion of mesothelioma claims[72](index=72&type=chunk)[73](index=73&type=chunk)[74](index=74&type=chunk) [Note 16 – Environmental Matters](index=19&type=section&id=Note%2016%20%E2%80%93%20Environmental%20Matters) The potential liability for environmental remedial actions and compliance measures remained consistent - The undiscounted potential liability for remedial actions and environmental compliance measures approximated **$100 thousand** at March 31, 2022, and December 31, 2021[76](index=76&type=chunk) [Note 17 – Related Parties](index=19&type=section&id=Note%2017%20%E2%80%93%20Related%20Parties) A loan from a minority shareholder was outstanding, with increased sales and decreased purchases from related parties **Related Party Transactions (in thousands):** | Metric | March 31, 2022 | December 31, 2021 | | :------------------------------------------------ | :------------- | :---------------- | | Loan outstanding from minority shareholder (ATR) | $742 | $0 | | Purchases from ATR's minority shareholder & affiliates | $2,058 | $2,942 | | Amount payable to ATR's minority shareholder & affiliates | $2,635 | $1,125 | | Customer deposits from ATR's minority shareholder & affiliates | $380 | $616 | | Sales to ATR's minority shareholder & affiliates | $2,248 | $2,083 | | Amount receivable from ATR's minority shareholder & affiliates | $866 | $0 | - A loan of **$742 thousand** was outstanding from Shanxi Åkers TISCO Roll Co., Ltd. (ATR)'s minority shareholder as of March 31, 2022[77](index=77&type=chunk) - Sales to related parties increased, while purchases from related parties decreased year-over-year[77](index=77&type=chunk) [Note 18 – Business Segments](index=19&type=section&id=Note%2018%20%E2%80%93%20Business%20Segments) FCEP segment sales significantly increased, while ALP segment sales decreased but saw improved income before taxes **Net Sales by Segment (in thousands):** | Segment | Three Months Ended March 31, 2022 | Three Months Ended March 31, 2021 | | :-------------------------------- | :-------------------------------- | :-------------------------------- | | Forged and Cast Engineered Products | $74,759 | $63,351 | | Air and Liquid Processing | $19,667 | $23,449 | | Total Reportable Segments | $94,426 | $86,800 | **Income Before Income Taxes by Segment (in thousands):** | Segment | Three Months Ended March 31, 2022 | Three Months Ended March 31, 2021 | | :-------------------------------- | :-------------------------------- | :-------------------------------- | | Forged and Cast Engineered Products | $1,298 | $1,846 | | Air and Liquid Processing | $2,661 | $2,312 | | Other expense, including corporate costs | $(2,294) | $(3,463) | | Total | $1,665 | $695 | - The Forged and Cast Engineered Products (FCEP) segment saw a significant increase in net sales to **$74,759 thousand** in Q1 2022 from **$63,351 thousand** in Q1 2021, while the Air and Liquid Processing (ALP) segment experienced a decrease in net sales[79](index=79&type=chunk) - ALP segment's income before income taxes increased to **$2,661 thousand** in Q1 2022 from **$2,312 thousand** in Q1 2021, while FCEP segment's income before income taxes decreased[79](index=79&type=chunk) [Item 2 – Management's Discussion and Analysis of Financial Condition and Results of Operations](index=20&type=section&id=Item%202%20%E2%80%93%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses the company's financial condition, operational results, and liquidity, highlighting segment performance and external impacts [Forward-Looking Statements](index=20&type=section&id=Forward-Looking%20Statements) The report contains forward-looking statements subject to risks from global events, demand cycles, and liabilities - The report includes forward-looking statements regarding future operating performance, sales, profitability, and the impact of global pandemics and international conflicts, subject to various risks and uncertainties[82](index=82&type=chunk) - Key risks include cyclical demand, commodity price increases, supply chain disruptions, and liabilities from asbestos claims[82](index=82&type=chunk) [The Business](index=21&type=section&id=The%20Business) Ampco-Pittsburgh operates in two segments: Forged and Cast Engineered Products (FCEP) and Air and Liquid Processing (ALP) - Ampco-Pittsburgh operates in two segments: Forged and Cast Engineered Products (FCEP), producing rolls and forged engineered products for metal industries, and Air and Liquid Processing (ALP), manufacturing heat exchange coils, air handling systems, and centrifugal pumps[85](index=85&type=chunk) [Executive Overview](index=21&type=section&id=Executive%20Overview) The Corporation faces ongoing global challenges, with FCEP recovering and ALP benefiting from demand despite cost pressures - The Corporation continues to face lingering effects of the COVID-19 pandemic and the Russia-Ukraine conflict, including global supply chain disruptions, inflationary pressures, and transportation delays[86](index=86&type=chunk) - FCEP segment's roll and FEP markets have recovered, with a focus on diversification, operational improvements, and capital equipment investment to reduce costs and increase capacity[87](index=87&type=chunk) - ALP segment is benefiting from increasing demand but is also impacted by rising production and transportation costs and supply chain issues, with a focus on revenue growth, engineering capabilities, and sales distribution[87](index=87&type=chunk) [Selected Financial Information](index=22&type=section&id=Selected%20Financial%20Information) Consolidated net sales and operating income increased, driven by FCEP and a benefit from employee benefit policy changes **Selected Financial Information (in thousands):** | Metric | Three Months Ended March 31, 2022 | Three Months Ended March 31, 2021 | Change | | :------------------------------------------ | :-------------------------------- | :-------------------------------- | :----- | | Net Sales | $94,426 | $86,800 | $7,626 | | Income from Operations | $1,243 | $907 | $336 | | Backlog (as of period end) | $327,539 | $292,554 | $34,985 | **Operating Costs and Expenses as % of Net Sales:** | Metric | Three Months Ended March 31, 2022 | Three Months Ended March 31, 2021 | | :---------------------------------------------------- | :-------------------------------- | :-------------------------------- | | Costs of products sold (excluding depreciation and amortization) | 83.5% | 80.2% | | Selling and administrative expenses | $9,878 | $11,558 | - Consolidated net sales increased by **$7,626 thousand** year-over-year, primarily driven by the FCEP segment[89](index=89&type=chunk)[90](index=90&type=chunk) - Operating income increased by **$336 thousand**, including a **$1,431 thousand** benefit from a change in employee benefit policy[89](index=89&type=chunk)[90](index=90&type=chunk) - Backlog significantly increased by **$34,985 thousand** to **$327,539 thousand** at March 31, 2022, indicating strong future demand[90](index=90&type=chunk)[91](index=91&type=chunk) - Costs of products sold as a percentage of net sales increased to **83.5%** due to higher raw material, energy, and transportation costs, partially offset by price increases and surcharges[90](index=90&type=chunk)[91](index=91&type=chunk) - Selling and administrative expenses decreased by **$1,680 thousand**, mainly due to the Change in Employee Benefit Policy, lower R&D, and favorable foreign exchange rates[93](index=93&type=chunk) - Net income attributable to Ampco-Pittsburgh increased to **$1,645 thousand** (**$0.09 EPS**) in Q1 2022, including an after-tax benefit of **$1,410 thousand** (**$0.07 EPS**) from the Change in Employee Benefit Policy[95](index=95&type=chunk) [Net Sales and Operating Results by Segment](index=23&type=section&id=Net%20Sales%20and%20Operating%20Results%20by%20Segment) This section details the net sales and operating results for the Forged and Cast Engineered Products (FCEP) and Air and Liquid Processing (ALP) segments [Forged and Cast Engineered Products (FCEP)](index=23&type=section&id=Forged%20and%20Cast%20Engineered%20Products%20%28FCEP%29) FCEP net sales increased significantly due to pricing and FEP volume, despite a decrease in operating income **FCEP Segment Performance (in thousands):** | Metric | Three Months Ended March 31, 2022 | Three Months Ended March 31, 2021 | Change | | :--------------------------- | :-------------------------------- | :-------------------------------- | :----- | | Net Sales | $74,759 | $63,351 | $11,408 | | Forged and cast mill rolls | $60,707 | $58,166 | $2,541 | | FEP | $14,052 | $5,185 | $8,867 | | Income from Operations | $1,298 | $1,846 | $(548) | | Backlog (as of period end) | $239,748 | $223,321 | $16,427 | - FCEP net sales increased by **$11,408 thousand**, driven by higher pricing and surcharges (**$13,700 thousand**) and increased FEP shipment volume (**$5,500 thousand**), despite lower mill roll volume and negative foreign exchange impacts[97](index=97&type=chunk) - Operating income decreased by **$548 thousand** due to lower mill roll shipments, partially offset by **$562 thousand** in savings from the Change in Employee Benefit Policy[98](index=98&type=chunk) - Backlog increased by **$16,427 thousand**, primarily from increased orders for forged rolls (**$16,400 thousand**) and price increases (**$8,500 thousand**), offset by strong Q1 FEP sales and negative foreign exchange rates[98](index=98&type=chunk) [Air and Liquid Processing (ALP)](index=24&type=section&id=Air%20and%20Liquid%20Processing%20%28ALP%29) ALP net sales decreased due to supply chain delays, but operating income improved, and backlog significantly increased **ALP Segment Performance (in thousands):** | Metric | Three Months Ended March 31, 2022 | Three Months Ended March 31, 2021 | Change | | :--------------------------- | :-------------------------------- | :-------------------------------- | :----- | | Net Sales | $19,667 | $23,449 | $(3,782) | | Centrifugal pumps | $7,300 | $10,042 | $(2,742) | | Air handling systems | $6,609 | $7,350 | $(741) | | Heat exchange coils | $5,758 | $6,057 | $(299) | | Income from Operations | $2,661 | $2,312 | $349 | | Backlog (as of period end) | $87,791 | $69,233 | $18,558 | - ALP net sales decreased by **$3,782 thousand**, mainly due to lower shipments of centrifugal pumps and air handling systems caused by supply chain delays and customer delivery timing[99](index=99&type=chunk) - Operating income improved by **$349 thousand**, benefiting from the Change in Employee Benefit Policy (**$680 thousand**), despite lower sales volumes[99](index=99&type=chunk) - Backlog increased by **$18,558 thousand**, with all product lines improving, including a significant **$9,600 thousand** order for a custom air handling unit project[99](index=99&type=chunk) [Non-GAAP Financial Measures](index=24&type=section&id=Non-GAAP%20Financial%20Measures) The Corporation presents adjusted non-GAAP operating results to exclude a one-time employee benefit policy change **Reconciliation of Income from Operations to Non-GAAP Adjusted (Loss) Income from Operations (in thousands):** | Metric | Three Months Ended March 31, 2022 | Three Months Ended March 31, 2021 | | :------------------------------------------------ | :-------------------------------- | :-------------------------------- | | Income from operations, as reported (GAAP) | $1,243 | $907 | | Change in Employee Benefit Policy | $(1,431) | $0 | | (Loss) income from operations, as adjusted (Non-GAAP) | $(188) | $907 | - The Corporation presents non-GAAP adjusted (loss) income from operations, excluding a one-time **$1,431 thousand** benefit from the Change in Employee Benefit Policy, to provide a clearer view of ongoing operating performance[100](index=100&type=chunk)[101](index=101&type=chunk)[103](index=103&type=chunk) [Liquidity and Capital Resources](index=26&type=section&id=Liquidity%20and%20Capital%20Resources) Operating cash flow significantly decreased due to working capital investment, offset by financing activities **Cash Flow Summary (in thousands):** | Metric | Three Months Ended March 31, 2022 | Three Months Ended March 31, 2021 | Change | | :------------------------------------------------ | :-------------------------------- | :-------------------------------- | :------- | | Net cash flows (used in) provided by operating activities | $(16,272) | $1,858 | $(18,130) | | Net cash flows used in investing activities | $(3,330) | $(2,303) | $(1,027) | | Net cash flows provided by financing activities | $16,228 | $2,172 | $14,056 | | Net (decrease) increase in cash and cash equivalents | $(3,552) | $1,409 | $(4,961) | | Cash and cash equivalents at end of period | $6,785 | $18,251 | $(11,466) | - Net cash used in operating activities significantly increased to **$(16,272) thousand** in Q1 2022, primarily due to higher investment in trade working capital driven by increased business activity, inflation, and supply chain disruptions[104](index=104&type=chunk) - Net cash provided by financing activities improved to **$16,228 thousand**, mainly due to net borrowings from the revolving credit facility (**$15,743 thousand**) and related party debt, offsetting lower proceeds from warrant exercises[106](index=106&type=chunk) - Cash and cash equivalents decreased by **$3,552 thousand** to **$6,785 thousand** at March 31, 2022[107](index=107&type=chunk)[108](index=108&type=chunk) - The Corporation expects funds on hand, future operations, and revolving credit facility availability (**$33,000 thousand** remaining) to be sufficient for operational requirements[107](index=107&type=chunk)[108](index=108&type=chunk) [Litigation and Environmental Matters](index=27&type=section&id=Litigation%20and%20Environmental%20Matters) Details on litigation and environmental matters are incorporated by reference from the financial statement notes - Refer to Note 15 for details on asbestos litigation and Note 16 for environmental matters[109](index=109&type=chunk) [Critical Accounting Pronouncements](index=27&type=section&id=Critical%20Accounting%20Pronouncements) The Corporation's critical accounting policies remain consistent with the prior annual report - The Corporation's critical accounting policies remain unchanged from its Annual Report on Form 10-K for the year ended December 31, 2021[109](index=109&type=chunk) [Recently Issued Accounting Pronouncements](index=27&type=section&id=Recently%20Issued%20Accounting%20Pronouncements) Information on recently issued accounting pronouncements, specifically ASU 2016-13 (CECL model), is provided in Note 1 - Refer to Note 1 for information on recently issued accounting pronouncements, specifically ASU 2016-13 (CECL model)[109](index=109&type=chunk) [Item 3 – Quantitative and Qualitative Disclosures About Market Risk](index=27&type=section&id=Item%203%20%E2%80%93%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) No applicable quantitative and qualitative disclosures about market risk are reported for this period - The Corporation has no applicable quantitative and qualitative disclosures about market risk for this reporting period[109](index=109&type=chunk) [Item 4 – Controls and Procedures](index=27&type=section&id=Item%204%20%E2%80%93%20Controls%20and%20Procedures) Management concluded disclosure controls were effective as of March 31, 2022, with no material changes in internal control - The Corporation's management, including the principal executive and financial officers, concluded that disclosure controls and procedures were effective as of March 31, 2022[110](index=110&type=chunk) - No material changes in internal control over financial reporting were identified during the last fiscal quarter[111](index=111&type=chunk) Part II – Other Information [Item 1 Legal Proceedings](index=28&type=section&id=Item%201%20Legal%20Proceedings) Legal proceedings, primarily asbestos litigation, are incorporated by reference from Note 15 to the financial statements - Information on legal proceedings is incorporated by reference from Note 15 to the condensed consolidated financial statements, primarily concerning asbestos litigation[113](index=113&type=chunk) [Item 1A Risk Factors](index=28&type=section&id=Item%201A%20Risk%20Factors) No material changes to risk factors were reported from the Annual Report on Form 10-K for December 31, 2021 - There are no material changes to the Risk Factors from the Corporation's Annual Report on Form 10-K for the year ended December 31, 2021[114](index=114&type=chunk) [Item 6 Exhibits](index=28&type=section&id=Item%206%20Exhibits) This section lists all exhibits filed with the Form 10-Q, including organizational documents, agreements, and certifications - The report includes various exhibits such as Restated Articles of Incorporation, Amended and Restated By-laws, Cooperation Agreement, certifications of principal officers, and Inline XBRL documents[115](index=115&type=chunk)

Ampco-Pittsburgh Corporation (NYSE:AP) Q4 2021 Earnings Conference Call March 16, 2022 10:30 AM ET Company Participants Melanie Sprowson - Director, Investor Relations Brett McBrayer - Chief Executive Officer Mike McAuley - Senior Vice President, Chief Financial Officer and Treasurer Sam Lyon - President, Union Electric Steel Corporation Dave Anderson - President, Air & Liquid Systems Corporation Conference Call Participants David Wright - Henry Investment Trust Justin Bergner - Gabelli Funds Operator Good ...

Ampco-Pittsburgh Corporation (NYSE:AP) Q3 2021 Earnings Conference Call November 4, 2021 10:30 AM ET Company Participants Melanie Sprowson - Director, Investor Relations Brett McBrayer - Chief Executive Officer Mike McAuley - Senior Vice President, Chief Financial Officer and Treasurer Sam Lyon - President, Union Electric Steel Corporation Terry Kenny - President, Air & Liquid Systems Corporation Conference Call Participants David Wright - Henry Investment Trust Justin Bergner - Gabelli Funds George Melas-K ...

Ampco-Pittsburgh Corp (NYSE:AP) Q1 2021 Earnings Conference Call August 10, 2021 10:30 AM ET Company Participants Melanie Sprowson - Director, IR & Corporate Secretary Brett McBrayer - CEO & Director Terrence Kenny - President, Air & Liquid Systems Corporation Samuel Lyon - President, Union Electric Steel Corporation Michael McAuley - SVP, CFO & Treasurer Conference Call Participants David Wright - Henry Investment Trust Justin Bergner - Gabelli Funds Operator Good day, and welcome to the Ampco-Pittsburgh C ...

Financial Performance - Net sales for the three months ended June 30, 2021, were $92,428,000, an increase of 23.5% compared to $74,778,000 for the same period in 2020[9]. - Net income attributable to Ampco-Pittsburgh for the three months ended June 30, 2021, was $1,063,000, compared to $668,000 for the same period in 2020, representing a 59.1% increase[9]. - The company reported operating costs and expenses of $91,959,000 for the three months ended June 30, 2021, up from $74,864,000 in the same period of 2020, marking a 22.8% increase[9]. - Basic net income per share attributable to Ampco-Pittsburgh common shareholders for the three months ended June 30, 2021, was $0.06, compared to $0.05 for the same period in 2020[9]. - Comprehensive income for the three months ended June 30, 2021, was $2,861,000, compared to $4,618,000 for the same period in 2020[12]. - For the three months ended June 30, 2021, net income was $1,224 thousand, compared to $861 thousand for the same period in 2020, representing a 42.2% increase[15]. - The total comprehensive income for the six months ended June 30, 2021, was $2,717 thousand, up from $4,823 thousand for the same period in 2020, indicating a decrease of 43.6%[15]. Assets and Liabilities - Total current assets increased to $185,953,000 as of June 30, 2021, from $171,832,000 as of December 31, 2020, reflecting an increase of 8.2%[6]. - Total liabilities decreased slightly to $377,346,000 as of June 30, 2021, from $378,209,000 as of December 31, 2020, a reduction of 0.2%[6]. - The company’s total shareholders' equity increased to $91,608,000 as of June 30, 2021, from $84,999,000 as of December 31, 2020, an increase of 7.5%[6]. - Cash and cash equivalents decreased to $13,313,000 as of June 30, 2021, from $16,842,000 as of December 31, 2020, a decline of 20.0%[6]. - As of June 30, 2021, total inventories increased to $78.935 million from $73.243 million as of December 31, 2020, representing a growth of approximately 7.5%[29]. - Property, plant, and equipment net value decreased to $158.621 million as of June 30, 2021, from $162.098 million as of December 31, 2020, a decline of about 2.9%[31]. - Intangible assets net value decreased to $6.654 million as of June 30, 2021, from $7.217 million as of December 31, 2020, a reduction of approximately 7.8%[32]. Cash Flow and Investments - Cash flows from operating activities for the six months ended June 30, 2021, were $(2,754) thousand, a significant decline compared to $31,435 thousand for the same period in 2020[17]. - The company reported a net cash flow used in investing activities of $(6,536) thousand for the six months ended June 30, 2021, compared to $(3,200) thousand for the same period in 2020[17]. - The total cash and cash equivalents at the end of the period on June 30, 2021, were $13,313 thousand, down from $15,874 thousand at the end of June 30, 2020[17]. - The company incurred stock-based compensation of $1,028 thousand for the six months ended June 30, 2021, compared to $477 thousand for the same period in 2020, reflecting a 115.5% increase[15]. Segment Performance - The FCEP segment produces forged hardened steel rolls and cast rolls, primarily serving the steel, aluminum, and other metal industries, with operations in the U.S., England, Sweden, and Slovenia[20]. - The ALP segment includes divisions that manufacture custom-engineered heat exchange coils, air handling systems, and centrifugal pumps, serving various industries including power generation and industrial manufacturing[21]. - Net sales for the Forged and Cast Engineered Products segment increased to $71,028 thousand in Q2 2021 from $50,460 thousand in Q2 2020, representing a growth of 40.9%[86]. - Total reportable segments' net sales reached $92,428 thousand in Q2 2021, up from $74,778 thousand in Q2 2020, marking a 23.5% increase[86]. - Income before income taxes for the total reportable segments improved to $3,736 thousand in Q2 2021 from $2,423 thousand in Q2 2020, reflecting a 54.1% increase[86]. Asbestos Liability - Total active asbestos claims at the end of the six months ended June 30, 2021, were 3,159, a decrease from 6,254 claims at the end of the same period in 2020[76]. - The reserve for Asbestos Liability at June 30, 2021, was $170.78 million, down from $227.92 million at December 31, 2018[81]. - Insurance receivable for asbestos claims at the end of the six months ended June 30, 2021, was $112.28 million, compared to $125.11 million at the end of the same period in 2020[82]. - The average gross settlement and defense costs per claim resolved for the six months ended June 30, 2021, was $20.09 thousand, significantly lower than $47.71 thousand in 2020[76]. - New asbestos claims served during the six months ended June 30, 2021, totaled 642, an increase from 492 claims in the same period of 2020[76]. Debt and Financing - Outstanding borrowings as of June 30, 2021, totaled $40,882 million, an increase of 10% from $37,243 million on December 31, 2020[39]. - The Revolving Credit and Security Agreement had outstanding borrowings of $10,131 million as of June 30, 2021, with an average interest rate of approximately 4% for the six months ended June 30, 2021[41]. - The Corporation's long-term debt increased to $26,613 million as of June 30, 2021, from $24,807 million as of December 31, 2020[39]. - The Corporation's commitments for future capital expenditures, including a significant capital program, approximated $18,400 million as of June 30, 2021[51]. Foreign Sales and Currency - Foreign net sales for the six months ended June 30, 2021, reached $90,854 million, up from $86,054 million in 2020, reflecting a growth of 3.3%[66]. - The corporation hedged approximately $2,362 million of anticipated foreign-denominated sales as of June 30, 2021, with fair value contracts settling through January 2022[57]. - Gains on foreign exchange transactions included in other income for the three months ended June 30, 2021, were $147 million, compared to $633 million for the same period in 2020[58]. - The fair value of foreign currency sales contracts recorded as of June 30, 2021, was $712 million, down from $1,123 million as of December 31, 2020[59]. Stock-Based Compensation - Stock-based compensation expense for the three months ended June 30, 2021, was $482,000, up from $113,000 in the same period of 2020, representing a 326.5% increase[72]. - The company approved an amendment to its 2016 Omnibus Incentive Plan to issue an additional 1.6 million shares, increasing the total authorized shares to 2.7 million[72].