Ampco-Pittsburgh(AP) - 2024 Q2 - Quarterly Results

Financial Highlights Ampco-Pittsburgh achieved strong sequential earnings improvement in Q2 2024, driven by a 53% year-over-year increase in operating income and 19% sales growth in the Air and Liquid Processing segment - Delivered strong sequential earnings improvement, reaching the high end of the previous guidance range[1] - The prior year's results for the three and six months ended June 30, 2023, included a $1.9 million benefit from a foreign energy credit, which improved EPS by $0.10 in that period[2][4] | Metric | Q2 2024 ($M) | Q2 2023 ($M) | YTD 2024 ($M) | YTD 2023 ($M) | | :--- | :--- | :--- | :--- | :--- | | Net Sales | 111.0 | 107.2 | 221.2 | 212.0 | | Operating Income | 5.0 | 3.3 | 5.1 | 5.3 | | Net Income (attributable) | 2.0 | 0.4 | (0.7) | 1.1 | | Diluted EPS ($/share) | 0.10 | 0.02 | (0.04) | 0.06 | Consolidated Financial Performance Consolidated financial performance improved in Q2 2024 due to higher net roll pricing, despite challenges from European cast roll losses, weak forged product markets, and increased interest expenses - The underlying improvement in operating income is primarily attributed to higher net roll pricing in the Forged and Cast Engineered Products segment[2] - CEO commentary points to a strong quarter reflecting current potential, with new machinery running and a rebound in Air and Liquid Processing margins; however, challenges persist with losses in the European cast roll business and a weak market for forged engineered products[3] - Interest expense increased year-over-year for both the three and six-month periods due to higher equipment financing debt, increased revolving credit borrowings, and higher average interest rates[3][4] Segment Performance Analysis The Forged and Cast Engineered Products segment improved operating results despite slight sales decline, while Air and Liquid Processing achieved 19% sales growth, tempered by unfavorable product mix and higher expansion costs Forged and Cast Engineered Products Sales for this segment slightly declined due to lower shipment volumes, offset by improved pricing and product mix, leading to improved operating results - Sales declined slightly due to lower shipment volume, offset by improved pricing and favorable product mix[5] - Operating results improved year-over-year due to better pricing and manufacturing cost fluctuations; the prior-year periods included a $1.9 million benefit from a foreign energy credit[5] | Period | Net Sales 2024 ($M) | Net Sales 2023 ($M) | | :--- | :--- | :--- | | Three Months | 75.7 | 77.6 | | Six Months | 152.9 | 154.4 | Air and Liquid Processing This segment achieved a strong 19% sales increase driven by expanded distribution and a new facility, though operating income was impacted by unfavorable product mix and higher expansion costs - Sales improved 19% for both the three and six-month periods, driven by increased shipments from an expanded sales network and a new manufacturing facility[6] - Operating results were negatively impacted by an unfavorable product mix of heat exchangers and centrifugal pumps, as well as higher commissions, employee costs, and lease costs associated with expansion[7] | Period | Net Sales 2024 ($M) | Net Sales 2023 ($M) | | :--- | :--- | :--- | | Three Months | 35.3 | 29.6 | | Six Months | 68.3 | 57.6 | Financial Statements This section presents detailed unaudited consolidated financial summaries and segment-level net sales and operating income for Ampco-Pittsburgh Corporation Financial Summary (Consolidated) This consolidated financial summary details the company's income statement, including revenues, costs, operating income, and net income attributable to shareholders | (in thousands) | Three Months Ended June 30, 2024 | Three Months Ended June 30, 2023 | Six Months Ended June 30, 2024 | Six Months Ended June 30, 2023 | | :--- | :--- | :--- | :--- | :--- | | Total net sales | 110,988 | 107,211 | 221,203 | 212,014 | | Income from operations | 5,043 | 3,288 | 5,125 | 5,281 | | Net income (loss) attributable to Ampco-Pittsburgh | 2,012 | 423 | (705) | 1,099 | | Diluted net income (loss) per share ($/share) | 0.10 | 0.02 | (0.04) | 0.06 | Segment Information This table details the financial performance of the company's two primary operating segments, presenting net sales and operating income contributions Net Sales by Segment (in thousands) | Segment | Q2 2024 ($K) | Q2 2023 ($K) | YTD 2024 ($K) | YTD 2023 ($K) | | :--- | :--- | :--- | :--- | :--- | | Forged and Cast Engineered Products | 75,713 | 77,581 | 152,902 | 154,379 | | Air and Liquid Processing | 35,275 | 29,630 | 68,301 | 57,635 | | Consolidated | 110,988 | 107,211 | 221,203 | 212,014 | Operating Income by Segment (in thousands) | Segment | Q2 2024 ($K) | Q2 2023 ($K) | YTD 2024 ($K) | YTD 2023 ($K) | | :--- | :--- | :--- | :--- | :--- | | Air and Liquid Processing | 3,174 | 2,977 | 5,156 | 5,930 | | Corporate costs | (3,492) | (3,593) | (6,968) | (6,777) | | Consolidated | 5,043 | 3,288 | 5,125 | 5,281 | Conference Call Information Ampco-Pittsburgh will host a conference call on August 13, 2024, at 10:30 a.m. ET to discuss Q2 financial results, with pre-registration and replay options available - A conference call to discuss Q2 2024 financial results is scheduled for Tuesday, August 13, 2024, at 10:30 a.m. ET[8] - Participants are encouraged to pre-register online or can dial in using the provided toll-free and international numbers[8] Company Overview and Forward-Looking Statements Ampco-Pittsburgh manufactures specialty metal products and customized equipment globally, with the report including a standard disclaimer on forward-looking statements and associated risks - The company is a leading producer of forged and cast rolls for the global steel and aluminum industries and also produces air and liquid processing equipment[9] - The press release contains forward-looking statements that are subject to risks and uncertainties, including cyclical demand, excess global capacity in the steel industry, and fluctuations in commodity prices[10]