Ampco-Pittsburgh(AP) - 2019 Q2 - Quarterly Report

Part I – Financial Information This section presents unaudited financial statements and management's analysis of financial condition and results Item 1 – Financial Statements (Unaudited) This section presents the unaudited condensed consolidated financial statements for Ampco-Pittsburgh Corporation, including balance sheets, statements of operations, comprehensive income (loss), shareholders' equity, and cash flows. It also includes detailed notes explaining accounting policies, discontinued operations, inventory, property, intangible assets, liabilities, borrowing arrangements, pension benefits, commitments, derivative instruments, fair value measurements, revenue disaggregation, stock-based compensation, litigation, environmental matters, and business segments Condensed Consolidated Balance Sheets This statement provides a snapshot of the company's assets, liabilities, and shareholders' equity at specific points in time | Metric (in thousands) | June 30, 2019 | December 31, 2018 | | :-------------------- | :------------ | :---------------- | | Total assets | $548,570 | $571,119 | | Total liabilities | $469,818 | $478,150 | | Total shareholders' equity | $78,752 | $92,969 | - Total assets decreased by $22,549 thousand (3.9%) from December 31, 2018, to June 30, 2019, primarily due to decreases in cash and cash equivalents, property, plant and equipment, and intangible assets[6] - Current liabilities decreased by $21,463 thousand (12.8%) from December 31, 2018, to June 30, 2019, largely driven by a significant reduction in the current portion of debt[6] Condensed Consolidated Statements of Operations This statement details the company's revenues, expenses, and net loss over specific reporting periods | Metric (in thousands) | Three Months Ended June 30, 2019 | Three Months Ended June 30, 2018 | Six Months Ended June 30, 2019 | Six Months Ended June 30, 2018 | | :-------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Net sales | $102,519 | $118,371 | $210,013 | $224,786 | | Loss from continuing operations | $(653) | $(189) | $(12,612) | $(1,966) | | Net loss | $(3,612) | $(2,700) | $(18,405) | $(1,311) | | Net loss attributable to Ampco-Pittsburgh | $(3,858) | $(2,994) | $(19,006) | $(2,053) | | Basic Net loss per common share | $(0.31) | $(0.24) | $(1.52) | $(0.17) | - Net sales decreased by 13.4% for the three months and 6.6% for the six months ended June 30, 2019, compared to the prior year periods[9] - Net loss attributable to Ampco-Pittsburgh significantly increased to $(19,006) thousand for the six months ended June 30, 2019, from $(2,053) thousand in the prior year, primarily due to a $10,082 thousand impairment charge and $1,366 thousand bad debt expense[9][92][101] Condensed Consolidated Statements of Comprehensive Income (Loss) This statement presents the net loss and other comprehensive income or loss components, leading to total comprehensive loss | Metric (in thousands) | Three Months Ended June 30, 2019 | Three Months Ended June 30, 2018 | Six Months Ended June 30, 2019 | Six Months Ended June 30, 2018 | | :-------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Net loss | $(3,612) | $(2,700) | $(18,405) | $(1,311) | | Other comprehensive (loss) income | $(1,842) | $(5,539) | $3,304 | $(3,848) | | Comprehensive loss | $(5,454) | $(8,239) | $(15,101) | $(5,159) | | Comprehensive loss attributable to Ampco-Pittsburgh | $(5,565) | $(8,348) | $(15,700) | $(5,867) | - Other comprehensive income showed a positive change of $3,304 thousand for the six months ended June 30, 2019, compared to a loss of $(3,848) thousand in the prior year, mainly driven by unrecognized employee benefit costs[11] Condensed Consolidated Statements of Shareholders' Equity This statement tracks changes in the company's equity accounts, including common stock, retained deficit, and accumulated other comprehensive loss | Metric (in thousands) | Balance January 1, 2019 | Balance June 30, 2019 | | :-------------------- | :---------------------- | :-------------------- | | Common Stock | $12,495 | $12,624 | | Additional Paid-in Capital | $154,889 | $155,644 | | Retained Deficit | $(30,355) | $(49,361) | | Accumulated Other Comprehensive Loss | $(49,434) | $(46,128) | | Total Ampco-Pittsburgh shareholders' equity | $87,595 | $72,779 | - Total Ampco-Pittsburgh shareholders' equity decreased by $14,816 thousand from January 1, 2019, to June 30, 2019, primarily due to a net loss of $(19,006) thousand, partially offset by other comprehensive income and stock-based compensation[13] Condensed Consolidated Statements of Cash Flows This statement reports the cash generated and used by the company across operating, investing, and financing activities | Metric (in thousands) | Six Months Ended June 30, 2019 | Six Months Ended June 30, 2018 | | :-------------------- | :----------------------------- | :----------------------------- | | Net cash flows used in operating activities - continuing operations | $(8,165) | $(5,206) | | Net cash flows used in investing activities - continuing operations | $(3,639) | $(4,226) | | Net cash flows (used in) provided by financing activities - continuing operations | $(1,245) | $12,494 | | Net (decrease) increase in cash and cash equivalents | $(13,433) | $1,448 | | Cash and cash equivalents at end of period | $7,404 | $22,148 | - Net cash used in operating activities for continuing operations increased to $(8,165) thousand for the six months ended June 30, 2019, from $(5,206) thousand in the prior year, mainly due to additional investment in trade working capital[15][112] - Cash and cash equivalents decreased by $13,433 thousand during the six months ended June 30, 2019, resulting in an end-of-period balance of $7,404 thousand[15][117] Notes to Condensed Consolidated Financial Statements This section provides detailed explanations and disclosures supporting the condensed consolidated financial statements 1. Unaudited Condensed Consolidated Financial Statements The financial statements are unaudited and include normal recurring adjustments. ASW Steel Inc. has been presented as discontinued operations. The Corporation adopted ASU 2017-12 (Derivatives and Hedging) and ASU 2016-02 (Leases) effective January 1, 2019, with the latter resulting in the recognition of operating lease ROU assets and liabilities - ASW Steel Inc. is presented as discontinued operations following a Board approval in October 2018 to sell the entity[17] - The Corporation adopted ASU 2016-02 (Leases) on January 1, 2019, recognizing an operating lease ROU asset and liability of $5,893 thousand[17] 2. Discontinued Operations and Disposition The Corporation approved the sale of ASW Steel Inc. due to significant losses from a key customer loss and U.S. tariffs, classifying it as discontinued operations. Additionally, a plan to sell certain assets of the Avonmore, PA cast roll manufacturing facility (ANR) was approved, resulting in a $10,082 thousand impairment loss - ASW Steel Inc. was approved for sale in October 2018 due to significant losses