Ampco-Pittsburgh Stock Gains Post Strong Q3 Earnings and Restructuring

Core Viewpoint - Ampco-Pittsburgh Corporation (AP) has demonstrated significant financial improvement in its third-quarter 2025 results, with a notable stock performance that outpaced the S&P 500 Index, indicating strong market confidence in the company's strategic direction and operational efficiency [1][2]. Financial Performance - Net sales increased by 12.3% to $108 million from $96.2 million year-over-year, driven by higher shipment volumes in the Air and Liquid Processing (ALP) segment and improved pricing in the Forged and Cast Engineered Products (FCEP) segment [2]. - Adjusted EBITDA rose 34.9% to $9.2 million from $6.8 million, with the adjusted EBITDA margin expanding to 8.53% from 7.10% in the prior year [2]. - Adjusted earnings per share improved to $0.04, a $0.14 increase from a loss of $0.10 per share in the previous year [3]. Segment Performance - The ALP segment achieved a revenue increase of 26.2% to $36.5 million, with adjusted EBITDA rising 31% to $4.4 million, supported by strong demand in nuclear, naval, and pharmaceutical markets [4]. - In the FCEP segment, net sales were $71.5 million, a 6.3% increase from $67.2 million, although sequentially lower due to typical summer shutdowns [5]. Cost Management - Company-wide selling and administrative expenses decreased by 4.5% year-over-year, attributed to lower employee-related costs [6]. - Interest expenses remained stable, and the income tax provision decreased due to a reduced statutory tax rate in one foreign jurisdiction [6]. Management Insights - Management highlighted that the strengthened operating performance and strategic exit decisions position the company for sustainably higher profitability, with expectations of increased adjusted EBITDA by $7 million–$8 million from the U.K. exit [7]. - There is growing momentum in multiple end markets, particularly in nuclear power and pharmaceutical manufacturing, which are expected to drive long-term demand [7]. Future Outlook - The company anticipates gradual normalization in roll ordering patterns and expects to benefit from broader industrial trends, including construction spending and automotive production [8]. - The accelerated exit from the U.K. cast roll facility and the planned exit from a small steel distribution business are expected to materially improve profitability starting in the fourth quarter of 2025 [12]. Restructuring Actions - Key restructuring actions included placing the U.K. cast roll plant into administration to halt further losses and initiating the exit from the Alloys Unlimited steel distribution business [13]. - The liquidation of the U.K. facility is expected to generate $8 million–$9 million in proceeds to reduce revolver borrowings [13].