Financial Data and Key Metrics Changes - The company achieved an operating income of $6.4 million in 2020, a significant improvement of $17.4 million compared to a loss of $10.9 million in 2019 [9] - Net income for 2020 was $8 million, representing a $29 million improvement from a loss of $21 million in 2019, resulting in earnings per share of $0.56 compared to a loss of $1.67 in the previous year [9][23] - Free cash flow from continuing operations was $33.6 million in 2020, and total debt was reduced by approximately $44 million or 47% during the year [10][28] Business Line Data and Key Metrics Changes - The Forged and Cast Engineered Products segment reported net sales of $64.2 million for Q4 2020, a decline of nearly 14% compared to the prior year, primarily due to lower shipment volumes [20][24] - The Air and Liquid Processing segment had net sales of $22.9 million in Q4 2020, which was marginally higher than the prior year period despite the pandemic [20][25] - The segment backlog at the end of 2020 was approximately $246 million, a decline of 23% from $321 million at the end of 2019, mainly due to customer order postponements [26] Market Data and Key Metrics Changes - The company experienced a decrease in orders received for the fourth quarter, particularly in the heat exchanger and air handling businesses, which faced competitive pricing pressures [12] - The backlog for the Air and Liquid Processing segment improved, driven by centrifugal pumps, while the Forged and Cast Engineered Products segment backlog declined due to pandemic-related uncertainties [13][26] Company Strategy and Development Direction - The company is focused on improving shareholder returns while ensuring employee health and safety, with a commitment to reducing workplace injuries [7][8] - Plans for 2021 include cautiously optimistic expectations for increased order activity levels as pandemic impacts subside, alongside ongoing equipment upgrade initiatives to reduce costs and grow revenue [10][45] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the challenges posed by the pandemic but expressed pride in the team's ability to adapt and maintain operations [7][8] - The company anticipates that customer sentiment for 2021 is strong, with expectations for revenue to be around the midpoint of 2019 and 2020 levels [17] Other Important Information - The company reported a significant reduction in selling and administrative expenses, achieving a 10% year-over-year reduction in Q4 2020 [21] - The cash balance at December 31, 2020, was $16.8 million, with total debt decreasing to $37.2 million [27][28] Q&A Session Summary Question: What was the gross cash balance at December 31? - The cash balance at December 31, 2020, was $16.8 million [31] Question: How much temporary cost reduction should be expected in 2021? - The company has been able to flex down costs primarily related to hourly workers, with expectations for reduced travel expenses moving forward [32][34] Question: What is the progress on the Forged and Cast Engineered Products segment? - The company has seen a return in oil and gas orders, with shipments and backlog already equal to the total shipments for the previous year, indicating strong growth potential [36][37] Question: What was the impact of Navy business on Buffalo Pumps? - The Navy business remained strong and was relatively flat between 2019 and 2020 [41] Question: Can you provide details on the equipment upgrade initiatives? - The company is actively placing orders for equipment upgrades and is focused on expediting these improvements to enhance the Forged and Cast Engineered Products segment [45]
Ampco-Pittsburgh(AP) - 2020 Q4 - Earnings Call Transcript