Ampco-Pittsburgh(US:AP)2020-08-09 10:21Financial Data and Key Metrics Changes - The company reported earnings per share (EPS) of $0.05 for Q2 2020, marking a return to profitability with a positive trailing 12-month EPS for the first time in many years [9][22] - Net sales from continuing operations for Q2 2020 were $74.8 million, down from $102.5 million in Q2 2019, representing a decline of approximately 27% [17][22] - The company recorded a net income attributable to Ampco-Pittsburgh of $0.7 million for Q2 2020, compared to a net loss of $3.9 million in Q2 2019 [22] Business Line Data and Key Metrics Changes - The Forged and Cast Engineered Products segment saw net sales of $50.5 million in Q2 2020, a decline of approximately 36% compared to the prior year due to lower shipment volumes [17][22] - The Air and Liquid Processing segment reported net sales of $24.3 million for Q2 2020, slightly higher than the prior year period, with a 9% increase compared to Q1 2020 [10][18] Market Data and Key Metrics Changes - The backlog at June 30, 2020, was approximately $258 million, down from $321 million at December 31, 2019, primarily due to lower backlog for forged and cast rolls [24] - The Air and Liquid Processing segment backlog improved slightly to $52.4 million from $50.5 million at the start of the year [10] Company Strategy and Development Direction - The company is focusing on maintaining safe work environments and protecting liquidity through extended plant shutdowns and cost containment efforts [28] - Planned maintenance outages are being scheduled to improve long-term performance [9] Management's Comments on Operating Environment and Future Outlook - Management noted that the global economy faced significant challenges, but the company managed to deliver positive results despite these headwinds [7] - There is an expectation for improved sales in Q3 and Q4 as automotive demand is recovering and steel mill utilization rates are increasing [33][45] Other Important Information - The company improved its liquidity position and paid down debt during the quarter, with total debt decreasing by 26% from December 31, 2019 [27] - Capital expenditures for Q2 2020 were $1.4 million, primarily in the Forged and Cast Engineered Products segment [26] Q&A Session Summary Question: Can you discuss the deferrals in the Forged and Cast segment? - Management noted a decline of about 27% in sales from Q1 to Q2, with a pronounced drop in April due to shutdowns in Europe, but sales improved in May and June [32] Question: What were the biggest impacts on the Forged and Cast segment? - The sales volume impact and net unabsorbed cost impact were roughly equal, with cost reduction initiatives helping to stabilize operating income [35] Question: What is the outlook for net debt? - The company targets to keep about $10 million to $12 million in cash globally and expects net debt to fluctuate based on recovery trends [41][43] Question: What is the expected trend for SG&A expenses? - SG&A expenses are expected to remain flat in the upcoming quarters [44] Question: Will the successes of this quarter affect the upcoming rights offering? - The company is planning a rights offering to raise gross proceeds of $20 million, with details available in their SEC filings [48]