Ampco-Pittsburgh (NYSE:AP) Conference Transcript

Ampco-Pittsburgh Conference Call Summary Company Overview - Company Name: Ampco-Pittsburgh - Ticker: AP - Founded: 1929 - Segments: - Forged and cast engineered products - Air and liquid processing - 2024 Revenue: Approximately $400 million - Employees: About 1,500 [1][2] Core Business Insights Forged and Cast Engineered Products - Market Position: Global leader in forged and cast rolls for steel and aluminum rolling mills, primarily in North America and Europe [2][4] - Revenue Contribution: Revenue from rolling mill rolls is estimated at $250-$300 million, with the global market for rolling mill rolls around $2 billion annually [8][9] - Customer Base: Major customers include U.S. Steel, Steel Dynamics, and Cleveland-Cliffs [5][11] - Production Facilities: Operations in the U.S., Sweden, and Slovenia, with a joint venture in China [6][10] - Market Dynamics: The company expects $7-$8 million annual EBITDA improvement from the business reset, focusing on operational efficiencies and growth [3][16] Air and Liquid Processing - Business Segments: - Aerofin: Heat exchange products for nuclear power and industrial processes - Buffalo Air Handling: Custom air handling units for specialized environments - Buffalo Pumps: Centrifugal pumps primarily for the U.S. Navy and power generation [17][18] - Growth: 55% revenue growth over the last three years, with continued expansion expected [18][19] - Strategic Importance: Long-term supplier to the U.S. Navy, with significant investments to modernize facilities [20][21] Financial Performance - EBITDA Improvement: Anticipated annualized improvement of $7-$8 million from exiting underperforming assets [23][24] - Debt Leverage: Expected to improve as the company modernizes plants and exits unprofitable operations [23][24] - Pension Plan: Moving towards a fully funded status, which will positively impact financial health [24] Market Trends and Opportunities - End Market Growth: Major end markets projected to grow 3-5% over the next five years, contrasting with previous years of flat or declining growth [15][24] - Tariff Impact: Anticipated increase in demand due to tariff changes in Europe, potentially increasing demand by 10%-15% [14][28] - Nuclear and Navy Markets: Significant growth opportunities in the nuclear sector and U.S. Navy contracts, with barriers to entry providing competitive advantages [19][21] Risks and Challenges - Market Demand Fluctuations: Previous delays in roll purchases due to tariffs and market conditions, but signs of improvement are noted [28][29] - Competitive Landscape: Limited competition in the U.S. for rolling mill rolls, but ongoing monitoring of competitors like Villares is necessary [9][34] Conclusion - Future Outlook: Positive growth trajectory anticipated, with a focus on improving performance, reducing debt, and capitalizing on market opportunities in both segments [36]