Ampco-Pittsburgh (AP) Q2 2024 earnings summary

Executive summary

• Q2 2024 net sales rose to $111 million, up from $107.2 million in Q2 2023, driven by Air and Liquid Processing growth and higher ALP segment sales.

• Net income for Q2 2024 was $2.01 million ($0.10/share), up from $0.42 million ($0.02/share) in Q2 2023.

• Operating income increased to $5.04 million in Q2 2024 from $1.41 million adjusted in the prior year, excluding a one-time energy credit.

• Sequential improvement was driven by new equipment utilization and margin rebound, especially in Forged and Cast Engineered Products and Air and Liquid Processing.

• European cast roll business continues to incur losses due to excess capacity, though total backlog improved sequentially.

Financial highlights

• Q2 2024 net sales: $111 million (+3.5% YoY); six-month sales: $221.2 million (+4.3% YoY).

• Q2 2024 operating income: $5.04 million; six-month operating income: $5.13 million.

• Gross margin for Q2 2024: 20.9%; operating margin: 4.5%.

• Interest expense rose to $3.02 million, up from $2.25 million in Q2 2023, due to higher equipment financing and credit facility borrowings.

• Net cash used in operating activities was $5.3 million in Q2, mainly for higher working capital and pension contributions.

Outlook and guidance

• Expect continued operational efficiency improvements, though Q3 is seasonally weaker due to scheduled shutdowns in Forged and Cast Engineered Products.

• FCEP anticipates improved order intake in H2 2024 for 2025 delivery, with higher pricing and market share mitigating shipment volume declines.

• ALP segment expects steady demand but faces rising production costs and supply chain challenges; price increases are being implemented.

• Lower-margin backlog in Air and Liquid expected to roll off by end of 2024, improving margins.

• Funds on hand, operations, and credit facility expected to cover operational and debt service needs.