Ampco-Pittsburgh (AP) Q2 2024 earnings summary

Executive summary

• Q2 2024 net sales rose to $111 million, up 3.5% year-over-year, driven by Air and Liquid Processing growth and full utilization of new equipment in Forged and Cast Engineered Products.

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

• Operating income for Q2 2024 reached $5.04 million, up from $1.41 million adjusted for a prior-year energy credit.

• Performance was driven by record order intake and margin rebound in Air and Liquid Systems, and improved pricing in Forged and Cast Engineered Products.

• European cast roll business continues to face losses due to excess capacity and market pressures.

Financial highlights

• Q2 2024 net sales: $111 million (+3.5% YoY); operating income: $5.04 million; net income: $2.01 million ($0.10/share).

• Gross margin for Q2 2024 was approximately 21%.

• Interest expense increased to $3.02 million due to higher equipment financing and rates.

• Selling and administrative expenses were 12.2% of net sales, down from 13.1% in Q2 2023.

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

Outlook and guidance

• Expect continued efficiency improvements and strong demand, especially in Air and Liquid Systems, into H2 2024 and 2025.

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

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

• Third quarter expected to be seasonally weaker due to shutdowns, but underlying fundamentals remain strong.

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