Ampco-Pittsburgh (AP) Q3 2024 earnings summary

Executive summary

• Q3 2024 net sales were $96.2M, down from $102.2M in Q3 2023, with operating income at $1.9M and a net loss of $2.0M, or $0.10 per diluted share; nine-month operating income was $7.0M.

• Backlog increased to $383.6M at September 30, 2024, with 71% expected to ship after 2024, driven by higher roll order intake and new orders for 2025.

• Management is focused on restructuring, debt reduction, and expects significant progress within 12–24 months.

• FCEP segment saw flat demand in North America and Europe, but order intake is improving for 2025.

• U.S. forged business performance was strong, supported by recent capital investments and operational efficiencies.

Financial highlights

• Gross margin improved as cost of products sold (excluding D&A) fell to 79.4% of sales in Q3 2024 from 82.7% in Q3 2023.

• Selling and administrative expenses increased to $13.3M in Q3 2024, mainly due to higher employee costs and FX rates.

• Interest expense for Q3 2024 was $3.0M, up $0.5M year-over-year, due to higher equipment financing and increased borrowings.

• Net cash provided by operating activities was $10.6M for the nine months ended September 30, 2024, compared to a use of $10.3M in the prior year period.

• Cash and cash equivalents increased to $11.8M at September 30, 2024, from $7.3M at year-end 2023.

Outlook and guidance

• Backlog at September 30, 2024, was $383.6M, up $4.6M from year-end, positioning for low to mid-single-digit volume growth in Forged and Cast Engineered Products in 2025.

• FCEP expects improved utilization and shipments in 2025 as order intake recovers, especially for cast and forge roll facilities.

• Air and Liquid segment expects continued strong demand, especially from the pharmaceutical and nuclear markets, with additional U.S. Navy funding to further modernize production.

• Management anticipates further operational improvements and market share gains, particularly in the U.S. due to onshoring and trade actions.

• Management expects sufficient liquidity from operations and credit facilities to meet requirements and debt service.