AP - Earnings call transcript Q2 2021 | Ampco-Pittsburgh Corporation

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Operator

Good day, and welcome to the Ampco-Pittsburgh Corporation Second Quarter 2021 Earnings Results Conference Call. [Operator Instructions]. Please also note, that this event is being recorded. I would now like to turn the conference over to Melanie Sprowson, Director of Investor Relations. Please go ahead.

Melanie Sprowson

good XXXX everyone Conference and today's us Sarah, Quarter Second Call. you, morning joining to on Thank

Joining me Financial Liquid Air today today Steel Officer; Also and Corporation; are us Systems are Brett McBrayer, McAuley, joining Kenny, of Vice Corporation. our Sam Senior and Lyon, President, Union the Terry & Chief on Officer President Treasurer. Mike and call Chief Electric Executive of President

those or matters call today. comments XX-K like filings any this due revision the the CEO. to are remind webcast that any involve Brett? may be the ampcopgh.com. Investors Ampco-Pittsburgh's Before forward-looking Form make To website release The or may or I'll will begin, may this including earnings turn statements the that, publicly obligation release the filed Corporation's undertake various With recently A Corporation's many of and replay risks otherwise posted our or I statements. and to not Securities most with of and from in uncertainties, results to would our looking on Commission. to do factors, or over replay, McBrayer, Brett subsequent call later in Corporation's Corporation's or the forward-looking plans, any consult we projections objectives, at which please access section update website We other that Exchange projected are the of to those of the call our suggested participants forward everyone financial expectations on statements include These intentions. control. and outside discussed actual of significantly certain differ statements

Brett McBrayer

this towards joining to their will time quarter. for recordable earnings the earnings in our the want injuries everyone first And continued to and to for and for positive injury The in Ampco-Pittsburgh our per goal morning. safety effort. lost we workplace. want XX% with our organization rate push I of quarter commitment saw Melanie. to X in our this continues improvement delivering you, share our Good morning, a our quarter. employees to with reduction significant $X.XX where for compared performance, I rate XX% trend, injury a I a Thank begin our of thank reduction our call thank

strengthened, increased sales our momentum X% a Our Growth sales gaining as with growing stronger is continues in and activity Cast continues utilization pre-pandemic to for products and expect volume. improve, the accelerate our Engineered output nonroll in and Forged sequentially The our much quarter with forged segment. and we customer by XXXX order rate Products and returns backlog robust aluminum base. to to business a and steel growing

segment to Our see Air and continues Liquid with strong backlog. growing a Processing demand

which and to equipment improve structure will cost our plans the our our topline quarter, modernization expand we During continued capabilities. execute further

We facility support quarter and the also improvements and amended extended anticipated to during capital our our working revolving growth. credit capital

logistical positive price and of lagged is to quarter, Our performance, transportation. impact further headwinds customers with the through delays. and and material continue raw we headwinds surcharge liquidity new our rising faced for supply our to negatively remains strong Despite agreement. the and rising position raw our prices our performance chain These materials strengthened our

as close this prices However, gap will stabilize.

of to and assets, last the to Although, our year the in we pandemic uncertainty global protect due were our liquidity. annual to the of spending we conduct each year outages conservative reliability improve our

undertake reliability XXXX third quarter, items our During well deferred we as work. the as the improvement address normal will we in

critical a of we As will idle as be factories the this work. many for our result, of quarter portions do

Terry? the President I'd Union Liquid of President segment's highlights Electric Lyon, Steel, share like Terry of businesses. For performance. of further to and Kenny, comments some Sam Air Systems; in now our our on and

Terrence Kenny

to reopen. country for Orders to injury. this work. I achieving air Thank I recordable talk to and Aerofin quarter. Orders OSHA are to should continues our heat the employees and is to accident the year's would am the exhibiting All and exchangers be and for like custom centrifugal first the primary during the medical have XX as recordable increased division Aerofin safety expected accomplishment. an X back Orders acknowledge the pleased employees for treatment XX% quarter. handling in were of quarter the received had you, the that for the second to proud OSHA received significant months increase. pumps at I good would segment performance. reason Brett, prior morning. report increased the We growth, compared about equipment the without employee like minor for

primary As income. a lower beginning lower a backlog the the X.X% compared year, for contributor was increased the the when Revenue decrease The was segment and operating to during sales quarter. down prior to due result, backlog quarter the heat customer-requested the principally to delays in exchangers. of

have supply rising we costs, combined chain mentioned, Brett delays. experienced with As material

Additionally, we the had availability delays The have date, minor demand products is remain segment's material strong, and optimistic lead future growth. have times issues purchase commitments. on delivery segment's impacts material in To material about for the date and increases operations. we in the

Brett McBrayer

Sam? turn now to you, Thank over Terry. call Lyon. will the I Sam

Samuel Lyon

rates. would already in the like morning. talked Thanks, I with to Brett Brett, about safety. our begin improvements and good

raw root continue cost be and Ohio, in and Austintown, a identify on and scrap operations Valparaiso, free Erie, to actions our being occur. Slovenia to materials causes potential like incident to recognize headwind. the the U.K. a and accomplishment. recordable We quarter, hazards Carnegie, when for does the focus for continued From I'd perspective, mitigation an remarkable

of X half second the to raw moderation lags, to If quarters appear materials compressed moderating. X has $X customer. in margins see costs the by in compared to million. improved scrap year. approximately surcharge first depending continues, This X our we mechanism be margin Both and XXXX quarters, this by on of when Our actual will the XXXX the

of and well as our as We our delivering managing and what reducing continue to can, maintenance cost overall costs entire business. QX, the the end of we quality for beginning and control on of in repair outages, the QX teams the was Brett At are of were perform summer. were extended X-week result furnace scheduled. as ongoing pandemic a outage week to rebuilds by This planned X uncertainty that last referenced, States, the of deferred that as completed United the

Our summer have holiday their European during plants will QX. shutdowns

still output has has shipments will In addition, U.K. variant the production as by which activity XXXX absences recovering been QX cast XX% reduce are the approximately XXXX. levels issues, absences a Delta roughly overall our of rolls quarter. $XXX,XXX plant forged our awarded. of in seen XX% see in rates in abating. lower sales resulted causing significant to We now perspective, our sales and rolls in From COVID-XX These have

Demand China of lows. consumer rebate strong pending profits, goods and the strong the the are is hot-dip steel. making States recovered of white hot-rolled automobiles historic demand and the the in the at capacity remain utilization producers there well centers customers just both coil a While segments. is in levels should steel in automotive, XXXX that in our and United of the tax packaging coil, on flat-rolled cold-rolled as infrastructure as exported consensus elimination Also, at remains pricing on horizon are galvanized QX. record and The service inventories at as bill

base well of them. for as as strong All pricing items these our for support customer the demand

segment, XXX% bookings for excited Products our is our Forged of first XXXX. business, the year-over-year prospects which about half Engineered our here. increased For We're nonroll

and the modernization that in are expansion calls, programs, referenced underway. Our I well few last

in approved, cost back Engineered scoped As structure expect to and of the and Brett the in our project rolls the stated, the of we been it XX% Brett. over and XXXX. Forged these investments a completion business project will the further turn by lower support of business. Approximately now growth middle I'll has

Brett McBrayer

At McAuley, more time, the our Officer will our Mike? Sam. financial this performance you, Mike Thank Financial quarter. detail regarding for Chief share

Michael McAuley

prior a XX.X% by XXXX. material segment decline in in net facility and which prior XX% Net the year net net Engineered was compared risen and XXXX, second the segment, quarter the quarter $XX.X equity of June $XX.X XXXX basic as increased Brett. mainly Ampco-Pittsburgh of requested of position on the well you, second with X% credit been XXXX per Products and and sheet second second of is increase approximately XX.X% mill support to second of XXXX. approximately customer availability of product sales its Air of for quarter quarter approximately products. XXXX of an prior quarter versus revolving balance and sales of higher million. lower attributable and as engineered to profit sequentially, as cash segment, at the Cast $XX delays. With shareholders' shipments XX, changes XX, EPS million The second compared for continues sales by mainly sales higher percentage remain the costs of The than mix. Ampco's reported year hand the total was to Products million. to net million, has debt net Corporation's of XX% year, Forged for XX% for Gross June of Thank for for Processing of rolls Forged cast XX% to shipments Liquid is undrawn $XX.X liquidity XX% XXXX, down has sales QX quarter and were up XX%. XXXX impacted sales the higher forged strong up In versus share driven XXXX a the the on Total due and $X.XX Engineered raw quarter unfavorable while the versus Cast some

income to Cast sales. The to of million the net quarter due as roll the results $X.X per and approximately compared or material raw Liquid future XXXX of of second Products level compensation for used in now by Ampco-Pittsburgh the at higher income principally quarter year was $X.X of working the $X.X Corporation impacted This as common cash and $X.X of Engineered expenditures exercised proceeds XXXX declined improved segment of $X.X turn XXXX, a partly share. negatively change net XXXX line, increase operations exchange of Products $X.X Selling of from a of and up by income approximately the to in received second amortization additional for cost prior expenses million tax from were outstanding. the coils. prior from million the a at to current net million impact during Period-over-period quarter due by sequentially. call due XXXX. X% Backlog XXXX liabilities order for of foreign Products of the over second million dividend for sales in June year the shipments. increase XXXX, EPS Liquid an second production million the of segment's Forged million XXXX. Income million Net quarter Engineered the the levels administrative and Products Engineered $X.X pumps for common of the XX, offset flows costs, December commissions for expense, of XX% quarter rates comparable improved for approximately for net ventures. XX% to is million decreased the to net sales the joint quarter intake quarter and $XXX and of XXXX to of fund XX, the for on X%, factors XXXX favorable to of Chinese and sales Backlog the compared proceeds. the growth. shipments, year revaluation higher million $X.XX an driven the usage costs operations Engineered activities and, Cast discrete the In to of for provision $X.X from XX, interruption XXXX. bottom XXXX, office. of and in XXXX. the prior lower demand. I XX, million when million. warrants volume from the volume heat of The XXXX, the stock-related Corporation's quarter sales share June part second The Air operating higher was contributing primary the was to capital restructuring compared attributable for Forged result primarily back approximately of of the $X with improved loss or a due year-to-date, for total increased year has results Other Capital in and Forged $X.X from representing improved higher a during of the in second QX higher for to of XX% timing mix Higher rate for These XX, quarter tax the of March of the quarter XXXX in year U.K. for primarily $XX.X higher income quarter of factor. from million quarter XXXX or the the receipt up share primarily second was per to the to principally will the of June value of operating or operating of Backlog to of is second of $X.XX less revolver or one rolls XXXX. quarter net $X.XX the second tax or million. in second increase Processing million associated Forged addition, were XXXX the for certain to enacted prior has better The compared current Corporation unfavorable for trade and in The Corporation's of increase benefited order of XX.X% forged centrifugal to from Products were At improved June improved year year higher exchange sales due segment. business and intake Brett. in absorption, quarter, deferred prior was segment from capital reported XX.X% XX, Forged in net, change a the business for quarter, compared Cast income debt from Depreciation $XX.X stock to of Engineered quarter Total segment's of the share $X.X the debt due compares activity. the income also items working $XX.X Air and expense insurance quarter due the result sequentially quarter million to $XX.X Processing the increase. XXX,XXX shares second the per for

Brett McBrayer

we'd Thank for questions. you, to time, the this open Mike. At line like

Operator

Instructions]. [Operator

David question first comes with Trust. Investment Our Wright from Henry

David Wright

Sam. Could In percentage your a remarks, awarded. about of rolls Sam, I certain a that talked around reread for it. have question you the you Question sentence, being

Samuel Lyon

XX%. really it's Yes,

awarded. XXXX. have and of the really XX% Let of forged -- me find hold for the it, allocations on rolls have XX% been their that's a second. us amount cast that given That's customers

David Wright

Right.

Okay.

the the last still you in that in you call, the concluded company's thought you and were with still those So with might commented in Are X? weeks. negotiations in two largest negotiations those customers coming be

Samuel Lyon

with this in the we XX customers largest have that We're of point No. finished time. at X

David Wright

Okay.

awarded, the are XX% rolls you of when of say just or the the what's So XX% rolls that? of definition

Samuel Lyon

get we the amount that they Just we then customers and from know total them what know what we and the use then -- -- our with negotiate allocation.

do If that that, award, market the -- equals, get just have we share, for typically. XX%. going if example, And number up, X,XXX making for we're XXX So if to we rolls, XX% for year, order roughly can in our we example, I'm rolls customer give, of we're that XX%, to whatever for them numbers these the going year, had if have to book get but X,XXX X, next we roughly. do

David Wright

that's backlog? And in

Samuel Lyon

rates plan goes, year well occur, but of as doesn't run usage sort produce. steel orders. as going that. on much use Yes. as like and They they're know how their another pandemic long know based they to orders It's us and the what they to place their They give really pretty their something

add goes. allocate top on they close. as pretty it's they year lower If spot the orders So and anything,

David Wright

follow last has to then to, how year? say, unit been And relative pricing Okay. up,

Samuel Lyon

And customer, surcharge pricing up flat several our by material I'd accounts up mechanism, varies also say for which percentage It to but points. we that raw down. and then have goes the

Operator

Our with next Bergner from comes Justin question Gabelli.

Justin Bergner

surcharge the much the lag quick impact associated two have sort Just issued of with how money clarification of been and warrants? the restate what questions. Could sort of shares was? And you

Samuel Lyon

the take million half. Sam, roughly compression $X This first in of I'll Justin. the margin Well, surcharge is one. It's

Justin Bergner

first quarter. just the the not whole was half, for first half. the second It That's

Samuel Lyon

Correct.

the Fairly half close. year, First of yes.

the quarter, appeared rising Steel have call, steadily they They would declining at prices second have materials. to to Dynamics scrap good. flat quarter, earnings been the now to pretty the moderate. And in First raw actually on the project second which half, be be

Brett McBrayer

question say? And the is Justin warrants second was about it about, you did

Justin Bergner

I Yes, understand. just so before sure make just the to warrants,

Cast the operations Forged surcharge $X.X million Products from the income and would without been So have from half. in lag, about the million first $X.X Engineered versus

Samuel Lyon

Yes.

Justin Bergner

rates bit on the exercise, that if second the amount wondering came as then was you And question the was just a just at repeat detail warrant I the me could quick. Okay. well.

Samuel Lyon

Yes. Sure.

on been got warrants, we've price. exceeded million trading warrants and since the exercise -- year-to-date, prices, $X.X So have that's has all the and the ever exercise outstanding the in at price the

it had The incremental most Corporation, QX. by share in additional the And We have that's XXX,XXX about the incremental We so about total -- received exercises. million. was $X.X far, had proceeds We additional worth in had exercises shares -- count. some QX. of is that's

Justin Bergner

Okay. was would my a few And to unit the percent. up pricing then last said you be, that flat question

XQ comment beyond point sequential pricing get in think surcharge mechanism, you price surcharge a outside an of XQ? yet the of to as Or was sort not has of the Are seeing producer level top at the that and I of sort acceleration demand get on you surcharge? a finish steel into accelerating mechanism. the reached

Samuel Lyon

low and little Steel QX. U.S. in utilization, right. looking mean XX% that's the I like XX% XXXX bit in was it at QX earnings I Other an pricing, XX% inflationary just call. of think for versus than in a Dynamics' little

all side. roll we're XX%. still last few the our competitors recovered on XX%, -- on competition as But there's still just with it's of So months

have to it's able we then a some you But where or we're have -- to you to work, the there's rolls rolls trying a some -- to trying business perform price know, into ability be get raise get your or you trial, -- you supplier, you're for market been to can in share, some and So more to really get and your preferred competitive. -- then have

Operator

session. question-and-answer for Brett conference concludes This like the over to turn McBrayer our to I any remarks. closing back would

Brett McBrayer

up again, extremely gratitude that work my take I to want my this continues to very Ampco-Pittsburgh. to our proud thanks state on our as our execute to, and outstanding shared remain support Thank employees but opportunity actions. who be on this we continue you. We market sincere make for much. business I I've of Thank activity their work personally, simultaneously the call. as businesses optimistic on accelerate improvement and you

Operator

Thank now attending presentation. The for today's conference has concluded. you

You may now disconnect.

Ampco-Pittsburgh (AP) 10 Aug 212021 Q2 Earnings call transcript