AP - Earnings call 3 2023 | Ampco-Pittsburgh Corporation

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Operator

Welcome to the Ampco-Pittsburgh Corporation Third Quarter 2023 Earnings Results Conference Call. [Operator Instructions] Please note, this event is being recorded. I'd now like to turn the conference over to Kim Knox, Corporate Secretary. Please go ahead.

Kimberly Knox

Thank you, Tony, and good morning to everyone joining us on today's third quarter 2023 conference call.

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

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

J. McBrayer

our call. Kim. you, joining thank morning, Good for Thank you and

per share business quarter press our both in third release and positive XX-Q for reported earnings delivered XXXX As performance Ampco-Pittsburgh with filing, of segments. from improved a

realized Air headwinds are Europe. The to quarter. year. is Systems backlog we This experienced and seeing in million despite quarter segment we is was encouraging, year-to-date $X Liquid to the again and growth record in last for significantly Our of performance negative experience up our segment we significant that in the the $X.X & for operating income continue million improved compared

at Lyon, of the our to Products call Cast which now year. I'm on end and his and completion going about to Forged Engineered Cast investments of in turn capital is President excited Sam track our are comment segment, Engineered Products further for this Sam? We equipment the on the performance. for Forged segment over

Samuel Lyon

Brett, the with over you, operating outages the Despite income million a quarter versus decrease FCEP Europe and million but $XX.X outages of maintenance the for quarter at XXXX. for raw an planned pass-through $X.X fourth year of consecutive XX% the prior good The the material is customers soft ], decreased marked 'XX plants $XX.X we were positive the through lower and Thank for million. a income XXXX. revenues surcharges million depressed. U.S. finished revenues year-over-year and to FEP. The of segment annual to than and operations, operating melt cast segment. of the be lower of QX of strengthened while of continue [ QX summer demand costs improvement morning. higher forge and is reflects energy our $X.X QX stable has approximately roll and market drill forge market FEP our the

demand, rolls in demand and has for [ customer impacting to market market expectations customers resulted term. position has non-roll base ] In this American business in XXXX of ongoing inflation, anticipate in investment our higher Europe. declining from high its XXXX Association cited in a XXXX. In short-range and the Steel increasing It global are and overall we This of conflicts October, consumption flat short decrease voiced and uncertainties. having kind, relative inventory North forged in and weakening for World see to in interest for cast its reacting continued our April some a demand recovery softness starting activity and outlook to and steel global some to However, XXXX the projections. increased the in steel modified roll rates

demand inventories have Our larger of demand intermediate U.S. by of half India the projectable ArcelorMittal increase approximately and an believe picture Europe XXXX remains increased. half on to are with and new -- decade increases. demand as decade Brazil and share recover many projects will all customers' as we coming increases. increase be we double, long-term the our the XX%. successfully and Steel grow customer bullish in in our Offsetting first second non-China are well demand to customers. The where the for and and others pricing North XX% correct next project in grown down They for decline, XX% steel our Dynamics, demand Nucor, are capacity. investing and America of U.S. in to our Steel share will increased has with and positioned all supply the customers to in strong, base this approximately

of by compounded SkyQuest. In Next and Insights the In aluminum market Market Market grow to was opens XXXX, aluminum with X.X% rolling all announced Future growth our expansion metals annual in suited. to addition, sector rural coded through opportunities broaden U.S. were Allied Research, the domestic of the of for numbers global the is are rate products expected the industry, This construction in Market our footprint mills estimates X to Research. Similar new according new a XXXX which

performing commissioned. machining of continues were X improvement as being X our U.S. commissioned are capital stated, of The in in the As equipment or centers in QX to and X been plan process the remaining expected. centers progress. Brett have machines the installed

very forward these to reduced results for many to and We our us significantly look costs, allowing ahead years customers levels maintenance by with service improve are encouraged our further.

J. McBrayer

his Systems Air will of President Liquid Anderson, Dave Sam. cover now Dave? you, segment's results. Thank &

David Anderson

all force prior is level, than higher our expanded up XX% Air than to the as expectations. year Even this exceed plan versus a again it businesses sales And months the with through first year. X X of compared grew to was Good year-to-date now our to a continues record XX new see record XXX% to the results continues & new for achieved backlog now you, sales We've our ago. Segment quarter over year. Sales months morning. income our months with operating achieved X with above year Liquid consecutive strategic higher have quarters. XX% this change income backlog prior primarily Year-to-date, sales prior X year. included increased a an The positive QX prior more of sales benefit to policy. backlog sales million XX% year, record-level the Thank recognized XX% income in Brett. sales. for employee increased first in in of was $X.X XXXX for due prior

Ridge operating to the make the U.S. additive on at make working for using parts goal onetime adjusted additive Laboratory progress this year. The income Excluding technology growth the Navy. project item, with National we of continues approximately we toward provide manufacturing to are U.S. versus Navy Oak prior shows XX% pumps of to the

will grant The to increase also The new and are received funding Air new $X.X that expected in is machining Liquid equipment, million purchase capacity manufacturing pleased equipment from us and the We the to new and purchase has be funding improve on U.S. a is share installed Navy which efficiencies business. for equipment. & order for U.S. of our operating mid-XXXX. to allows grant Navy

J. McBrayer

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

Michael McAuley

morning. you, Thank Brett. Good

income manufacturing an to XXXX XX-Q third item quarter reflects owned sales Engineered in $XXX.X interest night XX% financing legislation Cast in the new financing year release surcharge third steel shipment tax a sales tax grew quarter in prior of debt. due increased prior the which & state This net segment results the the from Sam increase Chinese lower rates issued compared and to for morning, for due period, Products segment arrangement for Processing quarter and income Net the sale from led our quarter XXXX and the to This this completed and second Forged in X.X% total oil to the million. second last lower interest in higher by of ventures. Interest joint deferred declined Product expense income for net enacted our during third and $X.X to quarter. quarter equipment of to by in for shipments recorded in mill Form transaction dividend year the The XXXX. for Processing the pass-throughs higher prior as compared XXXX half a and year, of As to rose will the compares X $X.X primarily in of the from foreign the businesses. quarter following and quarter Liquid Pennsylvania to markets primarily indicated certain rise by our roll the of revolving for million year-over-year, were facility year both for compared noncontrolling and the -- higher interest the compared declined volumes. Income prior operating press explained, gas by funding to one majority XXXX. Other million. Air to corporation's surcharges, XXXX. Net of segment a the leaseback of in offset income prior on equipment million, to of 'XX, under quarter Forged of roll in Processing venture. operations quarter the which driven the project Net Air Liquid higher due quarter outpacing the compared products to driven income attributable higher declined prior part of volumes tax income Engineered year XXXX, and to The of of principally Liquid is the due latter modernization also of Cast shipment improvement sales discrete Air segment volume & forge in due the the this the third provision capital $X.X filed It & all in net borrowings the current decrease the support segment. Investment-related U.S. a demand in exchange business. Ampco's in rate for in impact a distribution X.X% the credit the average was joint decreased year reflects Chinese working operations the in in gains the year growth on for lower the assets was part in the for quarter, sales year in net higher pricing the costs quarter the by transaction revaluation and lower FEP for

capital was segment, roll activities million operating in in inclusive the in $X.X a FEP QX XXXX segment orders the for the from in expenditures capital operating Cast by or the use for for by due by with year-to-date second was Ampco-Pittsburgh and working XXXX part XXXX, offset a forged year to used results & beginning attributable September backlog with backlog in of quarter approximately XXXX, current Products $X.X Engineered million at of income business's Liquid lower Engineered flows the U.S. $XX.X the pricing, approximately Cast record reflecting higher net Forged driven improved an better Products year X% $X.XX of result, This improvement of orders XX, and and million million for capital cash investment. products. Net quarter. Total to for decrease and rose share per demand primarily were rolls XXXX at represents the and change $XXX.X the working $X.X Air primarily a modernization program. million, of of a and September new forged's segment, high periods. Capital cast support Forged and the As from

of million. the revolving CapEx machinery in XX, liquidity of position the cash QX with completion our expect equipment the key that undrawn corporation's facility finance $X.X to increase program. At availability and part for milestones of of and XXXX million facility capital included credit are $XX.X expenditure on hand on September XXXX, usage of expected that We

has the September the now to million open capacity facility of modernization would the for equipment at sufficient time, the this of to and expenditures remaining XXXX, of questions. addition, XX, In finance financing line as remaining program. Operator, we is like $X.X

Operator

will We Gabelli Instructions] Bergner [Operator the question Justin begin come Our will Funds. now with question-and-answer. from first

Justin Bergner

that's the With respect that is from you I fourth more of additional expecting holiday Products, downtime concentrated pull this the downtime would annual I'm and does take guess, Or to Forged and sort season? to forward, some led towards downtime, customer what that in downtime view? the Cast that Engineered quarter be

Samuel Lyon

Europe's normal happens Maybe I wasn't in and that clear. the third our That's normal downtime quarter. just

our that the pull supply the in That top idled in on market blast we been raise Justin, just normally third wasn't European in downtime and furnaces Now the downtime necessarily many but quarter there that, Europe, to of align down prices that poor. was the with are to vacations. have take

Justin Bergner

Got it.

you the capital? last And lead to Okay. lead year, harvest year, to obviously, with expect will of and harvesting that to in some when should that this next flow, -- of you working volumes some to respect first down, cash used half year be

Michael McAuley

in the expect yes, that, then production, a capital kind softness like production and example, release up as working half of Sam we hence first roll with capital. on second And Whenever business, ramps will so up, for working half ramp demand tends with as production. versus indicated, to that

Justin Bergner

just I the came And of a remarks. Okay. then prepared in the out terms project, in faster think bit detail the modernization little

in many commissioned? to So yet how the from And to expect when financials? start has have do the many the been benefit showing be you How up commissioned? modernization EBITDA

Samuel Lyon

finished have this the we overlap first [indiscernible] are Creek. commissioned, routing the and commissioning quarter our next X plant are Justin, in an probably be And X Harmon that machines training machines in of machines Creek through Carnegie. remaining continue plant, are of then of our quarter. will are year. those finishing They'll that in Harmon The the

Justin Bergner

Okay.

mean, I EBITDA, -- we equal the the should sort to after account? step-up of quarter, on else everything a So see being first begin of

Samuel Lyon

Yes. That's correct.

Operator

It I to Brett there any would McBrayer remarks. no like This over concludes session. question-and-answer the back for further turn conference to appears our are closing questions.

J. McBrayer

call want joining the to delivering by of I'm support. our business each thank work employees day. your change both strengthening seen I we've every the continued operational for hard our and positive you. and you performance across positive they're momentum morning. for want thank I and our the Thank shareholders also Thank our segments. this encouraged to

Operator

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

disconnect. may You now

Ampco-Pittsburgh (AP) 14 Nov 232023 Q3 Earnings call transcript