AP - Earnings call transcript Q1 2024 | Ampco-Pittsburgh Corporation

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Welcome to the Ampco-Pittsburgh Corporation First Quarter 2024 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, Nick, and good morning to everyone joining us on today's first quarter 2024 conference call.

Joining me today are Brett McBrayer, our Chief Executive Officer, and Mike McAuley, Senior Vice President, Chief Financial Officer, and Treasurer. we the Steel are President Corporation; & Systems on of Lyon, remind of plans, statements comments everyone intentions. objectives, us may like financial Liquid Electric would expectations, Union that and Corporation.Before make joining call Sam statements today President other and or projections looking Air or to that Also I begin, Dave or this forward of may on include participants call are the corporation's Anderson, and risks corporation's certain involve many of the matters These outside are uncertainties, control. which The or Exchange corporation's and XX-K including most statements Commission. various actual those results corporation's may differ and Form factors, suggested due in significantly from subsequent risk those projected the filed forward-looking discussed filings in in with any recently Securities to the not otherwise obligation to do undertake revision any or forward-looking publicly update our to release statements. any We replay our this on A website. will posted call of be the To Brett website or the our please replay, of the access over section turn I'd earnings Investors release to Ampco-Pittsburgh CEO. call that, consult ampcopgh.com.With webcast like McBrayer, to Brett?

J. McBrayer

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

our Products Sam as the will our moved I as turn of in These & the XXXX. sales from first call the segment. reported XXXX our was we compared quarter to the press impacting unfavorable Forged quarter's of downtime our foreign Significantly Liquid first cast release, and our finished President in roll the was quarter in compared performance versus us our comments now over quarter.For of associated plant $XXX.X segment. million Engineered further into $X are net X% million to quarter as and million, first at quarter for Cast up facilities Air one As operations have behind to fire $X.X on to second over headwinds an the of expense, Lyon, Income a performance, when the product of mix XXXX. repair due well Processing

Samuel Lyon

will Forged our recovery reductions segment, Europe. than and have forecasted, with slower overstocking. In in slight In market morning. conditions muted. good and lower anticipated Brett, been This as the market Products significant Cast you, a the was Thank be roll overall, Engineered occurred the reduction resulting in XXXX,

in both and We outlook are activity North and America improvements Europe. in see to starting

We the improved intake half the year, of are optimistic for order about in second anticipating XXXX. delivery

a seen have improving experiencing order We positive in of across customers flat North book movements, most our some with QX. America or

pricing in backlog shipments. and the our shipment exceeded High a at customers in European Our demand levels have their matching market is said much of supply through XXXX total challenged expected the bottom April and inventory impact of appear is of volumes resulting bar higher mitigate XXXX. distributors. their destocking customers for have complete, up. have and to that of to challenges, these largely Despite We XX% similarly come off FEP shipments decline

forged for several pleased top remains operational in due I more strong forward a demand customers This to of maintaining to and and of the Our America reliability capital look position robust in primary am focus indications on to needs North increased completion the efficiencies cast market and our and we XXXX, with report our from program.As roll Europe. enhancing strong rolls. regarding is both

beginning exited as are has a be of of In and, We're XXXX stated, negotiations to the backup beneficiary. addition, one our which of market, expect competitors encouraged. the we cast roll for large at

financials. for increased the period of the million In $XX.X aluminum XXXX, more expect to one up other buy large from allocation of rolls in XX% strong.Turning market of is to same for last in market is improving, XXXX over sales quarter XXXX. $X.X net resulted $XX.X million and remains from the main in Slovenia income the the over customers Our double-digit first quarter first million, $X.X Many percentages. XXXX reason plant steel from customers to joint in repair year. decline our of our flat-rolled The of Sweden U.S. million unplanned The from slightly downtime from the XXXX. a The compared performance and operations first productivity the our largest the decrease by costs to was China our forge at strong and and our offset in venture. plant, quarter our partially improved

headwind. we End XXXX, and potential orders the our stronger look is pricing over improving offset have facing years volume actions lower few our for customer XXXX. While in future are last demand for this

for Our new investment reliable from anticipate equipment continues production this perform we and years. expected, many as to

J. McBrayer

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

David Anderson

capacity manufacturing you, in related Good along increased quarter for unfavorable issue The the line, more the costs to of product income SG&A facility to air short-term quarter Liquid and in income sold strong. products force versus expense higher by increased XX% to increase the those out Air with April, units, lines along and handling as air prior our handling in & the air we and to for for resulted versus for Air due in product The sales prior air a due for year, was QX booking continues in Liquid In both of business higher orders. pumps and Air the pumps activity shipments primarily force, quarter. offset quarter.Demand expansion in to the product handlers was with in and product handlers centrifugal higher-margin unfavorable the increased for higher heat we exceeded for to being due Higher mid-XXXX. mix to morning. declined both XXXX total of shipments be product driven revenue. declined Brett. began the operating success first the in exchanger The Thank backlog shipments build due due to partially exchangers mix Handling April of backlog sales The the opening design unit. the bookings new bookings.Operating air higher primarily the revenue the handler custom achieved timing for mix commission heat backlog additional year, see units. by the of the increased capacity QX to due of & increased the

increased in Multiple projects we that manufacturing the X in is are the funding to the the new grant U.S. in We motion arriving include we projects purchased Those XXXX. quarter yet sell capacity the Buffalo. substantially out further have capacity. equipment from in our with continue received Navy last this facility capacity. years, to This equipment at our increase

an traditional to foundries manufacturing developing National quality We issues. long suffer also lead work that to regarding Laboratory additive times U.S. will for parts alternative with continue the continue provide at Ridge the Oak manufactured Navy. our and Additive

last opened versus to in to location Lynchburg, capacity to air expanding expand our expect continue This handling XX% in new QX pursue strong driver and was year. units Virginia. to We increase primarily capacity, all demand. we opportunities workforce grow manufacturing location sales at manufactures to the in product the which our handling remains air to year by we meet for this our allowed our last of and Demand continue main lines,

J. McBrayer

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

Michael McAuley

you, Thank Brett.

total increasing sales and increase yesterday & over filed the for Ampco's XXXX. of XX-Q The for in were first quarter XX% morning, sales $XXX.X growth, Liquid sales Processing million, the our issued for of net Form to our in quarter XXXX compared indicated net press X% year. this of release segment As accounted the first Air by prior their for approximately QX an

volumes forged was XXXX, prior of as rolls temporary and reported as by indicated. modest Forged impacted flat roll of heavily and higher cast shipment of which base lower approximately Brett Cast a volumes lower approximately first and from versus issues, operations the Engineered shipment Products surcharge year, positive segment income pricing rolls was sales for by were higher quarter passthroughs.Corporation offset X

which $X.X due First, roll reduced our fire of foundry the income approximately downtime, damage cost and caused cast costs from to a production at European one of operating repair lack million both by absorption. which in facilities,

prior sales sales Dave SG&A Liquid timing higher related expenses corporation's volume segment's mix facility borrowings, for million transaction income to higher primarily quarter Air to segment sales Air primarily rates. than & XX.X% approximately $X.X the XXXX equipment net allowances to were their addition, XXXX higher income by over profitable QX administrative for orders, to of and financing compared and in 'XX, and average expense commissions XXXX. given no effect QX QX the provision & assets. its in segment and higher Corporation's Second, have a the net for shipments. million tax quarter Processing credit interest due given prior year network given revolving losses higher in exchange foreign the which increased expense debt tax of distribution expense versus of year gains QX the compared of XX.X% expansion income recorded QX selling year of an as $X.X had higher total higher balance, indicated.In the Other recorded XXXX.The Liquid for the due higher entities, increased to in of against declined deferred margin valuation slightly unfavorable year, recorded Interest

at position the was March quarter lower working handlers million.Operator, $XX.X included strong first liquidity like line in Cast as positive this would in activities for on Dave $X.X line And air to declined XX, XXXX. our primarily $XXX.X primarily $X.X were loss at due months the trade of was Forged Capital flows the decreased $X.XX balance quarter facility availability XXXX by of in quarter Engineered XXXX, with lower this This by the revolving Forged segment's expected open million backlog XXXX, expenditures result, rate operating for $X $XX.X a prior XXXX, the backlog undrawn had for $X.XX $X.X order coupled with million, & backlog roll hand foreign March of XXXX due the in credit At share, million million, most approximately $X.X of to Liquid segment Ampco-Pittsburgh about million, the net approximately ended Air of XXXX.In As compares from XX, $XX XXXX, net XX, attributable customers of segment X% share. by by XXXX. The Engineered million X from The per or addition, orders XX, translated value major foreign million. or being backlog March the in cash sales is to Products quarter. a indicated. December we provided of of third net questions. activity XXXX. and forged product due million. and QX ended of to the to time, income per Investment that timing Products cash QX on and capacity $X.X December Total Cast stable of corporation's quarters March now XX, Net segment. at the declined XX, the are of and to second million, XXXX, exchange and was for for capital reduced for

Operator

[Operator first Funds. Instructions] Gabelli question comes Bergner The Justin from with

Justin Bergner

comments think the I the about of the cost fire. Mike, I missed,

threw out I Could some it? think you cost I number, you it. didn't but reiterate catch

Michael McAuley

$XXX,XXX in Yes. quarter, the Justin.

Justin Bergner

any actual Is exclusive from Okay. And of the of of the production? is that lost recoverable that repairing, cost insurance?

Michael McAuley

is about $XXX,XXX is About that's policy. Yes. property our deductible of insurance cost repair the right costs. level And the

repair So, we lack see $XXX,XXX more impact into than because operating had plant X the the in those impact Collectively, which of overhead are we couldn't the pieces in then manufacturing for quarter. costs. And $XXX,XXX downtime, of we won't the income for meant any production. that is absorb the inventory $XXX,XXX

Justin Bergner

that negligible X Is in I operating the fair? second assume that or quarter. the is impact

Michael McAuley

Correct.

Justin Bergner

Bigger question. picture Okay.

How So, you that that? Could a market little of share will cast growth the mentioned you of guess, Europe pricing prospectively? degree power market the provide volume they competitor more impact deal? deal that exited. in or large minor bit mentioned, you has a roll on a the Is How this a are? backup detail on and major think roughly I Sam

Samuel Lyon

but not maybe I probably points Justin, to points basis potentially. would major, basis of it's XXX say XXX it's revenue,

market. the to of that. smaller we be or it's decided portion XX the exit of could a seen. XXX upside about rolls generally, these actually, be But competitor, So, larger company that we it to that'll make U.S. was of see a But yet so. and But rolls,

Justin Bergner

Okay.

whole when in XXX context the of the So, to you or revenue, XXX basis points Forged say and of Cast that's Products Ampco-Pittsburgh? Engineered

Samuel Lyon

Cast Forged Products. FCEP, Engineered and

Justin Bergner

Okay, got you.

Samuel Lyon

share say again, don't want I That's our we that's not... it. And up pick to assuming of --

Justin Bergner

Okay.

Samuel Lyon

should guaranteed, not we It's get share our though. but

Justin Bergner

up, of flattish the... Okay. Forged Cast Is I And components down, the just forged and cast the Products, passthrough revenue then up. Engineered guess, then in roll's and that

Samuel Lyon

both are down. mitigating increase cast and but the down the is Cast Forged decrease. volume is more, pricing

Justin Bergner

you I a the in of Okay. comments that us second Or hopefully 'XX event? expect America and And rolls. sequentially likely think North more and positive Europe. And cast about up to Do in be your to is were 'XX? half orders volumes forged see

Samuel Lyon

is 'XX likely the increase. More see it's when we'll

Mike As we're was of largest one now our negotiating customers. talking,

We're but allocation. else, buys be that with indicated customers everybody larger We our will have roll year. the next the negotiating many of have

So, we're in what that's seeing the market.

Justin Bergner

half But expect look outside half of on front second the for... to you Okay. the better would the seasonal than volume factors first

Samuel Lyon

No, the side of similar. FEP it'll business. seeing be increase probably on We're the

is non-roll say, taking roll the side downtime factors more, you in seasonal account, of side, the Europe I'd So, into course, just and flattish, the that mentioned.

Operator

with The question Assante next Instructions] Blair Wealth [Operator Advisors. from comes John

John Blair

exit are those looking competitor able you in on the Question any doing their of along lines? to facilities, anything or Are the of up Europe. pick you at

Samuel Lyon

it's not and exit. No,

was market, didn't will of company. it a just product. It so One be not be of competitors asset away. like there pickup no, exited again, that. or a any anything would our U.S. the portion, portion But a transfer of And go they a production particular

John Blair

sounds far majority Okay. so plant And then behind as much forth as your expenditures the for of you. and pretty capital like it is upgrading

does years? of forward that the look how relative So, past couple to going

Samuel Lyon

improved. is equipment the it's and the reliability #X, factor, Well, biggest greatly

higher old, So, the this we're of then that modernized seeing has And out that. and were we better had decades equipment. performance also assets productivity,

expectations, expected, operating had but say, we high as running it's I well. So, which would it's

John Blair

on a order pickup Are And the about what you domestic there? seeing side?

Samuel Lyon

Steel, everybody's demand. all a Dynamics, earnings Cleveland-Cliffs, roll And our XXXX, buys. either U.S. improved then customers, For lag they're from bit, in flat these citing Steel just higher or quoting things Nucor, demand slightly major little calls QX indicating

and So, to stay need go up, everyone's they're higher our translating or up ends expecting where into at then products. that for

Operator

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

J. McBrayer

Nick. you, Thank

division. continuing the in explore will as outlook as continuing steel progress profitability investments roll well continue our The to forged the in improve remainder of nearshoring in roll to favorable we year, present a the through As America, and we aluminum in North options cast our for trends division.

our in good believe & call thank joining the this mentioned, into I to continued output Liquid the support. near second David priority. great Anderson expanding Thank you their we a quarter. we and for the have is employees Air momentum morning. your our As In our work want heading term, our shareholders for for segment

Operator

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

You may now disconnect.

Ampco-Pittsburgh (AP) 14 May 242024 Q1 Earnings call transcript