Q3 2025 Ampco-Pittsburgh Corp Earnings Call
Welcome to the ampco, Pittsburgh Corporation, third quarter, 2025 earnings results conference call.
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I would now like to turn the conference over to Kim Knox. Corporate secretary. Please go ahead.
Thank you, Gary and good morning to everyone joining us on today's third quarter, 2025 conference call.
Joining me today are Brett mcbr, our chief executive officer and Mike McCauley, senior Vice President Chief Financial Officer and treasurer.
Lion president of Union electric Steel Corporation and Dave Anderson president of Aaron liquid Systems Corporation.
Before we begin, I would like to remind everyone that participants on this call may make statements or comments that are forward-looking and may include financial projections or other statements of the corporation's plans, objectives, expectations, or intentions.
These matters involve certain risk and uncertainties many of, which are outside of the corporation's control. The corporation is actual results. May differ significantly from those projected or suggested in any forward-looking statements.
Due to various risk factors including those discussed in the corporation's, most recently filed form, 10 k, and a subsequent filings with the Securities and Exchange Commission.
We do not undertake any obligation to update or otherwise release publicly and revision to our forward-looking statements.
A replay of this call will be posted on our website later today.
To assess the earnings release or webcast replay, please consult the investor section of our website at AamcoPGH.com.
With that. I'd like to now turn the call over to Brett McBrayer. Aamco, Pittsburgh CEO. Brett. Thank you, Kim. Good morning and thank you for joining our call.
This was a strong quarter for AAMCO, Pittsburgh, both in our underlying financial performance and in the decisive strategic actions we've taken to transform the company.
As reported in our press release, consolidated adjusted IBA for the third quarter was $9.2 million, up 35% from the prior year.
This was driven by the best, year-to-date results in our air and liquid uh, segments history.
Our third quarter adjusted earnings per share 4 cents are up. 14 cents from the prior year.
It's a strong underlying performance, gives us a solid foundation and we have taken major steps to Quicken that momentum into 2026.
After the core closed in October, we accelerate the exit from our UK facility.
We are also nearing completion of our exit from a small steel distribution, business, AUP.
The impact from our UK exit, alone is expected to improve full year. Adjusted IBA by 7 to 8 million dollars.
These 2 actions. Remove our most significant operational drag and positions us for a dramatically improved profitability as we move forward.
For further details regarding our segment performance. I'll turn the call over to Sama and president of our Forge and cast engineer product segment, Sam.
Thank you, Brett and good morning.
For the third quarter of 2025, FC's net sales were $71.5 million, $6.4 million lower than Q2 2025, and $4.3 million ahead of Q3 2024.
We had our typical summer shutdowns of our European facilities in Q3.
The Q3 Revenue includes about 0.9 million in tariff passes.
Segment adjusted ibida, which excludes the exit charges associated with the UK cast facility and the AUP steel distribution operations was 7.1 million.
0.3 million higher than Q2 and 0.3 million better than Q3 of 2024.
Fpp demand.
And shipments have improved.
Year to date fpp Revenue increase approximately 40% to 14.4 million compared to 10.2 Million. Last year, we continue to raise prices on this product, improving margins as import barriers have increased
Looking at the rule market in North America, some customers temporarily postponed rule purchases due to tariff uncertainty.
And as a result, they have lowered their existing rule inventory.
This supports our view that a return to more normal rule ordering patterns is approaching as inventory levels deplete
Overall, tariffs are expected to have a neutral impact on Rural demand in North America. As our us, customers will benefit. Conversely tariffs will negatively affect our Canadian and Mexican customers as their Imports into the US are affected to date. We've passed all tariffs onto our customers.
The Tariff environment for our European Imports remains a key Focus.
Our Imports to the US from Sweden. Now face tariffs, between 15 and 27%, and products from Slovenia, faced rates as high as 50%.
The Castro Market in North America continues to exceed domestic capacity. Therefore, the long-term demand for our European casserole should not be affected by these tariffs.
We expect that the rule, the rule Tariff affect will be temporary in addition. Our European customers have lean inventory, any uptick in demand will require additional rule orders.
recently announced plans to modify its quota and tariff system for steel which when implemented in July of 2026 will result in dramatically increased utilization of European Mills,
The quotas will reset to lower volumes and any steel Imports above these. Quotas will be subject to a 50% tariff up from 25% currently.
This new system has the potential to be a significant Tailwind for our role business.
Long-term fundamentals, remain, strong construction, spending Automotive production. And cani demand are all expected to grow at Mid single digit rates over the next 5 years.
As formerly disclosed, we have placed our UK cast rule plant into Administration.
The insolvency commenced on October 14th, 2025, and is being managed by and appointed administrators.
This action accelerator timeline for closure, our losses stopped as of October 14th, much earlier than our original solvent wind down plan, which had us operating through the first quarter of 2026.
We now expect the UK facility to complete all work and process, inventory and ship these orders by year, end 2025 minimizing disruption to our customers.
As a result of the UK closure, our Sweden plant will run at a higher utilization rate in 2026 improving its profitability.
To further improve the segment, we have decided to wind down our small and profitable, non-core Alloys Unlimited steel distribution facility.
That exit will conclude by the end of November.
The actions, we took this quarter to address underperforming assets will deliver meaningful improvements in operating income and adjusted debit up for the segment.
Brett back to you. Thank you, Sam, David Anderson, president of air and liquid systems will Now cover his segments results.
Thank you, Brett. Good morning.
2025 continues to be a positive year for air and liquid in. Q3 Revenue was 26% higher than prior year, while year-to-date Revenue was nearly 7% above prior year.
The Q3 revenue increase was driven by higher revenue in all product lines, while year-to-date revenue was higher due to increased revenue for pumps.
Segment adjusted EBITDA in Q3 was $4.4 million versus $3.4 million in the prior year.
The 31% increase versus the prior year was driven by higher revenue and an improved product mix.
Year-to-date, adjusted EBITDA of $12.1 million was the highest in Air and Liquids history, representing a $3.1 million increase over the prior year.
We continue to see positive activity in the nuclear market for our heat exchange product line.
Orders and shipments have already exceeded any prior full year.
From restarting Legacy plans to the new small modular reactors, nuclear power appears to be at the beginning of significant long-term market growth.
Our engineering and Manufacturing capabilities positions us. Well, as this Market continues to grow,
There continues to be strong demand from the US Navy and we expect this demand to continue as the Navy moves forward with Fleet expansion plans.
The manufacturing equipment installed in 2024 has already increased manufacturing capacity for a pump product line, and there is more capacity expansion in process.
In the weeks ahead new manufacturing equipment from the Navy funding program, is expected to arrive at our facility and there will be more equipment arriving in 2026 from the same Navy program.
This equipment along with the equipment, we installed in 2024 will position us to meet the expected growth in this market.
Demand for Custom Air Handlers remain strong from upgrading existing facilities to increasing research and Manufacturing capabilities in the United States.
There continues to be tremendous demand in the pharmaceutical market for our custom handling products.
Tariffs continue to be a major subject in the last few months.
The tariff on copper, which is a main component of our heat exchangers, has been in place for a few months now.
We've been able to adjust our supply chain to avoid, most of the Tariff costs and are passing on any remaining, tariff costs to our customers.
While there may be some short-term fluctuations as the supply chain adjusts, in the long term, anything that results in increased manufacturing in the United States will increase demand for our products.
In summary demand for our products. Remain strong.
2025 will be the best year in air and liquids history. And we are well positioned in markets that are showing significant long-term growth potential.
Thank you, Dave. At this time, Michael McAuley, our Chief Financial Officer, will now share more details regarding our financial performance for the quarter.
Thank you, Brett.
Both our Form 10-Q and our press release 8-K filed yesterday.
While we've recorded charges totaling $3.1 million in the quarter relating to reducing our operational footprint for significant future projected earnings improvements.
The underlying business has improved, with significantly higher consolidated adjusted EBITDA and adjusted EPS in Q3 2025 than in the prior year.
Which is true for the year to date, period, as well.
And all while we have navigated some short-term disruptions from tariff policy in our customer base.
In October, we issued a press release and filed a Form 8K, which detailed The Accelerated exit from our UK Castro facility through a structured insolvency process.
This removes that subsidiaries operating results from our Consolidated results immediately from that date forward.
Presents a departure from our previous plan to unwind it more gradually into early 2020.
6. Stop those losses sooner in conjunction with that action. We will decon the UK subsidiary in Q4.
And when we and we reported that we expect a significant non-cash. Write down as itemized in the report and again in Note 2 to our Q3 form 10 Q.
The major benefits of this approach, beyond sooner operating loss recognition, include the reduction of significant cash plant closure costs and an expectation for a material revolving credit facility borrowing reduction.
as distributions from the administrators from Liquidation proceeds are remitted to the secured creditor
Which is expected by around mid 2026.
To reiterate, we expected just that EBITDA to improve by $7 to $8 million for a full year.
Post the UK Decon consolidation, and that begins in early Q4 2025.
Now, back to Q3 results.
Amos net sales for the third quarter of 2025 or 108 million and increase of 12% compared to net sales for the third quarter of 2024,
The increase was primarily driven by higher sales in all three divisions of air and liquid processing.
Higher net role pricing and increased shipments of forged engineered products in the forge and cast engineered product segment more than offset soft roll ship and volumes during the quarter.
As I mentioned, we recorded 3.1 million in non-cash. Accelerated depreciation and other expenses in Q3 related to the exit of our UK cast role business and our small Alloys unlimited steel distribution business,
These expenses are spread by the perfect income statement line item in the Consolidated pnl. But our summarized for you in Note 2 to our Q3 form, 10 q and in the non-gaap reconciliation table attached to the Q3 earnings press release.
Referring to that non-GAAP reconciliation schedule, please note that consolidated adjusted EBITDA of $9.2 million for the third quarter of 2025 improved by $2.4 million versus the prior year.
This was driven by a few primary reasons.
Higher pricing and search charges net of changes and Manufacturing costs in the forest and cast engineered product segment.
Fire shipment volumes of Forge engineered products, which help to partially mitigate the impact of lower Mill. Roll shipment volumes
Unfavorable manufacturing overhead absorption compared to the prior year. The quarter related to temporary plant shutdowns, typically taken in Q3 of each year in the forest and cast engineered product segment.
And the higher shipment volumes and improved product mix experienced in the air and liquid processing segment.
2025 year to date adjusted Eva of 26 million remains up versus prior year.
Total selling and administrative expenses declined 6 million or 4% for Q3 2025 versus prior year due to employee lower employee related costs offset in part by professional fees associated, with our efforts, to exit the UK operations and higher sales Commissions in both segments.
Appreciation and amortization expense for the quarter and for the year to date are higher than prior year periods due to the accelerated depreciation portion of those exit charges associated with the UK and allies on limited steel distribution business.
Again, or part of those exit. Charges itemized and Note 2 in form 10 q and in that non-gaap reconciliation table.
Interest expense for the third quarter is approximately flat with prior year.
A change in other expense income. Net was driven primarily by lower foreign exchange transaction losses but also by lower pension income.
Given the lower expected long-term asset returns given the asset allocation changes. We've made to protect a much higher funded status of our us, defined benefit plans.
The income tax provision for 2025 is benefiting from a lower statutory tax rate than one of our foreign taxpaying jurisdictions.
As a result, net loss attributable to Ampco-Pittsburgh for the three months ended September 30, 2025, was $2.2 million, or $0.11 per share, which includes $3.1 million, or $0.15 per share, for the exit charges.
Referring to the non-gaap reconciliation. Schedule attached to the earnings release.
Please note that adjusted earnings per share of 4 cents for Q3 2025 was up 14 cents from the prior year. For the year-to-date period ending September 30, 2025, adjusted EPS of 3 cents was up 16%, or 16 cents per share.
So significant underlying Improvement there.
By September 30th 2025, the corporation's, liquidity position included cash on hand of $15 million and under on availability on our revolving credit facility of 28.2 million.
Operator. At least this time we would now like to open the line for questions.
We will now begin the question and answer session.
to ask a question, you may press star then 1 on your telephone keypad,
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if at any time your question has been addressed and you would like to withdraw your question, please press star then 2
At this time, we will pause momentarily to assemble our roster.
Again, if you have a question, please press star then 1
Our first question is from David Wright with the Henry investment. Trusts, please go ahead.
Good morning.
Good morning, Davis.
I um,
Couldn't let you go without anyone asking you questions because that's about the best rapport you've had in a long time.
um so congratulations, um 2 for Mike um on the UK closure and the question on the difference between
you know, bankruptcy filing in the US and this
Finding in the UK. Um, you address the operating results and being absolved of them. Um, is the subsidiaries' debt?
Or is the parent also absolved of that as a result of the filing?
Yes.
Yes. Yes. In fact, you know there's, going along with that, um, with that process. First of all, the insolvency is exclusively related to the subsidiary; it has nothing to do, it doesn't affect any other subsidiary, segment, or the entire, or, or, or Pittsburgh.
But um, you know that process um is something we have been thinking about but you know it uh as we got into more investigations on it, it became more evident that it was the best answer for for a did accelerate our exit.
um, and um,
you know, with third there is no no material, local debt other than the like the pension obligations which
Um, which are now, you know?
We were part of that business, um, and its other liabilities, but, um, we didn't have, um, direct debt. Um,
It never issued direct debt itself. Um, but we had significant closure costs, which were liabilities that we expected to incur, which we are no longer going to incur, David.
As charges. For example, Severance charge.
Something in the range of million dollars. Um,
That's, uh, that's going to be reversed as part of the Q4.
The consolidation.
So the secured debt is just secured against the UK assets.
Are you talking about the secured data? Are you talking about, um, the corporations' revolving credit facilities?
No, no, no. The the
um,
Yeah, those are primarily, um, you know, accounts payable incurred, um, accounts payable not, you know, that hadn't been paid yet, um.
Any other liabilities that were on the balance sheet of that? Um,
Of that subsidiary. Any liabilities, which materialized?
uh, as the real estate, uh, eventually gets liquidated
Uh, and any costs for the administration, uh, any commissions for the uh the sale of the assets.
Okay, I'll be handled out of this.
Remaining assets of the subsidiary. Yes.
Okay. The the other question for you Mike is you alluded to the pension plan. Um are you doing a a an evaluation again this year?
Uh, the pension plan, excuse me, the SBA ability.
Um, yes, we will.
Okay. So, is that going to be an annual thing now?
it has been in the last couple of years, we've uh, We've migrated to an annual an uh,
Of that, David. And we're going to do it again in Q4.
Okay. And then 1 for Dave. Uh, looks like your run rate based off the last quarter sales was $140.
Um, 140 million annualized. Um, and I know you, you you you you you order took a capacity expansion. You talk about the um the demand from pharmaceutical companies continuing. Um,
You know.
How much more, how much more can you put through the system?
We can put significantly more through the system, David. Um, and we're addressing that in multiple ways.
The equipment coming in through the Navy funding program, is state-of-the-art so we're getting significant improvements in manufacturing. Efficiencies.
we're also looking at other projects that our facilities to improve our utilization improve our efficiencies
We still have a long Runway.
And remind me, um, on, um, on on the nuclear plants. Like, where are you in the food chain? If they want to restart a plant, or they want to build a new 1,
Are you early or late?
We're usually early. Often, we have supplied the heat exchangers well in advance before they're opening the facility.
Uh, we've already been to some of the ones that are reopening and that was a while ago we were up in Michigan to the first 1.
So, we're early in the process.
All right. Great. Well, like I said, best quarter. You reported in a long time and, um, um hope, uh, hope lots of people see it. Thanks very much.
Thanks very much David.
The next question is from John Baer with Ascend Wealth Advisors, please go ahead.
Thank you. Good morning and I'll Echo the congrats on a good quarter here, my question kind of Cycles back to the um, discontinued operations. Um, will do you anticipate, um,
getting any kind of of, um,
of monetization, I guess from the liquidation of properties and so forth. And those operations or will it all go to the trustee? That's um,
you know, um,
The receivership I guess, uh, that, that settling that out.
Yeah, that's a very that's a good question. And um, actually we part of the, the answer to that is
Disclosed in the 8K, that we issued. Um, so you can read more about it there, but I'll give the overview really is, um, as the assets, get liquidated. Um,
are um,
Are settled first and the secured claims are apparent to be banked at. Those are the claims. Those are the uh, those are the, uh, the charge holders for the, uh,
Uh, on that legal entity, and, um, so that would be our bankrupt. And so that, the liquidation proceeds would first go and be remitted to the bank group, um, who would then, uh, reduce our our loan, our outstanding, uh, asset base loan balance, which is our revolving credit facility. So, yes, we do. Expect we had some projections from the administrator and we've, uh, We've analyzed those. And, um, we we've included those in our assessment of the net charge. We will record
In Q4 and we'll net that charge down by an estimated proceeds amount.
which is expected to be $8 to $9 million in net proceeds, um,
through that process.
So so that just 1 1 1 go 1 comment part of that is just Sam uh the the administrator uh they've continued to run the plant. So anything that was not that has already been through the melting process. Um they're finishing those rules turning them into finished goods and shipping them and Moni monetizing that uh you know which ends up being part of the funds that will end up funneling back through. Uh, so it's a double benefit number 1 that generates more value.
And number 2, it actually, you know, helps with our customers in the transition.
Uh, of closing the plant.
Okay. So, so just high high altitude, you're looking at possibly somewhere in the 8, 9 million that could flow back to you.
After this is all closed out, right? And, if yes, in the form of reduced bank debt. Yes. Okay. Okay. Okay. And then.
Following up on that, my understanding is that you'd be supplying, or hoping to supply, existing customers that have been served by that facility from your other European operations. Is that right?
Uh, portion of it. John this is Sam again. Uh, the the work roles. Uh, we will maximize the Sweden plant. So the the utilization there will will definitely increase um significantly. And then there was 1, 1 type of rule that we made, that cannot be made, uh, in Sweden. Some of them will be converted to forge rules. There's very limited Supply in the marketplace, so, we'll see some of that come to the US, uh, but there'll be an overall slight reduction in
Uh Revenue but obviously a big gain in profitability. Okay. So the Sweden plan will be more more efficient and more higher utilization. Is that a fair way to look at it?
That is a fair way to look at it. Yes.
Okay.
Great. Thank you very much for taking the questions.
All right. Thanks John.
This concludes our question and answer session, I would like to turn in the conference back over to Brett McBrayer for any closing remarks.
All right, in closing. I want to share an important corporate update and then leave you with a final thought on our path forward.
We recently announced the David Anderson will become our new CFO in January 1st 2026 while also continuing with his duties as president of air and liquid processing.
Days prior CFO experience, in both of our segments, positions him uniquely well for this expanded role.
Dave has a deep and tenured team at Aaron liquid processing, which gives us full confidence in his ability to manage both responsibilities and drive strong performance across the organization.
I also want to acknowledge and thank Mike McCauley for his significant contributions.
Mike will continue working for me as a strategic adviser for the first half of 2026.
To ensure a seamless transition.
Finally, I want to thank our employees who are making the positive improvements you heard about today?
Our message this quarter is clear: our core business is improving, and we have taken the difficult but necessary steps to address our underperforming assets.
By exiting the UK in our small steel distribution business AUP. We are removing the most significant drags on our profitability.
We entered 2026 stronger, more focused and a more profitable company.
I want to thank the board of directors and our shareholders for your continued support.
Thank you for joining our call this morning.
The conference is now concluded. Thank you for attending today's presentation. You may now disconnect