Ampco-Pittsburgh Corporation Q3 FY2025 earnings call

Management Statement and Operational Highlights

• Financial Performance: Consolidated adjusted EBITDA for Q3 2025 was $9.2 million, up 35% from prior year. Adjusted earnings per share were $0.04, up $0.14 from prior year.
• Strategic Actions: Accelerated exit from U.K. facility and small steel distribution business AUP. U.K. exit expected to improve full year adjusted EBITDA by $7 million to $8 million.
• Segment-Specific: FCEP saw improved demand and shipments, with year-to-date revenue up 40%. Air and Liquid had record year-to-date adjusted EBITDA, driven by strong demand in nuclear, Navy, and pharmaceutical sectors, and ongoing capacity expansions.

Segment Performance

• Forged and Cast Engineered Products (FCEP): Q3 2025 net sales were $71.5 million, $6.4 million lower than Q2 2025 but $4.3 million higher than Q3 2024. Year-to-date FEP revenue increased approximately 40% to $14.4 million compared to $10.2 million last year. Segment adjusted EBITDA (excluding exit charges) was $7.1 million higher than Q2 and $0.3 million better than Q3 2024. Tariffs have impacted market dynamics, but long-term fundamentals remain strong.
• Air and Liquid Systems: Q3 2025 revenue was 26% higher than prior year. Year-to-date revenue was nearly 7% above prior year. Segment adjusted EBITDA in Q3 was $4.4 million, up 31% from prior year. Year-to-date segment adjusted EBITDA of $12.1 million was the highest in Air and Liquid's history. Strong demand in nuclear, U.S. Navy, and pharmaceutical markets.

Guidance

• Expect adjusted EBITDA to improve by $7 million to $8 million per full year post-U.K. deconsolidation, starting in early Q4 2025.
• Air and Liquid expects continued growth in nuclear, Navy, and pharmaceutical markets due to expanding capacities and strong demand.

Risks

• Tariff uncertainties affecting Canadian and Mexican customers, and European imports.
• Potential short-term supply chain fluctuations due to tariff adjustments.

Question and Answer

Q: Discussion on U.K. closure debt and pension/asbestos liability A: Insolvency related to U.K. subsidiary, no impact on parent company. Pension and asbestos liability evaluated annually, with next evaluation in Q4.

Q: Capacity expansion and nuclear plant position A: Significant capacity expansion with new equipment from Navy funding program. Ampco is early in the nuclear plant supply chain, having supplied heat exchangers in advance of plant openings.

Q: Monetization of U.K. operations and supply from Sweden A: Proceeds from U.K. liquidation to reduce parent company's revolving credit facility debt. Sweden plant to have higher utilization, with some roll production shifted to forged rolls to meet market needs