Ampco-Pittsburgh Corporation (NYSE: AP) reported sales for the
three and twelve months ended December 31, 2017, of $114.4 million
and $432.4 million, respectively, compared to $92.1 million and
$331.9 million, respectively, for the three and twelve months ended
December 31, 2016. The current year periods include sales of $10.9
million and $47.2 million, respectively, associated with the
November 2016 acquisition of ASW Steel Inc. (“ASW”), compared to
$7.5 million in the prior year periods. In addition, the
Corporation experienced higher sales of forged engineered products
for the oil and gas industry and, to a lesser extent, higher sales
of forged and cast mill rolls for both the three and twelve months
ended December 31, 2017. Sales in the Air and Liquid Processing
segment also rose modestly compared to the respective prior year
periods.
Loss from operations for the three and twelve months ended
December 31, 2017, was $1.8 million and $9.4 million, respectively,
compared to loss from operations of $39.8 million and $54.5 million
for the respective prior year periods. The 2016 periods included
charges for impairment of $26.7 million, primarily from the
impairment of goodwill in the Forged and Cast Engineered Products
reporting unit (“Impairment Charge”), a $4.6 million net charge
associated primarily with revaluing the estimated liabilities and
insurance receivables for asbestos litigation through 2026
(“Asbestos Charge”), and a $1.5 million reserve against a
receivable from a customer who filed for Chapter 11 bankruptcy
protection. The full year 2016 also included significant
acquisition-related expenses and integration costs. The full year
2017 includes a $1.3 million recovery associated with a customer
Chapter 11 receivable.
Other expense – net for the three months ended December 31,
2017, declined compared to the prior year, primarily due to a small
foreign exchange gain in the current year versus losses in the
prior year quarter. For the full year, other expense – net
increased against the prior year primarily as a result of higher
interest expense.
The income tax (provision) benefit for the three and twelve
months ended December 31, 2017, reflects an unfavorable net impact
of approximately $1.6 million related to the new U.S. Tax Cuts and
Jobs Act legislation.
Net loss for the three and twelve months ended December 31,
2017, was $3.2 million, or $0.26 per common share, and $12.1
million, or $0.98 per common share, respectively, compared to net
loss for the three and twelve months ended December 31, 2016, of
$43.1 million, or $3.51 per common share, and $79.8 million, or
$6.68 per common share, respectively. In addition to the Impairment
Charge and Asbestos Charge, which impacted the full year 2016 net
loss per share by $2.23 and $0.38, respectively, the full year 2016
net loss also included valuation allowances of $30.4 million
against the majority of the Corporation’s deferred income tax
assets, which impacted net loss per share by $2.54.
Sales for the Forged and Cast Engineered Products segment for
the three and twelve months ended December 31, 2017 increased 30%
and 39%, respectively, versus prior year, reflecting the full
period effect of the ASW acquisition, significantly higher sales of
forged engineered products for the oil and gas industry, and higher
sales of mill rolls to the global steel industry, primarily for hot
strip mills. The segment recorded a small operating income for the
quarter and an operating loss for the full year of less than $2
million. Even after considering the non-recurring Impairment
Charge, acquisition-related expenses and integration costs, and a
customer’s Chapter 11 receivable reserve recorded in the prior year
periods, the segment’s operating performance improved
significantly. This was driven by the higher sales volumes and
pricing, offset in part by higher operating and raw material costs
and an unfavorable absorption effect from the idling of a cast roll
foundry.
Sales for the Air and Liquid Processing segment increased 5% for
the three months ended December 31, 2017 and 4% for full year 2017
compared to the prior year periods as higher shipment volumes of
custom air handlers and heat exchange coils more than offset lower
shipment volumes of centrifugal pumps. The segment’s operating
income rose significantly for the quarter and full year compared to
prior year, given the $4.6 million Asbestos Charge recorded last
year, but improved further on an operating basis from the higher
shipment volumes.
Corporate costs for the three and twelve months ended December
31, 2017 increased $0.8 million and $1.2 million, respectively,
compared to the comparable prior year periods as higher staffing
costs associated with the Corporation’s increased scale, higher
fringe benefits and higher professional fees more than offset the
reduction in acquisition-related costs incurred in the prior
year.
Commenting on the quarter and full year results, John Stanik,
Ampco-Pittsburgh’s Chief Executive Officer said, “Although we
missed our objective of returning to operating profitability by the
end of 2017, we made significant year-over-year improvement on an
operational basis. We saw recovery in both the steel and fracking
businesses after periods of decline, and we are addressing our
process and equipment bottlenecks to meet a solid ramp-up and
robust order book. I am very encouraged by our progress in Q4 and I
am excited about 2018.”
Teleconference Access
Ampco-Pittsburgh Corporation (NYSE: AP) will hold a conference
call on Wednesday, March 14, at 10:30 a.m. Eastern Time (ET) to
discuss its financial results for the fourth quarter ended December
31, 2017. If you would like to participate in the conference call,
please register using the link below or by dialing 1-844-308-3408
at least five minutes before the 10:30 a.m. ET start time.
We encourage participants to pre-register for the conference
call using the following link. Callers who pre-register will be
given a conference passcode and unique PIN to gain immediate access
to the call and bypass the live operator. Participants may
pre-register at any time, including up to and after the call start
time.
To pre-register, please go to:
http://dpregister.com/10117118
Those without internet access or unable to pre-register may dial
in by calling:
- Participant Dial-in (Toll Free):
1-844-308-3408
- Participant International Dial-in:
1-412-317-5408
For those unable to listen to the live broadcast, a replay will
be available one hour after the event concludes on our website
under the Investors menu at www.ampcopgh.com.
The Private Securities Litigation Reform Act of 1995 (the “Act”)
provides a safe harbor for forward-looking statements made by or on
our behalf. This news release may contain forward-looking
statements that reflect our current views with respect to future
events and financial performance. All statements in this document
other than statements of historical fact are statements that are,
or could be, deemed forward-looking statements within the meaning
of the Act. In this document, statements regarding future financial
position, sales, costs, earnings, cash flows, other measures of
results of operations, capital expenditures or debt levels and
plans, objectives, outlook, targets, guidance or goals are
forward-looking statements. Words such as “may,” “intend,”
“believe,” “expect,” “anticipate,” “estimate,” “project,”
“forecast” and other terms of similar meaning that indicate future
events and trends are also generally intended to identify
forward-looking statements. Forward-looking statements speak only
as of the date on which such statements are made, are not
guarantees of future performance or expectations, and involve risks
and uncertainties. For Ampco-Pittsburgh, these risks and
uncertainties include, but are not limited to, those described
under Item 1A, Risk Factors, of Ampco-Pittsburgh’s Annual Report on
Form 10-K. In addition, there may be events in the future that we
are not able to predict accurately or control which may cause
actual results to differ materially from expectations expressed or
implied by forward-looking statements. Except as required by
applicable law, we assume no obligation, and disclaim any
obligation, to update forward-looking statements whether as a
result of new information, events or otherwise.
AMPCO-PITTSBURGH
CORPORATION
FINANCIAL
SUMMARY
(Dollars in thousands except per share amounts; shares
outstanding in thousands)
Three Months
Ended
Twelve Months
Ended
December
31
December
31
2017
2016
2017
2016
Sales
$ 114,449 $ 92,126
$ 432,401 $
331,866 Cost of products sold (excl.
depreciation and amortization) 93,697 80,672 357,672 276,496
Selling and administrative 16,866 14,435 61,310 58,175 Depreciation
and amortization 5,368 5,518 22,387 20,463 Charge (credit) for
asbestos litigation - 4,565 - 4,565 Charges for impairment - 26,676
- 26,676 Loss on disposition of assets
292
30 401
21 Total operating expense
116,223
131,896 441,770
386,396 Loss from operations (1)
(1,774 ) (39,770 ) (9,369 ) (54,530 ) Other expense – net
(1,299 ) (2,355 )
(4,324 )
(2,990 ) Loss
before income taxes (3,073 ) (42,125 ) (13,693 ) (57,520 ) Income
tax (provision) benefit (416 ) (1,085 ) 1,355 (22,712 ) Equity
gains in joint venture
501 308
1,036 423
Net loss before noncontrolling interest (2,988 ) (42,902 )
(11,302 ) (79,809 ) Net income attributable to noncontrolling
interest
203 160
787 11 Net loss
attributable to Ampco-Pittsburgh (2)
$ (3,191 )
$ (43,062 )
$ (12,089 )
$
(79,820 ) Net loss per common share
attributable to Ampco-Pittsburgh: Basic (2)
$ (0.26 )
$ (3.51 )
$ (0.98 )
$
(6.68 ) Diluted (2)
$ (0.26 )
$
(3.51 )
$ (0.98 )
$
(6.68 ) Weighted-average number of common
shares outstanding: Basic
12,361
12,271 12,330
11,951 Diluted
12,361
12,271 12,330
11,951
(1)
For the three and twelve months ended
December 31, 2016, includes charges of $26,676 principally for the
write-off of goodwill in the Forged and Cast Engineered Products
reporting unit deemed to be impaired and, for our Air and Liquid
Processing segment, a net pre-tax charge of $4,565 for estimated
costs of asbestos-related litigation through 2026, net of estimated
insurance recoveries, and a settlement with an insurance carrier
for an amount in excess of the receivable estimated. For the twelve
months ended December 31, 2016, also includes approximately $7,500
in acquisition-related costs and purchase accounting impacts.
(2)
For the three months ended December 31,
2016, includes charges of $26,676 or $2.17 per common share
principally for the write-off of goodwill in the Forged and Cast
Engineered Products reporting unit deemed to be impaired and, for
our Air and Liquid Processing segment, a net pre-tax charge of
$4,565 or $0.37 per common share for estimated costs of asbestos
litigation through 2026, net of estimated insurance recoveries, and
a settlement with an insurance carrier for an amount in excess of
the receivable estimated. For the twelve months ended December 31,
2016, includes charges of $26,676 or $2.23 per common share
principally for the write-off of goodwill in the Forged and Cast
Engineered Products reporting unit deemed to be impaired, $30,405
or $2.54 per common share to recognize a valuation allowance
against certain deferred income tax assets, approximately $7,500 or
$0.63 per common share in acquisition-related costs and purchase
accounting impacts, and $4,565 or $0.38 per common share for
estimated costs of asbestos-related litigation through 2026, net of
estimated insurance recoveries, and a settlement with an insurance
carrier for an amount in excess of the receivable estimated.
View source
version on businesswire.com: http://www.businesswire.com/news/home/20180314005518/en/
Ampco-Pittsburgh CorporationMichael G. McAuley, 412-429-2472Vice
President, Chief Financial Officer and Treasurermmcauley@ampcopgh.com
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