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AP

AMPCO PITTSBURGH CORP (AP)·Q3 2025 Earnings Summary

Executive Summary

  • Q3 2025 revenue grew 12.3% year over year to $108.0M; adjusted EBITDA rose 35% YoY to $9.2M with adjusted EBITDA margin expanding to 8.53% .
  • GAAP diluted EPS was $(0.11); adjusted EPS improved to $0.04, up $0.14 YoY as exit-related charges of $3.1M (incl. accelerated D&A) weighed on GAAP results .
  • Management accelerated the exit of the U.K. cast roll operations (effective Oct 14, 2025); expects deconsolidation in Q4 and at least $7–$8M annual adjusted EBITDA improvement, a raise from the prior $5M OI improvement target; a non‑cash Q4 impairment of $43–$45M is expected .
  • Liquidity remained solid with $15M cash and $28.2M of undrawn revolver availability at quarter-end; expected liquidation proceeds from the U.K. administrator of ~$7–$9M will reduce revolver borrowings by mid‑2026 .

What Went Well and What Went Wrong

What Went Well

  • Air & Liquid Processing delivered the best year-to-date performance in its history; Q3 segment-adjusted EBITDA was $4.4M vs. $3.4M prior year, driven by higher revenue and improved mix .
  • Decisive portfolio actions: accelerated exit from U.K. cast rolls and planned wind-down of a small steel distribution business (AUP), removing major drags and positioning for structurally higher profitability; “We expect $7 to $8 million per full year Adjusted EBITDA improvement…” .
  • Pricing discipline and product mix in Forged & Cast Engineered Products (FCEP) supported YoY adjusted EBITDA improvement despite softer roll shipments; FCEP segment-adjusted EBITDA reached $7.1M (+$0.3M vs. Q2) .

What Went Wrong

  • Tariff volatility and customer pauses impacted roll demand and shipment timing; management cited temporary plant shutdowns and weaker roll volumes in Q3 .
  • GAAP results included $3.1M non-cash exit charges (incl. $2.4M accelerated depreciation), reducing EPS by ~$0.15; interest expense remained comparable YoY at $3.0M, still a headwind .
  • European imports face elevated tariffs (Sweden 15–27%, Slovenia up to 50%); the near-term environment is complex though management expects tariff effects to be temporary .

Financial Results

MetricQ3 2024Q1 2025Q2 2025Q3 2025
Revenue ($USD Millions)$96.166 $104.265 $113.104 $108.009
Income from Operations ($USD Millions)$1.870 $3.850 $(3.078) $1.123
Net Income (Loss) ($USD Millions)$(1.959) $1.142 $(7.335) $(2.211)
Diluted EPS ($USD)$(0.10) $0.06 $(0.36) $(0.11)
Adjusted EBITDA ($USD Millions)$6.828 $8.792 $7.983 $9.210
Adjusted EBITDA Margin (%)7.10% 8.43% 7.06% 8.53%

Segment breakdown

Segment MetricQ3 2024Q1 2025Q2 2025Q3 2025
FCEP Net Sales ($USD Millions)$67.203 $72.287 $77.909 $71.467
ALP Net Sales ($USD Millions)$28.963 $31.978 $35.195 $36.542
FCEP Adjusted Margin (%)10.11% 11.44% 8.68% 9.89%
ALP Adjusted Margin (%)11.67% 11.76% 11.16% 12.16%

Selected KPIs

KPIQ1 2025Q2 2025Q3 2025
Interest Expense ($USD Millions)$2.726 $2.825 $3.001
Depreciation & Amortization ($USD Millions)$4.636 $5.368 $7.091
Exit/Severance & Other Costs ($USD Millions)—$6.096 $3.069
Liquidity (Cash; Undrawn Revolver)——$15.0M cash; $28.2M undrawn

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Adjusted EBITDA Improvement (post U.K. exit)Annual run-rate (post exit)≥$5M OI improvement (Q2 plan) $7–$8M per year adjusted EBITDA improvement Raised
Non‑cash Impairment Charge (deconsolidation of UES‑UK)Q4 2025N/A$43–$45M charge expected New
Liquidation Proceeds Applied to RevolverBy ~mid‑2026N/A~$7–$9M (admin proceeds) to secured creditors, reducing revolver New
U.K. Exit TimingOperations wind‑downSpring 2026 (initial plan) Effective Oct 14, 2025 via administration Accelerated

Earnings Call Themes & Trends

TopicPrevious Mentions (Q1 & Q2 2025)Current Period (Q3 2025)Trend
Tariffs & MacroIntent to pass tariffs; customer pauses, baseline tariff 15%; backlog down 9% in FCEP Sweden 15–27%, Slovenia up to 50%; clients lowered inventories; EU plans new quota/tariff regime (July 2026) raising tariff to 50% on over‑quota imports Near‑term headwind; medium‑term normalization; potential 2026 tailwind
ALP Performance & End MarketsRecord Q1 orders; Q2 backlog +8%; adjusted EBITDA +15% YoY Best YTD ever; Q3 revenue +26% YoY; nuclear, Navy, pharma strength; capacity expansion underway Strengthening; structural growth drivers
U.K. Exit & Portfolio ActionsPlanned exit; ≥$5M annual OI improvement expected Accelerated exit; $7–$8M annual adjusted EBITDA improvement; Q4 deconsolidation Stronger improvement, faster timing
Liquidity & CapitalCredit agreement amended/extended; liquidity detailed $15M cash; $28.2M undrawn; expected proceeds reduce revolver Adequate liquidity; deleveraging expected
Regulatory/LegalAnnual asbestos liability evaluation moving to Q4 cadence Continuing annual evaluation in Q4 Ongoing risk management

Management Commentary

  • CEO: “We have taken major steps to quicken that momentum into 2026… The impact from our U.K. exit alone is expected to improve full-year adjusted EBITDA by $7-$8 million.”
  • CFO: “Consolidated adjusted EBITDA of $9.2 million… improved by $2.4 million versus prior year… Q4 deconsolidation of the U.K. subsidiary will avoid significant cash plant closure costs and reduce revolving credit borrowings as administrator proceeds are remitted.”
  • FCEP President: “Imports to the U.S. from Sweden now face tariffs between 15%–27%, and products from Slovenia face rates as high as 50%… Europe’s 2026 quota/tariff system has the potential to be a significant tailwind for our roll business.”
  • ALP President: “2025 will be the best year in Air & Liquid Systems’ history… strong nuclear, Navy and pharmaceutical demand… capacity expansion underway via Navy funding program.”
  • Press release: “We will have fundamentally changed the earnings power of our portfolio… We expect $7 to $8 million per full year Adjusted EBITDA improvement following the U.K. exit.”

Q&A Highlights

  • U.K. administration mechanics: Insolvency confined to the subsidiary; parent absolved of local debts except pension obligations; previously recorded ~$7M severance expected to reverse with Q4 deconsolidation .
  • Proceeds and debt: Administrator liquidation proceeds (~$8–$9M) will flow to secured creditors first, reducing the ABL revolver balance; plant continues finishing in‑process rolls to maximize value and aid customer transition .
  • Capacity and mix: Sweden cast roll facility utilization expected to increase in 2026; some U.K. products will convert to forged rolls, with slight revenue reduction but improved profitability .

Estimates Context

Wall Street consensus for Q3 2025 EPS and revenue was unavailable through S&P Global for AP this quarter; comparison to estimates cannot be provided. Values retrieved from S&P Global.*

MetricQ1 2025Q2 2025Q3 2025
Primary EPS Consensus Mean—*—*—*
Revenue Consensus Mean ($USD)—*—*—*

Note: Actuals are included in the Financial Results tables above. Values retrieved from S&P Global.*

Key Takeaways for Investors

  • The accelerated U.K. exit is a structural pivot: management raised the improvement target to $7–$8M annual adjusted EBITDA, beginning Q4, with avoided cash closure costs and expected revolver reductions from administrator proceeds; this should be a key re‑rating catalyst into 2026 .
  • ALP segment momentum is durable across nuclear, Navy, and pharma end‑markets; segment-adjusted margin expanded to 12.16% in Q3, supporting consolidated margin resilience .
  • FCEP pricing discipline and product mix continue to offset roll shipment softness; EU 2026 quota/tariff reforms may drive higher mill utilization, potentially benefiting roll demand long‑term .
  • Near‑term GAAP noise from Q4 deconsolidation (non‑cash $43–$45M charge) is a one‑time item; focus should remain on adjusted profitability trajectory post‑exit .
  • Liquidity is adequate ($15M cash; $28.2M undrawn), and proceeds from U.K. administration (~$7–$9M) should reduce borrowings by mid‑2026, enhancing balance sheet flexibility .
  • Estimate visibility remains limited (consensus unavailable via S&P Global), but management’s raised EBITDA improvement range suggests upward bias to 2026 profitability assumptions. Values retrieved from S&P Global.*
  • Watch tariff/regulatory developments: while short‑term volatility persists, inventory normalization and EU policy changes could support demand normalization and margin stability in 2026 .