Ampco-Pittsburgh Corporation Q4 2025 Earnings Call Summary

1Key Financial Results and Metrics

Q4 2025 Adjusted EBITDA: $3.2 million, down from $6 million in Q4 2024.

Full-Year 2025 Adjusted EBITDA: $29.2 million, an increase of $1.1 million year-over-year.

Q4 2025 Net Sales: $108.8 million, up $7.8 million from Q4 2024.

Full-Year 2025 Net Sales: $434.2 million, a slight increase of $3.8 million compared to the prior year.

Air and Liquid Processing Segment: Q4 revenue increased by 10% year-over-year; full-year revenue was up 7%.

Forged and Cast Engineered Products (FCEP): Q4 net sales were $70.9 million, with a full-year total of $292.6 million.

2Strategic Updates and Business Highlights

The company completed the removal of underperforming assets, expected to enhance adjusted EBITDA by $7 million to $8 million annually.

Air and Liquid Processing achieved record revenue and income in 2025, driven by strong demand in air handlers and heat exchangers.

The FCEP segment is focusing on optimizing operations in Sweden after the closure of the U.K. facility, with plans for a production ramp-up in 2026.

Significant order activity was noted for both segments at the start of 2026, with bookings up 73% year-over-year.

3Forward Guidance and Outlook

The company anticipates improved profitability as it emerges from the steel market slowdown, with expectations of stronger demand in 2026.

The FCEP segment is expected to benefit from increased utilization due to stricter European quotas and tariffs set to take effect in 2026.

The Air and Liquid segment is well-positioned for growth, particularly in the nuclear and U.S. Navy markets.

4Bad News, Challenges, or Points of Concern

Q4 performance was negatively impacted by a pause in customer orders in the FCEP segment due to new global tariffs.

The FCEP segment reported a significant operating loss of $44.7 million for the full year, primarily due to one-time exit costs, including a $41.4 million deconsolidation charge.

Backlog for Air and Liquid Processing declined by $8 million due to the U.S. Navy's termination of the Constellation frigate program.

Currency fluctuations (particularly SEK and euro) present ongoing cost pressures, impacting margins.

5Notable Q&A Insights

Management indicated that the unusual mix in Q4 for Air and Liquid Processing was a short-term issue, with the full year being more representative of typical performance.

The recovery in the roll market is expected as customers adjust to tariff impacts, with demand slowly increasing in the U.S.

There is optimism regarding the nuclear market, with ongoing inquiries and expected activity related to Westinghouse's AP1000 reactors, although timing remains uncertain.

Management highlighted that the asbestos accrual adjustment does not indicate an increase in future payments, but rather a slower decrease than previously projected. Overall, Ampco-Pittsburgh Corporation is navigating through a transitional phase with strategic asset removals and operational optimizations aimed at enhancing profitability in 2026, despite facing challenges from market fluctuations and one-time charges.