AP — Ampco-Pittsburgh Corporation

Ampco-Pittsburgh Corporation Q4 2025 Earnings Call Summary

1. Key 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.

2. Strategic 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.

3. Forward 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.

4. Bad 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.

5. Notable 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.