CARNEGIE, Pa.–(BUSINESS WIRE)–Ampco-Pittsburgh Corporation (NYSE: AP) reported net sales of $86.8 million for the three months ended March 31, 2021, compared to $91.1 million for the three months ended March 31, 2020. The decrease is primarily attributable to lower shipments of mill rolls than pre-pandemic levels, offset in part by higher shipments of forged engineered products.
Income from operations for the three months ended March 31, 2021, was $0.9 million, compared to $4.4 million for the three months ended March 31, 2020. The decline primarily reflects the impacts of lower shipments, lower cost absorption associated with reduced production levels, higher raw material costs net of pass-throughs, a less favorable sales mix of mill rolls, and an insurance recovery of $0.8 million which benefited the prior year period.
Interest expense for the three months ended March 31, 2021, declined in comparison to the prior year based on reduced debt, which remained sequentially stable with the prior quarter. Loss on foreign exchange was $1.2 million for the three months ended March 31, 2021. Other – net improved from a year ago, however, as foreign exchange losses were lower in the current year and an unrealized gain was recorded on Rabbi Trust investments in the current year compared to a loss in the prior year.
Earnings per share was $0.01 for the three months ended March 31, 2021, compared to $0.33 per share for the three months ended March 31, 2020, which included a $0.34 per share combined benefit for the CARES Act tax loss carryback and the proceeds from the insurance claim.
Commenting on the quarter, Ampco-Pittsburgh’s CEO, Brett McBrayer, said, “Despite the pandemic’s lingering impact on our global operations, we continue to demonstrate our resilience, delivering another positive quarter. These results reflect a significant negative foreign exchange impact as well as higher production costs due in part to lower production levels in our Forged and Cast Engineered Products facilities. We anticipate a recovery in order activity for our roll business in the second half of the year as customer inventories deplete with expected higher mill utilization rates. Our forged engineered products continue to gain traction in the marketplace and demand in our Air and Liquid Processing segment remains solid. I’m very excited about our capital equipment investment activities, which commenced during the quarter, and the significant impact these actions will have on future profitability and growth.”
Segment Results
Forged and Cast Engineered Products
Sales from operations for the three months ended March 31, 2021, declined from the prior year period primarily due to lower pandemic-related demand for mill rolls, offset in part by increased shipments of forged engineered products for the oil and gas and steel distribution industries. Operating results for the three months ended March 31, 2021, declined compared to the prior year due to lower shipments, lower cost absorption from resulting reduced production levels, higher raw material costs net of pass-throughs, a less favorable product mix, and proceeds from a business interruption insurance claim which benefited the prior year period.
Air and Liquid Processing
Sales for the Air and Liquid Processing segment for the three months ended March 31, 2021, increased compared to the prior year quarter primarily due to higher demand for centrifugal pumps, offset in part by lower shipments of heat exchange coils. Operating results for the three months ended March 31, 2021, was approximately stable with the prior year quarter.
About Ampco-Pittsburgh Corporation
Ampco-Pittsburgh Corporation manufactures and sells highly engineered, high-performance specialty metal products and customized equipment utilized by industry throughout the world. Through its operating subsidiary, Union Electric Steel Corporation, it is a leading producer of forged and cast rolls for the global steel and aluminum industry. It also manufactures open-die forged products that principally are sold to customers in the steel distribution market, oil and gas industry, and the aluminum and plastic extrusion industries. The Corporation is also a producer of air and liquid processing equipment, primarily custom-engineered finned tube heat exchange coils, large custom air handling systems, and centrifugal pumps. It operates manufacturing facilities in the United States, England, Sweden, Slovenia, and participates in three operating joint ventures located in China. It has sales offices in North and South America, Asia, Europe, and the Middle East. Corporate headquarters is located in Carnegie, Pennsylvania.
