Ampco-pittsburgh Corporation · NYSE:AP
Ampco-pittsburgh — Investor Presentation (July 2020)
39 slides from Ampco-pittsburgh's investor presentation, July 2020
Slide 1: Investor Presentation
Producing Quality Products Since 1929 — Always Moving Forward! Investor Presentation July 2020
Slide 2: Rights Offering Disclaimer
Rights Offering Disclaimer This free writing prospectus relates to the proposed offering (the “Rights Offering”) of subscription rights to purchase units of Ampco-Pittsburgh Corporation, a Pennsylvania corporation (the “Corporation), each unit consisting of shares of common stock of the Corporation,
Slide 3: Disclaimer: Forward-Looking Statements
Disclaimer Forward-Looking Statements The Private Securities Litigation Reform Act of 1995, as amended (the “Act”) provides a safe harbor for forward-looking statements made by or on behalf of the Corporation. The information offered in this presentation may include, but are not limited to, statemen
Slide 4: Non-GAAP Financial Measures
Non-GAAP Financial Measures The Corporation presents certain non-GAAP financial measures, including adjusted income (loss) from continuing operations and adjusted EBITDA, as supplemental financials measure to GAAP financial measures regarding the Corporation’s operational performance. These non-GAAP
Slide 5: Rights Offering Registration Filed
Rights Offering Registration Filed • Ampco-Pittsburgh Corporation (NYSE: AP) (the "Corporation") announced on June 26th 2020, that it had filed a registration statement on Form S-1 with the Securities and Exchange Commission (the "SEC") for a proposed rights offering. • Ampco-Pittsburgh intends to u
Slide 6: The Vision
The Vision Our Vision is Simple: #1 Market Share position for the customers we serve – Top Line Growth Deliver an annual Minimum Net Income of $25M – Financial Resilience - Target Double Digit EBITDA Margin - Ampco-Pittsburgh Investor Presentation 6
Slide 7: Legacy Challenges Being Addressed
Legacy Challenges Being Addressed Underperforming and underutilized assets Significant gaps in leadership Poor productivity impacting costs, product lead time, and predictability of performance Complex flow path and excessive overhead structure driving unnecessary costs Ampco-Pittsburgh Investor Pre
Slide 8: The Plan of Attack
The Plan of Attack Divest underperforming and non-core businesses Replace key leadership positions Maximize core assets through operational efficiency improvements growing margins, customer share, and opening new markets Consolidate manufacturing footprint through asset upgrades further reducing ove
Slide 9: The Plan of Attack
The Plan of Attack Divest underperforming and non-core businesses Replace key leadership positions Maximize core assets through operational efficiency improvements growing margins, customer share, and opening new markets Consolidate manufacturing footprint through asset upgrades further reducing ove
Slide 10: CAPEX and Use of Funds
CAPEX and Use of Funds Current State – 3 Forge Facilities Future State – 2 Forge Facilities 18 to 36 Month Timeline – Machine OEM Dependent Replace Single-Purpose Machines with Multi-Purpose Machines ✓ Efficiency Improvements ✓ Working Capital Reduction ✓ Labor Savings ✓ Transportation Savings ✓ Rep
Slide 11: Turnaround Strategy is working!
Turnaround Strategy is working! New Leadership • Brett McBrayer introduced as new CEO in July 2018 with a focus on operational improvements, reducing complexity, and rightsizing the business for future growth and profitability • Sam Lyon appointed Segment President with new plan to reduce costs, str
Slide 12: Consolidated Financial Trend Improvement
Consolidated Financial Trend Improvement ($MM’s) $30.0 $450.0 5.8% (Loss) income from continuing operations & Adjusted EBITDA 4.3% 3.8% $0.0 $300.0 Net Sales ($30.0) $150.0 ($60.0) $0.0 2016 2017 2018 2019 (Loss) income from continuing operations, as reported (GAAP) (Loss) income from continuing ope
Slide 13: Consolidated Financial Quarterly Trend
Consolidated Financial Quarterly Trend ($MM’s) $10.0 $120.0 (Loss) income from continuing operations & Adjusted EBITDA 8.6% 6.8% 5.5% 5.7% 6.3% 5.3% 4.1% 4.4% 1.6% Net Sales $0.0 $60.0 ($10.0) ($40.1) ($12.0) $0.0 2018 Q1 2018 Q2 2018 Q3 2018 Q4 2019 Q1 2019 Q2 2019 Q3 2019 Q4 2020 Q1 (Loss) income
Slide 14: Ampco-Pittsburgh Corporation
Ampco-Pittsburgh Corporation A manufacturer of highly engineered, high-performance specialty metal products and customized equipment utilized by industry throughout the world. Forged and Cast Engineered Products Manufactures and develops metallurgical alloys and Headquarters: Carnegie, PA, U.S. proc
Slide 15: Ampco-Pittsburgh Global Footprint
Ampco-Pittsburgh Global Footprint North Tonawanda, NY Gateshead, England Åkers Styckebruk, Sweden Ravne na Koroškem, Slovenia Valparaiso, IN Austintown, OH Taiyuan, China Erie, PA Xinjian Town Yixing, China Amherst, VA Maanshan, China Carnegie, PA Lynchburg, VA Burgettstown, PA Locations Manufacturi
Slide 16: Ampco-Pittsburgh Corporation
Ampco-Pittsburgh Corporation 2019 Revenue* $305.6M $92.3M 2018 Revenue* $329.5M $89.9M 2017 Revenue* $297.3M $87.9M * From Continuing Operations Ampco-Pittsburgh Investor Presentation 16
Slide 17: Ampco-Pittsburgh Customers
Ampco-Pittsburgh Customers Ampco-Pittsburgh Investor Presentation 17
Slide 18: Forged and Cast Engineered Products
Forged and Cast Engineered Products $306M 2019 NET SALES* A world-leading manufacturer and partner for our rolling mill customers in the development of specialty alloys for forged and cast rolls. Produces ingot and forged engineered products used Forged Engineered in industries such as automotive to
Slide 19: Key Rolling Mill Customers
Key Rolling Mill Customers DIVERSIFIED BASE OF GLOBALLY RECOGNIZABLE CUSTOMERS Ampco-Pittsburgh Investor Presentation 19
Slide 20: End Markets for Forged and Cast Engineered Products
End Markets for Forged and Cast Engineered Products Source: World Steel Association Steel and aluminum play critical roles in virtually every phase of our lives. Ampco-Pittsburgh Investor Presentation 20
Slide 21: What is a “Roll”?
What is a “Roll”? • A sheet of metal will pass through a series of rolls, flattening the metal like a rolling pin for dough until the required thickness profile is achieved. • Rolls are consumables; our customers provide the “razor” (the rolling mill); we provide the “blade” (the rolls). Ampco-Pitts
Slide 22: Hot Rolled Strip Mill Manufacturing Process
Hot Rolled Strip Mill Manufacturing Process This video is the result of a collaboration between the Association for Iron & Steel Technology (AIST) and Purdue University Calumet’s Center for Innovation Through Visualization and Simulation (CIVS) with contributions from the Colorado School of Mines’ A
Slide 23: Competitive Advantages
Competitive Advantages The Industry’s Needs Union Electric Steel’s Solutions Over 75% of aluminum and The largest non-government steel products require owned roll manufacturer in rolling the world Wide range of roll types Provides the most diverse required for varying range of roll types and applica
Slide 24: Diversification into Open-Die Forging Market
Diversification into Open-Die Forging Market Manufacturing requirements for open-die forge market are a strong match for our manufacturing assets Open-die forgings are used in a variety of Open-die Forge Addressable Market = $800M+ industries: • Union Electric Market Share = 2.4% Aerospace Others En
Slide 25: Open-die Forging Market
Open-die Forging Market Activity is currently underway with customers requiring custom forged steel products for bridges, power generation, building construction, and more! Ampco-Pittsburgh Investor Presentation 25
Slide 26: Forging Process
Forging Process This video is the result of a collaboration between the Association for Iron & Steel Technology (AIST) and Purdue University Calumet’s Center for Innovation Through Visualization and Simulation (CIVS) with contributions from the Colorado School of Mines’ Advanced Steel Processing and
Slide 27: Air and Liquid Processing
Air and Liquid Processing $92M 2019 NET SALES Aerofin: Produces custom engineered heat exchangers and heat transfer products used in industries such as nuclear power, industrial process and HVAC Buffalo Air Handling: Produces large custom air handling systems used in commercial, institutional and in
Slide 28: Key Customers
Key Customers Ampco-Pittsburgh Investor Presentation 28
Slide 29: Mission-Critical Functions Across Demanding End Markets
Mission-Critical Functions Across Demanding End Markets Ampco-Pittsburgh Investor Presentation 29
Slide 30: Competitive Advantages
Competitive Advantages The Industry’s Needs Air and Liquid Processing’s Solutions High quality and reliability Trusted source for research that meet strict industry and medical labs, military, and certification requirements the nuclear industry Ease of selection for custom Proprietary software for a
Slide 31: Differentiators
Differentiators #1 heat exchanger supplier to the North American Nuclear Power Generation market. Broadest range of coil sizes and materials of Equipment is installed in 93% of all construction in the industry North American plants Principle source for all major Pharmaceutical and Biotechnology Pref
Slide 32: 2-3 Year Growth Initiatives
2-3 Year Growth Initiatives Diversifying product offerings in open-die forged products and increase market share to three times current position Invest in modernization of machining to increase automated processes resulting in higher margins Increase sales and productivity in the Air and Liquid Proc
Slide 33: Other Catalysts for Growth
Other Catalysts for Growth Infrastructure bill proposals could drive higher Steel or Roll steel demand picture Significant operating leverage for market recoveries in steel and oil & gas Pending trade actions in the U.S. shale oil & gas market Post pandemic-related new growth opportunities in pharma
Slide 34: Thank You
Producing Quality Products Since 1929 — Always Moving Forward! Thank You ampcopgh.com Ampco-Pittsburgh Investor Presentation 34 March 26, 2020
Slide 35: Appendix
Appendix Ampco-Pittsburgh Investor Presentation 35
Slide 36: Non-GAAP Reconciliation
Non-GAAP Reconciliation ($000’s) 2016 2017 2018 2019 (Loss) income from continuing operations, as reported (GAAP) $ (54,530) $ (13,769) $ (44,892) $ (10,908) Impairment charges [1] 26,676 - - 10,082 Impact of ASU No. 2017-07 on 2016 [2] (945) - - - Integration-related restructuring expenses and unfa
Slide 37: Non-GAAP Reconciliation
Non-GAAP Reconciliation ($000’s) 2018 2019 2020 Q1 Q2 Q3 Q4 Total Q1 Q2 Q3 Q4 Total Q1 (Loss) income from continuing operations, as reported (GAAP) $ (1,777) $ (189) $ (2,847) $ (40,078) $ (44,892) $ (11,959) $ (653) $ (1,340) $ 3,044 $ (10,908) $ 4,351 Impairment charge [1] - - - - - 10,082 - - - 1
Slide 38: Non-GAAP Reconciliation
Non-GAAP Reconciliation ($000’s) 2016 2017 2018 2019 Net (loss) income $ (79,820) $ (12,089) $ (69,335) $ (20,986) Add: Income tax provision (benefit) 22,712 (1,355) 268 2,108 Other (income) expense, including interest expense 2,990 3,673 (1,085) (2,541) Depreciation and amortization 20,463 21,376 2
Slide 39: Non-GAAP Reconciliation Footnotes
Non-GAAP Reconciliation Footnotes [1] Impairment charge for 2016 represents principally the write-off of goodwill associated with the Forged and Cast Engineered Products reporting unit deemed to be impaired. For 2019, impairment charge was recognized in the first quarter of 2019 to record the sale o