Ampco-pittsburgh Corporation · NYSE:AP
Ampco-pittsburgh — Sidoti Virtual Microcap Conference (November 2020)
33 slides from Ampco-pittsburgh's conference presentation, Nov 19, 2020
Slide 1: Investor Presentation
Producing Quality Products Since 1929 — Always Moving Forward! Investor Presentation Sidoti Virtual Microcap Conference November 19, 2020
Slide 2: Disclaimer
Disclaimer Forward-Looking Statements The Private Securities Litigation Reform Act of 1995 (the “Act”) provides a safe harbor for forward-looking statements made by or on behalf of Ampco-Pittsburgh Corporation (the “Corporation”). This presentation may include, but is not limited to, statements abou
Slide 3: Non-GAAP Financial Measures
Non-GAAP Financial Measures The Corporation presents certain non-GAAP financial measures, including adjusted (loss) income from continuing operations and EBITDA, as supplemental financials measure to GAAP financial measures regarding the Corporation’s operational performance and profitability. These
Slide 4: Our Mission – Near Term
Our Mission – Near Term Minimum Annual Net Income - $25 Million Target Annual Revenue - $450 Million - Target Double Digit EBITDA Margin - Ampco-Pittsburgh Investor Presentation 4
Slide 5: Legacy Challenges Being Addressed
Legacy Challenges Being Addressed Underperforming and underutilized assets Significant gaps in leadership Poor productivity impacting costs, product lead time, and predictability of performance Complex flow path and excessive overhead structure driving unnecessary costs The Problem: Limited ability
Slide 6: The Plan of Attack
The Plan of Attack Divest underperforming and non-core businesses Replace key leadership positions Maximize core assets through operational efficiency improvements Consolidate manufacturing footprint through asset upgrades The Results: Return to profitability, improving margins, increasing customer
Slide 7: Highlights of the Equity Rights Offering
Highlights of the Equity Rights Offering • Subscription Period: August 18, 2020 - September 18, 2020 • Entitled rights holders to purchase units consisting of Common Shares and Series A warrants to purchase Common Shares, expiring on August 1, 2025. • Series A warrants listed on NYSE American under
Slide 8: CAPEX Opportunity for Cost Reduction
CAPEX Opportunity for Cost Reduction Current State – 3 Forge Facilities Future State – 2 Forge Facilities 18 to 36 Month Timeline – Machine OEM Dependent Replace Single-Purpose Machines with Multi-Purpose Machines ✓ Efficiency Improvements ✓ Working Capital Reduction ✓ Labor Savings ✓ Transportation
Slide 9: Turnaround Strategy is working!
Turnaround Strategy is working! New Leadership • Brett McBrayer introduced as new CEO in July 2018 with a focus on operational improvements, reducing complexity, and rightsizing the business for future growth and profitability • Sam Lyon appointed Segment President with new plan to reduce costs, str
Slide 10: Consolidated Financial Trend Improvement
Consolidated Financial Trend Improvement ($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) $0.0 2016 2017 2018 2019 (Loss) income from continuing operations, as reported (GAAP) (Loss) income from continuing ope
Slide 11: Consolidated Financial Quarterly Trend
Consolidated Financial Quarterly Trend ($MM’s) $10.0 $120.0 (Loss) income from continuing operations & Adjusted EBITDA 8.6% 6.8% 5.7% 6.3% 5.8% 5.8% 4.1% 4.4% 1.6% Net Sales $0.0 $60.0 COVID-19 Pandemic ($10.0) $0.0 ($40.1) ($12.0) 2018 Q3 2018 Q4 2019 Q1 2019 Q2 2019 Q3 2019 Q4 2020 Q1 2020 Q2 2020
Slide 12: 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 processes for forged and cast hardene
Slide 13: 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 14: 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 15: Key Rolling Mill Customers
Key Rolling Mill Customers DIVERSIFIED BASE OF GLOBALLY RECOGNIZABLE CUSTOMERS Ampco-Pittsburgh Investor Presentation 15
Slide 16: 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 16
Slide 17: 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 and profile is achieved. • Rolls are consumables; our customers provide the “razor” (the rolling mill); we provide the “blade” (the rolls). Ampco-P
Slide 18: 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 19: 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 20: 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 20
Slide 21: 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 22: Key Customers
Key Customers Ampco-Pittsburgh Investor Presentation 22
Slide 23: Mission-Critical Functions Across Demanding End Markets
Mission-Critical Functions Across Demanding End Markets Ampco-Pittsburgh Investor Presentation 23
Slide 24: 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 25: 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 Preferred supplier for Hospital and P
Slide 26: 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 27: 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 28: Thank You
Producing Quality Products Since 1929 — Always Moving Forward! Thank You ampcopgh.com Ampco-Pittsburgh Investor Presentation 28 March 26, 2020
Slide 29: Appendix
Appendix Ampco-Pittsburgh Investor Presentation 29
Slide 30: 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 31: Non-GAAP Reconciliation
Non-GAAP Reconciliation ($000’s) 2018 2019 2020 Q1 Q2 Q3 Q4 Total Q1 Q2 Q3 Q4 Total Q1 Q2 Q3 (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 $ (86) $ 178 Impairment charge [1] - - -
Slide 32: 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 33: 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
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