Ampco-pittsburgh Corporation · NYSE:AP
Ampco-pittsburgh — Sidoti Inaugural Virtual Microcap Conference 2020
45 slides from Ampco-pittsburgh's conference presentation, Jun 30, 2020
Slide 1: Investor Presentation
Producing Quality Products Since 1929 — Always Moving Forward! Investor Presentation Sidoti Inaugural Virtual Microcap Conference 2020 June 30, 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”). The information offered in this presentation may include, but are not
Slide 3: 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 4: The Vision
The Vision Our Vision is Simple: #1 Market Share position for the customers we serve – Top Line Growth Deliver a Minimum Net Income of $25M – Financial Resilience - Double Digit EBITDA Margin - Ampco-Pittsburgh Investor Presentation 4
Slide 5: The Problem
The Problem 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 Presentation 5
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 growing margins, customer share, and opening new markets Consolidate manufacturing footprint through asset upgrades further reducing ove
Slide 7: 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 8: 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 9: 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 9
Slide 10: Ampco-Pittsburgh Customers
Ampco-Pittsburgh Customers Ampco-Pittsburgh Investor Presentation 10
Slide 11: 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 12: Key Rolling Mill Customers
Key Rolling Mill Customers DIVERSIFIED BASE OF GLOBALLY RECOGNIZABLE CUSTOMERS Over 75% of the world’s steel and aluminum products require rolling Ampco-Pittsburgh Investor Presentation 12
Slide 13: 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 13
Slide 14: Basic Rolling Mill Manufacturing Process
Basic Rolling Mill Manufacturing Process Ampco-Pittsburgh Investor Presentation 14
Slide 15: Hot Rolled Strip Mill Manufacturing Process
Hot Rolled Strip Mill Manufacturing Process This video is 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’ Advan
Slide 16: The Customer's Needs
The Customer’s Needs Rolls that last longer Stability in mill performance Rolls that meet stringent surface finish requirements Easy access to quick and knowledgeable technical support Ampco-Pittsburgh Investor Presentation 16
Slide 17: Union Electric Solutions
Union Electric Solutions Highly-valued sales and technical support In-house melting and heat-treatment processes representatives globally positioned to meet the enable material composition customization to immediate needs of the customer meet durability and stability requirements Ability to offer br
Slide 18: Union Electric vs. Competition
Union Electric vs. Competition Ability to offer most diverse range of roll types and chemistries in the industry Ampco-Pittsburgh Investor Presentation 18
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 Aerofin Customers
Key Aerofin Customers Ampco-Pittsburgh Investor Presentation 22
Slide 23: Leader in Advanced Heat Exchangers
Leader in the development, design, manufacturing, and service of technologically advanced, highly engineered heat exchangers Mission-Critical Functions Across Demanding End Markets Custom Heat Exchangers • Preferred supplier of heat exchangers to hospital emergency rooms and for critical HVAC applic
Slide 24: The Customer's Needs
The Customer’s Needs Quality, reliability, and design efficiency Ease of selection for custom applications Ability to customize with multiple options from one source Demand solutions-driven engineering from a trusted brand Ampco-Pittsburgh Investor Presentation 24
Slide 25: Aerofin Solutions
Aerofin Solutions #1 heat exchanger supplier to the North American Nuclear Power Generation market. Installed applications ranging from -40 °F to Equipment is installed in 93% of all 950 °F North American plants Preferred supplier of heat exchangers in the Broadest range of coil sizes and materials
Slide 26: Key Buffalo Air Handling End Customers
Key Buffalo Air Handling End Customers Ampco-Pittsburgh Investor Presentation 26
Slide 27: Leader in Advanced Air Handling Systems
Leader in the development, design, manufacturing, and service of technologically advanced, highly engineered heat exchangers Mission-Critical Functions Across Demanding End Markets Pharmaceutical & Biotechnology Research and Manufacturing • Provide critical temperature control to major biotechnology
Slide 28: The Customer's Needs
The Customer’s Needs Experienced and technically advanced supplier of air handling equipment Accurate and reliable designs at project conception Designs that meet strict industry certification requirements Continuous and reliable air quality to support and protect long-term research Ampco-Pittsburgh
Slide 29: Buffalo Air Handling Solutions
Buffalo Air Handling Solutions Customers choice for historic and critical retrofit Leader in Custom Air Handling units with over projects requiring unique equipment while 100 years of engineering, design and preserving the building design integrity at the manufacturing experience lowest cost Assured
Slide 30: Key Buffalo Pumps Customers
Key Buffalo Pumps Customers Ampco-Pittsburgh Investor Presentation 30
Slide 31: Leader in Advanced Pumps
Leader in the development, design, manufacturing, and service of technologically advanced, highly engineered pumps Mission-Critical Functions Across Demanding End Markets Navy / Marine • Pumps for combatant ship service • Built for Navy-specified 40-year design life, designed to withstand shock test
Slide 32: The Customer's Needs
The Customer’s Needs Design life requirements of 40 years as specified by the Navy Reliable operation 24 hours a day, 365 days a year Stringent pre-shipment testing protocol upheld by supplier Ampco-Pittsburgh Investor Presentation 32
Slide 33: Buffalo Pumps Solutions
Buffalo Pumps Solutions Supplier of choice in custom made solutions for Over 135 years of design and supply of custom equipment supplied to the worldwide Power pumps to customer’s exacting specifications Generation and Oil and Gas OEMs Industry leader in Navy/Marine, Power Supply pumps for demanding
Slide 34: 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 35: 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) $0.0 2016 2017 2018 2019 (Loss) income from continuing operations, as reported (GAAP) (Loss) income from continuing ope
Slide 36: Consolidated Financial Quarterly Trend
Consolidated Financial Quarterly Trend ($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 37: 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 38: 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 CapEx to increase automated processes resulting in higher margins Increase sales and productivity in the Air and Liquid Processing
Slide 39: 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 40: Thank You
Producing Quality Products Since 1929 — Always Moving Forward! Thank You ampcopgh.com Ampco-Pittsburgh Investor Presentation 40 March 26, 2020
Slide 41: Appendix
Appendix Ampco-Pittsburgh Investor Presentation 41
Slide 42: 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 43: 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 44: 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 45: 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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