0001564590-19-042325.txt : 20191108 0001564590-19-042325.hdr.sgml : 20191108 20191108170828 ACCESSION NUMBER: 0001564590-19-042325 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 93 CONFORMED PERIOD OF REPORT: 20190930 FILED AS OF DATE: 20191108 DATE AS OF CHANGE: 20191108 FILER: COMPANY DATA: COMPANY CONFORMED NAME: AMPCO PITTSBURGH CORP CENTRAL INDEX KEY: 0000006176 STANDARD INDUSTRIAL CLASSIFICATION: PUMPS & PUMPING EQUIPMENT [3561] IRS NUMBER: 251117717 STATE OF INCORPORATION: PA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-00898 FILM NUMBER: 191204888 BUSINESS ADDRESS: STREET 1: 726 BELL AVENUE STREET 2: SUITE 301 CITY: CARNEGIE STATE: PA ZIP: 15106 BUSINESS PHONE: 412-456-4400 MAIL ADDRESS: STREET 1: 726 BELL AVENUE STREET 2: SUITE 301 CITY: CARNEGIE STATE: PA ZIP: 15106 FORMER COMPANY: FORMER CONFORMED NAME: SCREW & BOLT CORP OF AMERICA DATE OF NAME CHANGE: 19710518 10-Q 1 ap-10q_20190930.htm 10-Q ap-10q_20190930.htm

 

 

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10-Q

 

QUARTERLY REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2019

OR

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from                      to                     

Commission File Number 1-898

 

AMPCO-PITTSBURGH CORPORATION

 

 

 

 

Pennsylvania

25-1117717

(State of

Incorporation)

(I.R.S. Employer

Identification No.)

726 Bell Avenue, Suite 301

Carnegie, Pennsylvania 15106

(Address of principal executive offices)

(412) 456-4400

(Registrant’s telephone number)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter periods that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes      No  

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes      No  

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

 

 

 

 

 

 

 

Large accelerated filer

Accelerated filer

Emerging growth company

 

 

 

 

 

 

Non-accelerated filer

Smaller reporting company

 

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act  

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes      No  

 

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

Common Stock, $1 par value

AP

New York Stock Exchange

On November 1, 2019, 12,642,309 common shares were outstanding.

 

 

 

 


AMPCO-PITTSBURGH CORPORATION

INDEX

 

 

 

 

 

Page No.

Part I 

 

Financial Information:

 

 

 

 

 

 

 

 

 

 

 

Item 1 

 

Financial Statements (Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

Condensed Consolidated Balance Sheets – September 30, 2019 and December 31, 2018

 

3

 

 

 

 

 

 

 

 

 

 

 

Condensed Consolidated Statements of Operations – Three and Nine Months Ended September 30, 2019 and 2018

 

4

 

 

 

 

 

 

 

 

 

 

 

Condensed Consolidated Statements of Comprehensive Income (Loss) – Three and Nine Months Ended September 30, 2019 and 2018

 

 

5

 

 

 

 

Condensed Consolidated Statements of Shareholders’ Equity – Three and Nine Months Ended September 30, 2019 and 2018

 

6

 

 

 

 

 

Condensed Consolidated Statements of Cash Flows – Nine Months Ended September 30, 2019 and 2018

 

7

 

 

 

 

 

 

 

 

 

 

 

Notes to Condensed Consolidated Financial Statements

 

8

 

 

 

 

 

 

 

 

 

Item 2 

 

Management’s Discussion and Analysis of Financial Condition and Results of Operations

 

23

 

 

 

 

 

 

 

 

 

Item 3 

 

Quantitative and Qualitative Disclosures About Market Risk

 

28

 

 

 

 

 

 

 

 

 

Item 4 

 

Controls and Procedures

 

28

 

 

 

 

 

 

 

Part II 

 

Other Information:

 

 

 

 

 

 

 

 

 

Item 1

 

Legal Proceedings

 

29

 

 

 

 

 

 

 

 

 

Item 1A 

 

Risk Factors

 

29

 

 

 

 

 

 

 

 

 

Item 6 

 

Exhibits

 

29

 

 

 

 

 

 

 

Signatures

 

30

 

 

 

 

 

 

 

 

2


PART I – FINANCIAL INFORMATION

AMPCO-PITTSBURGH CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS

(UNAUDITED)

(in thousands, except par value)

 

 

September 30,

2019

 

 

December 31,

2018

 

Assets

 

 

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

9,829

 

 

$

19,713

 

Receivables, less allowance for doubtful accounts of $2,827 in 2019 and $978 in 2018

 

 

77,081

 

 

 

69,448

 

Inventories

 

 

86,976

 

 

 

94,196

 

Insurance receivable – asbestos

 

 

17,000

 

 

 

17,000

 

Other current assets

 

 

6,687

 

 

 

7,271

 

Current assets of discontinued operations

 

 

0

 

 

 

20,238

 

Total current assets

 

 

197,573

 

 

 

227,866

 

Property, plant and equipment, net

 

 

164,579

 

 

 

185,661

 

Operating lease right-of-use assets

 

 

5,428

 

 

 

0

 

Insurance receivable – asbestos

 

 

124,032

 

 

 

135,508

 

Deferred income tax assets

 

 

3,075

 

 

 

3,188

 

Intangible assets, net

 

 

7,709

 

 

 

9,225

 

Investments in joint ventures

 

 

2,175

 

 

 

2,175

 

Other noncurrent assets

 

 

8,942

 

 

 

7,496

 

Total assets

 

$

513,513

 

 

$

571,119

 

Liabilities and Shareholders’ Equity

 

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

 

 

Accounts payable

 

$

36,445

 

 

$

38,900

 

Accrued payrolls and employee benefits

 

 

20,244

 

 

 

20,380

 

Debt – current portion

 

 

20,041

 

 

 

45,728

 

Operating lease liabilities – current portion

 

 

618

 

 

 

0

 

Asbestos liability – current portion

 

 

24,000

 

 

 

24,000

 

Other current liabilities

 

 

28,132

 

 

 

28,987

 

Current liabilities of discontinued operations

 

 

0

 

 

 

9,458

 

Total current liabilities

 

 

129,480

 

 

 

167,453

 

Employee benefit obligations

 

 

71,162

 

 

 

72,658

 

Asbestos liability

 

 

188,953

 

 

 

203,922

 

Deferred income tax liabilities

 

 

609

 

 

 

164

 

Long-term debt

 

 

55,026

 

 

 

31,881

 

Noncurrent operating lease liabilities

 

 

4,810

 

 

 

0

 

Other noncurrent liabilities

 

 

2,258

 

 

 

2,072

 

Total liabilities

 

 

452,298

 

 

 

478,150

 

Commitments and contingent liabilities (Note 9)

 

 

 

 

 

 

 

 

Shareholders’ equity:

 

 

 

 

 

 

 

 

Common stock – par value $1; authorized 40,000 shares in 2019 and 20,000 shares in

     2018; issued and outstanding 12,642 shares in 2019 and 12,495 shares in 2018

 

 

12,642

 

 

 

12,495

 

Additional paid-in capital

 

 

155,955

 

 

 

154,889

 

Retained deficit

 

 

(54,416

)

 

 

(30,355

)

Accumulated other comprehensive loss

 

 

(59,127

)

 

 

(49,434

)

Total Ampco-Pittsburgh shareholders’ equity

 

 

55,054

 

 

 

87,595

 

Noncontrolling interest

 

 

6,161

 

 

 

5,374

 

Total shareholders’ equity

 

 

61,215

 

 

 

92,969

 

Total liabilities and shareholders’ equity

 

$

513,513

 

 

$

571,119

 

See Notes to Condensed Consolidated Financial Statements.

 

3


AMPCO-PITTSBURGH CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(UNAUDITED)

(in thousands, except per share amounts)

 

 

 

Three Months Ended September 30,

 

 

Nine Months Ended September 30,

 

 

 

2019

 

 

2018

 

 

2019

 

 

2018

 

Net sales

 

$

90,872

 

 

$

98,824

 

 

$

300,885

 

 

$

323,610

 

Operating costs and expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Costs of products sold (excluding depreciation and amortization)

 

 

75,475

 

 

 

82,007

 

 

 

250,232

 

 

 

268,500

 

Selling and administrative

 

 

12,365

 

 

 

13,999

 

 

 

40,179

 

 

 

43,128

 

Depreciation and amortization

 

 

4,502

 

 

 

5,361

 

 

 

14,411

 

 

 

16,409

 

Impairment charge

 

 

0

 

 

 

0

 

 

 

10,082

 

 

 

0

 

(Gain) loss on disposal of assets

 

 

(130

)

 

 

304

 

 

 

(67

)

 

 

386

 

Total operating expenses

 

 

92,212

 

 

 

101,671

 

 

 

314,837

 

 

 

328,423

 

Loss from continuing operations

 

 

(1,340

)

 

 

(2,847

)

 

 

(13,952

)

 

 

(4,813

)

Other income (expense):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Investment-related income

 

 

19

 

 

 

433

 

 

 

1,419

 

 

 

500

 

Interest expense

 

 

(1,541

)

 

 

(1,054

)

 

 

(4,035

)

 

 

(2,947

)

Other – net

 

 

2,068

 

 

 

1,255

 

 

 

4,289

 

 

 

5,597

 

 

 

 

546

 

 

 

634

 

 

 

1,673

 

 

 

3,150

 

Loss from continuing operations before income taxes

 

 

(794

)

 

 

(2,213

)

 

 

(12,279

)

 

 

(1,663

)

Income tax provision

 

 

(429

)

 

 

(800

)

 

 

(1,716

)

 

 

(883

)

Net loss from continuing operations

 

 

(1,223

)

 

 

(3,013

)

 

 

(13,995

)

 

 

(2,546

)

Loss from discontinued operations, net of tax

 

 

(3,398

)

 

 

(3,443

)

 

 

(9,031

)

 

 

(5,221

)

Net loss

 

 

(4,621

)

 

 

(6,456

)

 

 

(23,026

)

 

 

(7,767

)

Less: Net income attributable to noncontrolling interest

 

 

434

 

 

 

583

 

 

 

1,035

 

 

 

1,325

 

Net loss attributable to Ampco-Pittsburgh

 

$

(5,055

)

 

$

(7,039

)

 

$

(24,061

)

 

$

(9,092

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss from continuing operations per common share:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

(0.10

)

 

$

(0.24

)

 

$

(1.11

)

 

$

(0.20

)

Diluted

 

$

(0.10

)

 

$

(0.24

)

 

$

(1.11

)

 

$

(0.20

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loss from discontinued operations, net of tax, per common share:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

(0.27

)

 

$

(0.28

)

 

$

(0.72

)

 

$

(0.42

)

Diluted

 

$

(0.27

)

 

$

(0.28

)

 

$

(0.72

)

 

$

(0.42

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss per common share attributable to Ampco-Pittsburgh:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

(0.40

)

 

$

(0.56

)

 

$

(1.91

)

 

$

(0.73

)

Diluted

 

$

(0.40

)

 

$

(0.56

)

 

$

(1.91

)

 

$

(0.73

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average number of common shares outstanding:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

12,640

 

 

 

12,494

 

 

 

12,572

 

 

 

12,432

 

Diluted

 

 

12,640

 

 

 

12,494

 

 

 

12,572

 

 

 

12,432

 

 

See Notes to Condensed Consolidated Financial Statements.

 

4


AMPCO-PITTSBURGH CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(UNAUDITED)

(in thousands)

 

 

 

Three Months Ended September 30,

 

 

Nine Months Ended September 30,

 

 

 

2019

 

 

2018

 

 

2019

 

 

2018

 

Net loss

 

$

(4,621

)

 

$

(6,456

)

 

$

(23,026

)

 

$

(7,767

)

Other comprehensive loss, net of income tax where applicable:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjustments for changes in:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Foreign currency translation

 

 

(3,769

)

 

 

(1,102

)

 

 

(4,893

)

 

 

(4,801

)

Unrecognized employee benefit costs (including effects of foreign currency translation)

 

 

(9,551

)

 

 

138

 

 

 

(4,850

)

 

 

417

 

Fair value of cash flow hedges

 

 

(134

)

 

 

(198

)

 

 

(87

)

 

 

(519

)

Reclassification adjustments for items included in net loss:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Amortization of unrecognized employee benefit costs

 

 

156

 

 

 

(42

)

 

 

(287

)

 

 

152

 

Realized losses (gains) from settlement of cash flow hedges

 

 

53

 

 

 

46

 

 

 

176

 

 

 

(255

)

Other comprehensive loss

 

 

(13,245

)

 

 

(1,158

)

 

 

(9,941

)

 

 

(5,006

)

Comprehensive loss

 

 

(17,866

)

 

 

(7,614

)

 

 

(32,967

)

 

 

(12,773

)

Less: Comprehensive income attributable to noncontrolling interest

 

 

188

 

 

 

440

 

 

 

787

 

 

 

1,148

 

Comprehensive loss attributable to Ampco-Pittsburgh

 

$

(18,054

)

 

$

(8,054

)

 

$

(33,754

)

 

$

(13,921

)

 

See Notes to Condensed Consolidated Financial Statements.


5


AMPCO-PITTSBURGH CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY

(UNAUDITED)

(in thousands)

 

 

 

Common

Stock

 

 

Additional

Paid-in

Capital

 

 

Retained

Earnings (Deficit)

 

 

Accumulated

Other

Comprehensive

Loss

 

 

Noncontrolling

Interest

 

 

Total

 

For the three months ended September 30, 2019

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance July 1, 2019

 

$

12,624

 

 

$

155,644

 

 

$

(49,361

)

 

$

(46,128

)

 

$

5,973

 

 

$

78,752

 

Stock-based compensation

 

 

 

 

 

 

299

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

299

 

Comprehensive income (loss):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net (loss) income

 

 

 

 

 

 

 

 

 

 

(5,055

)

 

 

 

 

 

 

434

 

 

 

(4,621

)

Other comprehensive loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(12,999

)

 

 

(246

)

 

 

(13,245

)

Comprehensive income (loss)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

188

 

 

 

(17,866

)

Issuance of common stock excluding excess tax benefits of $0

 

 

18

 

 

 

12

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

30

 

Balance September 30, 2019

 

$

12,642

 

 

$

155,955

 

 

$

(54,416

)

 

$

(59,127

)

 

$

6,161

 

 

$

61,215

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

For the three months ended September 30, 2018

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance July 1, 2018

 

$

12,491

 

 

$

154,185

 

 

$

36,926

 

 

$

(49,203

)

 

$

3,528

 

 

$

157,927

 

Stock-based compensation

 

 

 

 

 

 

462

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

462

 

Comprehensive income (loss):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net (loss) income

 

 

 

 

 

 

 

 

 

 

(7,039

)

 

 

 

 

 

 

583

 

 

 

(6,456

)

Other comprehensive loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1,015

)

 

 

(143

)

 

 

(1,158

)

Comprehensive income (loss)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

440

 

 

 

(7,614

)

Issuance of common stock excluding excess tax benefits of $0

 

 

4

 

 

 

3

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

7

 

Other

 

 

 

 

 

 

 

 

 

 

1

 

 

 

 

 

 

 

 

 

 

 

1

 

Balance September 30, 2018

 

$

12,495

 

 

$

154,650

 

 

$

29,888

 

 

$

(50,218

)

 

$

3,968

 

 

$

150,783

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

For the nine months ended September 30, 2019

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance January 1, 2019

 

$

12,495

 

 

$

154,889

 

 

$

(30,355

)

 

$

(49,434

)

 

$

5,374

 

 

$

92,969

 

Stock-based compensation

 

 

 

 

 

 

959

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

959

 

Comprehensive income (loss):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net (loss) income

 

 

 

 

 

 

 

 

 

 

(24,061

)

 

 

 

 

 

 

1,035

 

 

 

(23,026

)

Other comprehensive loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(9,693

)

 

 

(248

)

 

 

(9,941

)

Comprehensive income (loss)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

787

 

 

 

(32,967

)

Issuance of common stock excluding excess tax benefits of $0

 

 

147

 

 

 

107

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

254

 

Balance September 30, 2019

 

$

12,642

 

 

$

155,955

 

 

$

(54,416

)

 

$

(59,127

)

 

$

6,161

 

 

$

61,215

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

For the nine months ended September 30, 2018

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance January 1, 2018

 

$

12,361

 

 

$

152,992

 

 

$

38,980

 

 

$

(45,392

)

 

$

2,820

 

 

$

161,761

 

Stock-based compensation

 

 

 

 

 

 

1,301

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1,301

 

Comprehensive income (loss):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net (loss) income

 

 

 

 

 

 

 

 

 

 

(9,092

)

 

 

 

 

 

 

1,325

 

 

 

(7,767

)

Other comprehensive loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(4,829

)

 

 

(177

)

 

 

(5,006

)

Comprehensive income (loss)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1,148

 

 

 

(12,773

)

Issuance of common stock excluding excess tax benefits of $0

 

 

134

 

 

 

357

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

491

 

Other

 

 

 

 

 

 

 

 

 

 

 

 

 

 

3

 

 

 

 

 

 

 

3

 

Balance September 30, 2018

 

$

12,495

 

 

$

154,650

 

 

$

29,888

 

 

$

(50,218

)

 

$

3,968

 

 

$

150,783

 

 

See Notes to Condensed Consolidated Financial Statements.

6


S

 

AMPCO-PITTSBURGH CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)

(in thousands)

 

 

 

Nine Months Ended September 30,

 

 

 

2019

 

 

2018

 

Net cash flows (used in) provided by operating activities - continuing operations

 

$

(8,194

)

 

$

1,555

 

 

 

 

 

 

 

 

 

 

Cash flows from investing activities:

 

 

 

 

 

 

 

 

Purchases of property, plant and equipment

 

 

(7,156

)

 

 

(7,215

)

Proceeds from sale of ASW (Note 2)

 

 

4,292

 

 

 

0

 

Proceeds from sale of the Avonmore Plant (Note 2)

 

 

3,700

 

 

 

0

 

Purchases of long-term marketable securities

 

 

(51

)

 

 

(102

)

Proceeds from sale of long-term marketable securities

 

 

241

 

 

 

247

 

Net cash flows provided by (used in) investing activities - continuing operations

 

 

1,026

 

 

 

(7,070

)

 

 

 

 

 

 

 

 

 

Cash flows from financing activities: