UNITED STATES

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, 2021 

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)

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
Series A Warrants to purchase shares of Common Stock	AP WS	NYSE American

   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  ☒

On November 2, 2021, 19,093,782 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, 2021 and December 31, 2020	3
		Condensed Consolidated Statements of Operations – Three and Nine Months Ended September 30, 2021 and 2020	4
		Condensed Consolidated Statements of Comprehensive Income (Loss) – Three and Nine Months Ended September 30, 2021 and 2020	5
		Condensed Consolidated Statements of Shareholders’ Equity – Three and Nine Months Ended September 30, 2021 and 2020	6
		Condensed Consolidated Statements of Cash Flows – Nine Months Ended September 30, 2021 and 2020	7
		Notes to Condensed Consolidated Financial Statements	8
	Item 2 –	Management’s Discussion and Analysis of Financial Condition and Results of Operations	22
	Item 3 –	Quantitative and Qualitative Disclosures About Market Risk	29
	Item 4 –	Controls and Procedures	29
Part II –	Other Information:
	Item 1 –	Legal Proceedings	30
	Item 1A –	Risk Factors	30
	Item 6 –	Exhibits	30
Signatures			31

2

PART I – FINANCIAL INFORMATION

AMPCO-PITTSBURGH CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS

(UNAUDITED)

(in thousands, except par value)

	September 30, 2021			December 31, 2020
Assets
Current assets:
Cash and cash equivalents	$	12,251		$	16,842
Receivables, less allowance for doubtful accounts of $964 as of September 30, 2021     and $1,131 as of December 31, 2020		67,388			60,366
Inventories		82,390			73,243
Insurance receivable – asbestos		16,000			16,000
Other current assets		4,799			5,381
Total current assets		182,828			171,832
Property, plant and equipment, net		159,792			162,098
Operating lease right-of-use assets		4,020			4,344
Insurance receivable – asbestos		93,713			101,937
Deferred income tax assets		2,163			2,493
Intangible assets, net		6,437			7,217
Investments in joint ventures		2,175			2,175
Other noncurrent assets		12,746			11,112
Total assets	$	463,874		$	463,208
Liabilities and Shareholders’ Equity
Current liabilities:
Accounts payable	$	38,922		$	26,678
Accrued payrolls and employee benefits		16,356			19,304
Debt – current portion		18,849			12,436
Operating lease liabilities – current portion		634			674
Asbestos liability – current portion		22,000			22,000
Other current liabilities		22,971			24,240
Total current liabilities		119,732			105,332
Employee benefit obligations		75,068			81,832
Asbestos liability		143,867			158,196
Long-term debt		29,051			24,807
Noncurrent operating lease liabilities		3,387			3,670
Deferred income tax liabilities		1,773			1,403
Other noncurrent liabilities		2,335			2,969
Total liabilities		375,213			378,209
Commitments and contingent liabilities (Note 8)
Shareholders’ equity:
Common stock – par value $1; authorized 40,000 shares;     issued and outstanding 19,094 shares as of September 30, 2021 and     18,312 shares as of December 31, 2020		19,094			18,312
Additional paid-in capital		174,026			170,318
Retained deficit		(43,730	)		(43,371	)
Accumulated other comprehensive loss		(69,698	)		(68,695	)
Total Ampco-Pittsburgh shareholders’ equity		79,692			76,564
Noncontrolling interest		8,969			8,435
Total shareholders’ equity		88,661			84,999
Total liabilities and shareholders’ equity	$	463,874		$	463,208

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,
	2021			2020			2021			2020
Net sales	$	81,185		$	75,674		$	260,413		$	241,515
Operating costs and expenses:
Costs of products sold (excluding depreciation and amortization)		67,990			59,461			213,011			189,604
Selling and administrative		10,910			11,445			34,538			33,474
Depreciation and amortization		4,279			4,511			13,515			13,863
Loss on disposal of assets		367			79			334			131
Total operating costs and expenses		83,546			75,496			261,398			237,072
(Loss) income from operations		(2,361	)		178			(985	)		4,443
Other income:
Investment-related income		14			1,215			1,079			1,327
Interest expense		(834	)		(1,018	)		(2,672	)		(3,228	)
Other income – net		2,006			1,493			4,694			2,510
Total other income		1,186			1,690			3,101			609
(Loss) income before income taxes		(1,175	)		1,868			2,116			5,052
Income tax (provision) benefit		(291	)		(630	)		(2,044	)		1,649
Net (loss) income		(1,466	)		1,238			72			6,701
Less: Net income attributable to noncontrolling interest		123			270			431			923
Net (loss) income attributable to Ampco-Pittsburgh	$	(1,589	)	$	968		$	(359	)	$	5,778
Net (loss) income per share attributable to Ampco-Pittsburgh common shareholders:
Basic	$	(0.08	)	$	0.07		$	(0.02	)	$	0.45
Diluted	$	(0.08	)	$	0.07		$	(0.02	)	$	0.43
Weighted average number of common shares outstanding:
Basic		19,093			13,343			18,905			12,915
Diluted		19,093			14,454			18,905			13,585

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,
	2021			2020			2021			2020
Net (loss) income	$	(1,466	)	$	1,238		$	72		$	6,701
Other comprehensive (loss) income, net of income tax where applicable:
Adjustments for changes in:
Foreign currency translation		(2,499	)		4,708			(2,041	)		2,750
Unrecognized employee benefit costs (including effects of foreign currency translation)		275			(451	)		247			147
Fair value of cash flow hedges		(8	)		227			547			27
Reclassification adjustments for items included in net (loss) income:
Amortization of unrecognized employee benefit costs		457			281			1,371			1,044
Settlements of cash flow hedges		(304	)		10			(1,024	)		167
Other comprehensive (loss) income		(2,079	)		4,775			(900	)		4,135
Comprehensive (loss) income		(3,545	)		6,013			(828	)		10,836
Less: Comprehensive income attributable to noncontrolling interest		124			561			534			1,114
Comprehensive (loss) income attributable to Ampco-Pittsburgh	$	(3,669	)	$	5,452		$	(1,362	)	$	9,722

See Notes to Condensed Consolidated Financial Statements.

5

AMPCO-PITTSBURGH CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY

(UNAUDITED)

(in thousands)

Three Months Ended September 30, 2021	Common Stock		Additional Paid-in Capital			Retained Deficit			Accumulated Other Comprehensive Loss			Noncontrolling Interest		Total
Balance at July 1, 2021	$	19,076	$	173,446		$	(42,141	)	$	(67,618	)	$	8,845	$	91,608
Stock-based compensation				515											515
Comprehensive income (loss):
Net (loss) income							(1,589	)					123		(1,466	)
Other comprehensive (loss) income										(2,080	)		1		(2,079	)
Comprehensive income (loss)													124		(3,545	)
Shareholder exercise of warrants (Note 9)		16		75											91
Issuance of common stock excluding excess tax benefits of $0		2		(10	)										(8	)
Balance at September 30, 2021	$	19,094	$	174,026		$	(43,730	)	$	(69,698	)	$	8,969	$	88,661
Three Months Ended September 30, 2020
Balance at July 1, 2020	$	12,794	$	156,855		$	(46,531	)	$	(69,202	)	$	7,269	$	61,185
Stock-based compensation				436											436
Comprehensive income:
Net income							968						270		1,238
Other comprehensive income										4,484			291		4,775
Comprehensive income													561		6,013
Equity rights offering (Note 9)		5,508		12,642											18,150
Issuance of common stock excluding excess tax benefits of $0		10		(20	)										(10	)
Balance at September 30, 2020	$	18,312	$	169,913		$	(45,563	)	$	(64,718	)	$	7,830	$	85,774
Nine Months Ended September 30, 2021
Balance at January 1, 2021	$	18,312	$	170,318		$	(43,371	)	$	(68,695	)	$	8,435	$	84,999
Stock-based compensation				1,543											1,543
Comprehensive income (loss):