Ampco-Pittsburgh Corporation Stock

Welcome to the Ampco-Pittsburgh Corporation Second Quarter 2026 Earnings Results Conference Call. [Operator Instructions] Please note this event is being recorded.

I'd now like to turn the conference over to Kim Knox, Corporate Secretary. Please go ahead.

Thank you, Megan, and good morning to everyone joining us on today's second quarter 2026 conference call. Joining me today are Brett McBrayer, our Chief Executive Officer; and David Anderson, Vice President, Chief Financial Officer and President of Air & Liquid Systems Corporation. Also joining us on the call today is Sam Lyon, President of Union Electric Steel Corporation.

Before we begin, I would like to remind everyone that participants on this call may make statements or comments that are forward-looking and may include financial projections or other statements of the corporation's plans, objectives, expectations or intentions. These matters involve certain risks and uncertainties, many of which are outside the corporation's control. The corporation's actual results may differ significantly from those projected or suggested in any forward-looking statements due to various risk factors, including those discussed in the corporation's most recently filed Form 10-K and in subsequent filings with the Securities and Exchange Commission.

We do not undertake any obligation to update or otherwise release publicly any revision to our forward-looking statements. A replay of this call will be posted on our website later today. To access the earnings release or the webcast replay, please consult the Investors section of our website at ampcopgh.com.

With that, I'd like to turn the call over to Brett McBrayer, Ampco-Pittsburgh's CEO. Brett?

Thank you, Kim. Good morning, and thank you for joining us. The second quarter marked a clear turning point for Ampco-Pittsburgh. Net income was $1.5 million, or $0.07 per share compared to a net loss of $7.3 million or a loss of $0.36 per share in the prior year period. Adjusted EBITDA of $9.8 million improved 22% versus prior year, with margin expanding 240 basis points to 9.5% on net sales of $102.9 million.

This is important. Demand across both segments is accelerating. Customer orders of approximately $144 million were up 50% versus prior year, and backlog grew $39.9 million from the first quarter to $385.4 million. Air & Liquid delivered record results and the actions we took in Forged and Cast Engineered Products, including the closure of our U.K. facility, are now flowing through to the bottom line.

I'll now turn the call over to David Anderson, our Chief Financial Officer and President of Air & Liquid Systems to discuss the Air & Liquid segment.

Thank you, Brett. Good morning. 2026 continues to be a positive year for Air & Liquid. Q2 revenue was comparable with prior year, while year-to-date revenue increased 9% versus prior year. Adjusted EBITDA in Q2 increased 34% versus prior year as improved manufacturing efficiencies led to significant margin improvement. Year-to-date adjusted EBITDA increased 43% versus prior year as increased revenue, improved manufacturing efficiencies and positive product mix drove adjusted EBITDA to the highest level in Air & Liquid's history.

Backlog increased $23.3 million or 16% in the quarter as customer demand continued to drive order activity to record levels. Backlog is 39% higher than year-end 2025. Data centers are causing increasing demand in the power generation market, which is fueling demand in both our commercial pump and nuclear heat exchanger products. Our commercial pumps are used in gas turbines, which are seeing strong growth, while we continue to be the dominant supplier of heat exchangers into the growing nuclear market.

There continues to be strong demand from the U.S. Navy, and we expect this demand to continue as the Navy moves forward with fleet expansion plans. The manufacturing equipment installed in 2024 has already increased manufacturing capacity for our pump product line, and there is more capacity expansion in process. Additional manufacturing equipment from the Navy funding program arrived at our facility in early 2026 and is expected to begin producing products in the second half of 2026.

More equipment from the Navy funding program just arrived at the end of July. All of this equipment will position us to meet the long-term growth in this market. Demand for custom air handlers remains strong as there continues to be significant demand in the pharmaceutical and health care markets for our custom air handling products.

With rising market demand and an increasing backlog, we continue to focus on increasing our manufacturing capacity. We are bringing in new equipment, increasing our headcount and improving our manufacturing efficiencies in order to meet the increasing demand. In summary, it was a great first half of 2026, and we are well positioned in markets that are showing significant long-term growth.

Thank you, David. Sam Lyon, President of Forged and Cast Engineered Products segment, will now share more details regarding his group's performance.

Thank you, Brett, and good morning, everyone. For the second quarter of 2026, the Forged and Cast Engineered Products segment reported net sales of $67.3 million compared to $77.9 million in Q2 of 2025. Nearly all of that decline came from the exit from both our U.K. facility and our AUP Distribution business.

Segment adjusted EBITDA of $7.8 million increased 15% compared to prior year and 36% sequentially. The timing items that affected Q1 reversed as expected. Large roll shipments in the U.S. recovered, higher cost inventory from late 2025 flowed through the P&L, and Sweden returned to profitability due to improved productivity and utilization.

Demand has improved, particularly in North America. Tariff protections have reduced imports and lifted U.S. steel mill utilization, thereby increasing the number of rolls consumed. FEP orders and margins have also improved. Our backlog grew from year-end on orders for the second half of 2026 and 2027, and the market consolidation we discussed last quarter is presenting us with opportunities for additional business.

Looking ahead, the third quarter will reflect our normal annual maintenance outage in the U.S. and the summer shutdowns in Europe. Despite these normal seasonal outages, we expect the second half of the year to be significantly stronger than the first half and continue to be optimistic about 2027. Brett, back to you.

Thank you, Sam. I will now turn the call back over to David Anderson, our Chief Financial Officer, for more details regarding our financial performance for the quarter.

Thank you, Brett. As indicated in both our Form 10-Q and in our press release 8-K filed this morning, Ampco-Pittsburgh reported Q2 net sales of $102.9 million compared to $113.1 million in the prior year, primarily reflecting the closure of the U.K. cast roll facility in the second half of 2025.

Year-to-date revenue was $211.2 million compared to $217.4 million as the closure of the U.K. facility was partially offset by higher sales in the ALP segment. Q2 adjusted EBITDA of $9.8 million increased 22% compared to prior year and 22% sequentially compared to Q1 of 2026. Q2 backlog increased 12% as order activity was strong in both segments. Total selling and administrative expenses were relatively flat compared to prior year for both Q2 and year-to-date.

Depreciation and amortization expense was lower than prior year by approximately $0.5 million in Q2 and $0.9 million year-to-date, primarily due to the closure of the U.K. facility in 2025. Other income and expense improved in Q2 and year-to-date, primarily due to lower loss on foreign exchange, which was partially offset by lower pension income, which was principally attributable to the U.S. defined benefit plan reaching a fully funded status in early 2026, resulting in a change in its investment strategies to a more conservative portfolio.

At June 30, 2026, the corporation's liquidity position included cash on hand of $7 million and undrawn availability on our revolving credit facility of $29 million. In summary, Q2 was significantly stronger than prior year, and sequentially, Q2 showed strong improvement versus Q1 of this year as the impact from the U.K. facility closure begins to positively impact results.

Operator, at this time, we would now like to open the line for questions.

[Operator Instructions] There are no questions at this time. I would like to turn the conference back over to Brett McBrayer for any closing remarks.

Thank you, Megan. In closing, I want to thank our employees whose efforts drove this quarter's results. The second quarter shows what this company looks like with our restructuring behind us and demand building in every market we serve from power generation in the U.S. Navy to a strengthening North American roll market. While the third quarter reflects our normal summer maintenance outages, we expect a significantly stronger second half of 2026.

Thank you to our Board of Directors and our shareholders for your continued support, and thank you for joining us this morning.

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.

Good day, and welcome to the Ampco-Pittsburgh First Quarter 2026 Earnings Results Conference Call. [Operator Instructions] Please note this event is being recorded. I would now like to turn the conference call over to Ms. Kim Knox. Ms. Knox, the floor is yours, ma'am.

Thank you, Mike, and good morning to everyone joining us on today's first quarter 2026 conference call. Joining me today are Brett McBrayer, our Chief Executive Officer; and David Anderson, Vice President, Chief Financial Officer and President of Air and Liquid Systems Corporation. Also joining us on the call today is Sam Lyon, President of Union Electric Steel Corporation.

Before we begin, I would like to remind everyone that participants on this call may make statements or comments that are forward-looking and may include financial projections or other statements of the corporation's plans, objectives, expectations or intentions. These matters involve certain risks and uncertainties, many of which are outside the corporation's control. The corporation's actual results may differ significantly from those projected or suggested in any forward-looking statements due to various risk factors, including those discussed in the corporation's most recently filed Form 10-K and in subsequent filings with the Securities and Exchange Commission. We do not undertake any obligation to update or otherwise release publicly any revision to our forward-looking statements. A replay of this call will be posted on our website later today. To access the earnings release or the webcast replay, please consult the Investors section of our website at ampcopgh.com.

With that, I'd like to turn the call over to Brett McBrayer, Ampco-Pittsburgh's CEO. Brett?

Thank you, Kim. Good morning, and thank you for joining our call. As reported in our press release, consolidated adjusted EBITDA for the first quarter was $8 million, down from $8.8 million the prior year. Our results reflect ramp-up costs in Sweden as well as a weaker mix in our Forged and Cast Engineered Products segment. We see ongoing progress in this segment following the 2025 slowdown with trends stabilizing as the business moves through a normalization in volumes and mix. With strong demand continuing in our Air and Liquid Processing segment, ALP achieved record adjusted EBITDA and record customer orders for the first quarter of 2026.

To elaborate further on this performance, I will now turn the call over to David Anderson, Chief Financial Officer and President of our Air and Liquid segment.

Thank you, Brett. Good morning. Tremendous start to the year for Air & Liquid as ALP set new records in customer orders and adjusted EBITDA. Q1 revenue increased 17%, driven by higher revenue in all product lines. Adjusted EBITDA in Q1 increased 52% versus prior year as higher revenue, improved manufacturing efficiencies and positive product mix drove adjusted EBITDA to the highest level in Air & Liquids history.

Backlog increased $23.5 million or 19% in the quarter as customer orders increased to record levels. Customer orders were 40% higher than any prior quarter as we continue to see extremely strong demand for our custom engineered products across multiple markets. Data centers are causing increasing demand in the power generation market, which is fueling demand in both our commercial pump and nuclear heat exchanger products.

Our commercial pumps are used in gas turbines, which are seeing strong growth, while we continue to be the dominant supplier of heat exchangers into the growing nuclear market. There continues to be strong demand from the U.S. Navy, and we expect this demand to continue as the Navy moves forward with fleet expansion plans. The manufacturing equipment installed in 2024 has already increased manufacturing capacity for our pump product line, and there is more capacity expansion in process.

Additional manufacturing equipment from the Navy funding program arrived at our facility in early 2026 and is expected to begin producing products in the second quarter of 2026. There is additional equipment from the Navy funding program that is expected to arrive at our facility in the second half of this year. This equipment will position us to meet the long-term growth in this market. Demand for custom air handlers remains strong as there continues to be significant demand in the pharmaceutical market for our custom air handling products.

With rising market demand and an increasing backlog, we continue to focus on increasing our manufacturing capacity. We are bringing in new equipment, increasing our headcount and improving our manufacturing efficiencies in order to meet the increasing demand. In summary, 2026 is off to a great start, and we are well positioned in markets that are showing significant long-term growth.

Thank you, David. Sam Lyon, President of Forged and Cast Engineered Products segment, will now share more details regarding his group's performance. Sam?

Thank you, Brett, and good morning, everyone. For the first quarter of 2026, the Forged and Cast Engineered Products segment reported net sales of $70.8 million compared to $72.3 million in Q1 of 2025. Sales were relatively flat with Sweden and Slovenia mostly offsetting the loss from the closure of the U.K. and our distribution business, AUP. Segment adjusted EBITDA was $5.7 million, up from $2.3 million in Q4 and down from $8.3 million in the prior year period. Three discrete timing items shape Q1 results.

First, to gain a competitive advantage with some European customers, we offer a blend of rolls from our Swedish plant and our joint venture in China. Due to uneven shipments in Q1, we had a less profitable mix, which will reverse in the coming quarters. Second, our lower shipments of higher-margin large rolls in the U.S. negatively affected the mix. Tariff uncertainty led many of our customers to defer orders for our highest margin product in Q4 of 2025 and Q1 of 2026.

And third, higher cost inventory from Q4 of 2025 flowed through the P&L. This higher cost was driven by production downtime in Q4 due to a softer order book resulting from tariff uncertainty. The forward-looking picture is much more constructive. The U.S. order book for large rolls has recovered in Q2. The work roll order book is also higher in Q2 and Q3. FEP demand and margins are improved, supported by the tariff landscape. As a result of these factors, we expect the remainder of the year to be stronger. With the increased demand, the only planned outages are the yearly maintenance in the U.S. around the 4th of July and the typical summer holidays in Europe.

In our last earnings call, I mentioned that 2 of our competitors were exiting the market. Marichal Ketin MKB, a cast roll manufacturer in Europe is in receivership and a competitor in South America has exited the cast roll market at the end of 2025 and is currently exiting the forged roll market. This market consolidation is presenting us with opportunities to gain market share.

In summary, the underlying demand for our products is improving, supported by the tariff landscape, infrastructure growth, consolidation of roll manufacturers and reshoring. We are also realizing improvements in our Sweden operation due to higher utilization. We are optimistic for the remainder of 2026 and 2027. Brett, back to you.

Thanks, Sam. I'll now turn the call back over to David Anderson, our Chief Financial Officer, for more detail regarding our financial performance for the quarter. Dave?

Thank you, Brett. As indicated in both our Form 10-Q and in our press release, Ampco-Pittsburgh reported Q1 net sales of $108.3 million, which was an increase of 3.9% versus prior year. As discussed in the segment reports, Air and Liquids saw a significant sales increase versus prior year, while FCEP was relatively flat.

Q1 adjusted EBITDA of $8 million was $0.8 million lower than prior year. The lower adjusted EBITDA was primarily driven by the temporary timing issues that Sam discussed. These issues were largely offset by the increase in adjusted EBITDA for the ALP segment. Backlog increased 5%, primarily driven by the record order activity in the ALP segment. Total selling and administrative expenses were relatively flat compared to prior year as higher sales commissions and other costs were offset by the elimination of SG&A expenses due to the closures of the U.K. facility and the small steel distribution business in the U.S.

Depreciation and amortization expense was lower by approximately $400,000 due to the closure of the U.K. facility and the steel distribution business. The change in other income and expense was primarily due to lower net pension and other post-retirement income, which is principally attributable to the U.S. defined benefit plan reaching a fully funded status in early 2026, resulting in a change in its investment strategies to a more conservative portfolio.

At March 31, 2026, the corporation's liquidity position included cash on hand of $9.2 million and undrawn availability on our revolving credit facility of $30.8 million. In summary, while there were some short-term timing issues in Q1, there were a number of positives that position us for the rest of the year, including our liquidity position, the fully funded defined benefit plan and the positive impact from the U.K. plant closure in late 2025. Operator, at this time, we would now like to open the line for questions.

[Operator Instructions] And the first question we have will come from Bruce Galloway of Galloway.

It looks like it was a pretty good quarter, a few hiccups over there. A couple of questions. Number one, back in March, you stated that the order book was up 38% and air and liquid was up 73%. And at the end of the quarter, the numbers were a little muted from there. So maybe you could explain that. And my second question is you had a lot of adjustments and a lot of restructuring costs that occurred in the fourth quarter and carried on into the first quarter. What's the total amount of all that as far as EBITDA goes?

Bruce, it's Dave. I can address your first question on the orders. And it's a little bit of comparing 2 different things. Order book is certainly up for the quarter. And in what we just presented, we were comparing sequentially to the fourth quarter. The press releases we had earlier in the year were comparing to prior year at the same time. So a little apples and oranges there, but all positive, all going in a good direction. And your question on adjusted EBITDA, Bruce?

Yes, yes. You said you had a lot of adjustments, ramping up Sweden, moving stuff to the -- out of U.K., the pension defined plan. How much of the extraordinary expenses were there that -- and what does that translate to nonrecurring as far as EBITDA goes?

I think the biggest part is forged and cast where you can see the results at the Q1 versus prior year. And our expectation is we will be going up over those numbers. So that was really in the FCEP section. So I think that difference is the timing issues that we were talking about. That's the primary difference. And that's what we see reversing out as we go into the next quarters.

But how much was that? Could you quantify? Was it $3 million in EBITDA, $2 million?

Closer to $3 million.

Okay. Closer to $3 million. So kind of like on a normalized basis, you pretty much made like $8 million for the quarter.

Correct.

Yes. And I guess for -- well, we made $8 million. So for FCEP, it would have been closer to...

$11 -- it would have been closer to $11 million...

Correct. And just a comment, Bruce, this is Sam. That timing issue between the blended shipments that we sell to European customers, that is purely timing. It will just reverse out in the next several quarters. And the overhead that we carried into the year, that's all pretty well gone as well. And then as I said, the outlook, particularly in North America is quite constructive from our customers. If you look at any of their earnings calls, their volumes are all going up and we're seeing that as well. So it's -- we feel like, as Brett said, we've kind of come through the trough at this point.

Okay. Also, are you getting any tariff money back?

Well, if we do, it will go right back to our customers. Everything -- every tariff that we had to pay, we had a line item that went to them. So -- but yes, we should. And that's a positive, too, because the new -- the way that the tariffs are going forward, we'll probably pay about half as much as we would have paid, which is just better for borrowing and our ABL.

Okay. How much business were you doing in the U.K.? And how much of that total amount switched over to Sweden?

We were doing at the end of last year, probably $30 million or so annualized in 2025 and half of that or so would go to Sweden, half to 2/3.

Okay. So on the revenue bar, you're not really comparing apples-to-apples. You have basically a discontinued operation in there, which cost you about $15 million in revenues, but obviously is helping you on the EBITDA line. Are you still on track to pick up about $9 million in savings from the closure of the U.K. facility?

We've always said $7 million to $8 million, but yes, we're still on.

The next question we have will come from John Bair of Ascend Wealth Advisors.

A couple of questions here. Number one, now that you seem to have hit an inflection point. What are your thoughts on debt reduction overall? That's question one. And then I've got a couple of additionals, that I'd like to ask.

John, it's Dave. I can answer that one on debt reduction. I mean that is one of our primary focuses as we move towards generating positive cash flow this year. We do expect debt reduction to occur as we go through this year. That's certainly one of our focuses is improving the balance sheet on that regard.

How much -- can you quantify or do you have a ballpark range of what you think you might be able to accomplish on that based on your order trends overall?

I would think reasonable is $8 million to $10 million or something in the balance of this year.

Okay. And is there any potential for any kind of refinancing that might lower your overall interest costs? Or you pretty well settled in with that?

We're pretty well settled, but we always evaluate if there's a better option somewhere. But I don't really expect that right now.

And then outside of the Air and Liquid products Navy activity and so forth, what are you seeing domestically with other aspects of the business? I know you did mention there was kind of a flattish situation with Forged because of tariffs and some of the other uncertainties. But -- and you have indicated that you'd see more positive in the back half of '26.

I guess -- this is Sam. The large roll orders that were suppressed in Q4 and Q1, I mean, they were down probably on average, 35% from normal. And they've -- in the next 2 quarters, it's completely recovered. So that was kind of the biggest issue. And those are a little bit more capital purchase items from the customers. They have a little leeway when they buy and when they don't buy them. And so they held off on those.

And again, we're also seeing very strong demand on -- particularly in Q3 on the Forged side for work rolls. And we're also currently in the midst of -- part of the backlog issue, too, is we're currently finalizing our next year's orders with our 2 biggest customers as we speak. So one of them will be done in Q2 and probably one to be done in early Q3. So that this period in time is a low point. If you look every year, it's kind of the low point for our backlog for FCEP as we negotiate 2027.

And is that basically just kind of wait the wait and see with all the uncertainties that are out there economically, perhaps that and inventory has kind of been depleted so that you are entering a more robust, hopefully, a more robust ordering cycle and usage. In other words, is the steel companies activities picking up. Is that your sense that they're picking up enough that they feel more comfortable in ordering, say, larger needs?

Well, just it's purely the -- when demand goes down, there's a lag. So they're buying supplies, which rolls as a supply for a certain level of demand. So as demand goes down, they have an inventory overhang. Well, now the opposite is occurring. So demand is going up. So they directly have to purchase more rules. And the other thing, we did not have some business in 2026 because of the tariffs in Europe. People were nervous about buying stuff from the United States. That's all gone, and we have those orders back in the '27 order book as well. So I think for the most part, everybody is -- the tariffs are all normalized. Everybody is acceptable. Everybody understands what they are now, and we're kind of back to a more normalized state.

And do you think there's some reshoring activity that's helping boost demand?

Well, in the U.S., definitely. That's demand is much better on the infrastructure, data centers. Dave mentioned the pharmaceutical sites that are being built. All that is use of steel.

Okay. Very good. Last question, you mentioned in the prepared remarks there about 2 competitors exiting the market. Is that due to a softening of demand overall for them? Or they just not have the volumes that could justify remaining in that market? And how easy or maybe that's not the right word. How likely is it that you'll be able to pick up the market share that is being left behind by their exiting the market?

Well, in Europe, the European competitor, Europe market was oversupplied, which is the main reason why we got out of the U.K. as well. So that's a real positive for us there. And then in the South America, which they didn't announce it publicly, so I can't say who it is, but it's a noncore business for them, and they just decided it wasn't worth managing. On the South American competitor, that we will definitely -- we're being called directly by customers, and we have orders that we haven't had in years because of them going out of exiting the business. And in Europe, we'll compete and get our share from that as well. So that's all very positive.

[Operator Instructions] The next question we have will come from Justin Bergner of Gabelli Funds.

The question about the exits of the competitors was just answered, but I had one more question. Any benefit from the revised Section 232 tariffs that's material for your business?

Yes. There's a couple of things, Justin. One is that cast rules, so the rules from Sweden, those have been pretty dramatically reduced. So it -- while the tariffs didn't affect us greatly, it puts us on more level playing field with the U.S. competitor that we have, and we won't have to pay the tariff and foot the bill. So that's a positive. And then the tariffs on the FEP products stayed in place. That's still at 50%, which is a healthy barrier. So that's helping our FEP order book. It's probably double what it was last year, and the margins are much better as well. So I think if you look at the total picture, it's kind of landed in a good spot for us, better than it was 4 months ago.

[Operator Instructions] It appears that we have no further questions at this time. This concludes our question-and-answer session. I would now like to turn the conference back over to Mr. Brett McBrayer for any closing remarks. Sir?

Thank you. In closing, today, I want to thank our employees who continue to make a positive impact each and every day. With improving market conditions and the actions taken in the second half of 2025 in our Forged and Cast segment, we expect to recognize again an annual adjusted EBITDA improvement of $7 million to $8 million moving forward. I want to thank our Board of Directors and our shareholders for your continued support. Thank you for joining our call this morning.

Thank you, sir, and to the rest of the management team. This concludes today's conference call. At this time, you may disconnect your lines. Thank you. Take care, and have a blessed day, everyone.

Welcome to the Ampco-Pittsburgh Corporation Fourth Quarter 2025 Earnings Results Conference Call.

[Operator Instructions] Please note, this event is being recorded. I'd now like to turn the conference over to Kim Knox, Corporate Secretary. Please go ahead, ma'am.

Thank you, Nick, and good morning to everyone joining us on today's Fourth Quarter 2025 Conference Call. Joining me today are Brett McBrayer, our Chief Executive Officer; and Dave Anderson, Vice President, Chief Financial Officer and President of Air and Liquid Systems Corporation. Also joining us on the call today is Sam Lyon, President of Union Electric Steel Corporation.

Before we begin, I would like to remind everyone that participants on this call may make statements or comments that are forward-looking and may include financial projections or other statements of the corporation's plans, objectives, expectations or intentions. These matters involve certain risks and uncertainties, many of which are outside the corporation's control. The corporation's actual results may differ significantly from those projected or suggested in any forward-looking statements due to various risk factors, including those discussed in the corporation's most recently filed Form 10-K and in subsequent filings with the Securities and Exchange Commission. We do not undertake any obligation to update or otherwise release publicly any revision to our forward-looking statements.

A replay of this call will be posted on our website later today. To access the earnings release or the webcast replay, please consult the Investors section of our website at ampcopgh.com.

With that, I'd like to turn the call over to Brett McBrayer, Ampco-Pittsburgh's CEO. Brett?

Thank you, Kim. Good morning, and thank you for joining our call. The fourth quarter was a busy quarter for Ampco-Pittsburgh, where we initiated and completed the removal of significant underperforming assets from our portfolio. As we emerge from the slowdown in the steel market, we expect these actions to improve adjusted EBITDA by $7 million to $8 million annually.

As reported in our press release, consolidated adjusted EBITDA for the fourth quarter was $3.2 million, down from $6 million the prior year. This anticipated dip in performance was driven by the pause in customer orders in our Forged and Cast segment after the announcement of new global tariffs.

Consolidated adjusted EBITDA for the full year was $29.2 million. This performance is an improvement from the prior year despite the revenue impact FCEP experienced during the second half of 2025.

With strong demand continuing in our Air and Liquid Processing segment, ALP achieved record revenue and income for 2025. As we shared in a recent press release, bookings for both operating segments have accelerated in the first 2 months of this year.

I'm now going to turn the call over to Dave Anderson, Chief Financial Officer and President of our Air and Liquids segment for further comments on this quarter's results for Air and Liquid.

Thank you, Brett. Good morning. As Brett mentioned, 2025 was a record-breaking year for Air and Liquid as we achieved new highs in both revenue and adjusted EBITDA. In Q4, revenue was 10% higher than prior year, while full year revenue was 7% above prior year. The Q4 revenue increase was driven by higher revenue in air handlers and heat exchangers, while full year revenue was higher in all product lines.

Adjusted EBITDA in Q4 was $3.3 million versus $3.7 million in the prior year. The decrease versus prior year was driven by unfavorable product mix. Full year adjusted EBITDA of $15.4 million was the highest in Air and Liquid's history and a 21% increase over prior year.

Backlog declined year-over-year by $8 million, primarily driven by the U.S. Navy's decision to terminate production of the Constellation frigate program, which resulted in $7.1 million of orders being removed from the backlog in late 2025. Costs related to the terminated orders are expected to be paid by the Navy along with normal profit margins.

While backlog ended $8 million lower, we did see significant order activity at the start of 2026, as referenced in our press release dated March 10. Order activity was up 73% for the first 2 months of 2026 compared to prior year.

Bookings in the first 2 months of 2026 for the U.S. Navy market was over $9 million, which more than replaced the $7.1 million from the Constellation frigate program termination.

We continue to see positive activity in multiple markets across our product lines. 2025 orders and shipments for heat exchangers in the nuclear market were the highest in our history as this market continues to show long-term growth potential. There continues to be strong demand from the U.S. Navy, and we expect this demand to continue as the Navy moves forward with fleet expansion plans.

The manufacturing equipment installed in 2024 has already increased manufacturing capacity for our pump product line and there is more capacity expansion in process. Additional manufacturing equipment from the Navy funding program arrived at our facility in early 2026 and is expected to begin producing products in the second quarter of 2026. There is additional equipment expected later this year. This equipment will position us to meet the expected growth in the market.

We are also seeing significant demand for our commercial pumps due to the AI data center market. Our commercial pumps are used in the gas turbine market, which is seeing extremely high demand due to the need for additional power for data centers. Bookings for commercial pumps were at a record high in 2025.

Demand for custom air handlers remains strong as there continues to be significant demand in the pharmaceutical market for our custom air handling products.

In summary, 2025 was the best year in Air and Liquid's history, and we are well positioned in markets that are showing significant long-term growth potential.

Thank you, David. Sam Lyon, President of Forged and Cast Engineered Products segment, will now share more details regarding his group's performance.

Thank you, Brett, and good morning, everyone. For the fourth quarter of 2025, the Forged and Cast Engineered Products division, FCEP, reported net sales of $70.9 million compared to $66.5 million in the fourth quarter of 2024. For the full year, we achieved total net sales of $292.6 million, representing a stable top line performance compared to $286.6 million in the prior year.

Our operating results reflect the strategic transformation of our footprint. On a GAAP basis, the FCEP segment reported an operating loss of $44.7 million for the full year. As Brett mentioned, this was primarily driven by onetime exit costs, including a $41.4 million deconsolidation charge associated with the closure of our U.K. facility.

Given these large onetime charges, we believe adjusted EBITDA provides a clearer picture of our underlying performance.

For the full year of 2025, FCEP generated $24.4 million in adjusted EBITDA. In the fourth quarter, adjusted results were $2.2 million compared to $5.5 million in the prior year. This Q4 decrease was primarily driven by fewer operating days in the U.S. than in Q4 of 2024, higher FEP production relative to rolls and FX headwinds and ramp-up costs in Sweden. In the U.S., we proactively curtailed production days in response to temporary softness in roll demand driven by the digestion of steel tariffs.

With the U.K. closure behind us, one of our primary focus is optimizing our Sweden facility. We have a clear road map for improvements in Sweden throughout 2026 that will begin to materialize in our results this year and be fully realized in 2027. The recent weakening of the dollar to the SEK has created a short-term headwind as supplies and labor are in SEK and Euros, while approximately 40% of our product is sold to the U.S. in dollars. We are adjusting 2027 pricing to account for this and moving some European customers to purchase in SEK.

We are executing a production ramp-up in Sweden and expect to reach a production level of approximately 20% higher than 2025 by Q3 of 2026. Sweden is also improving its mix by removing some lower-margin rolls originally destined for the U.K. and is currently finishing lower margin backlog orders from 2025. We expect the order book to be fully normalized by the end of Q2, positioning us for full margin realization starting in Q3 of 2026.

Our North American customers remain optimistic about 2027 and expect improved volumes, which will translate into higher demand for our roll products. While European market softness persists, consolidating our cast operations in Sweden allows us to better manage utilization. Further consolidation is occurring globally. Recently, 2 competitors have begun winding down operations, creating opportunities for both cast and forged rolls. Additionally, stricter European quotas and increased tariffs, set to take effect in the second half of 2026, should meaningfully increase utilization for our customers driving higher roll demand in 2027.

For our U.S. forged operations, our backlog and pricing have increased meaningfully for our non-rolled FEP as a result of the Section 232 tariffs, which have provided additional diversification in our backlog.

In summary, 2025 was a pivotal year. With the U.K. facility closure, the operational road map for Sweden and tariff protection for our U.S.-made products shipping to U.S. customers supporting pricing, we are well positioned for significant margin expansion in the second half of 2026 and full year 2027.

Thanks, Sam. I'll now turn the call over to Dave Anderson, our Chief Financial Officer, for more detail regarding our financial performance for the quarter. Dave?

Thank you, Brett. As indicated in both our Form 10-K and in our press release 8-K filed yesterday, there was a great deal of onetime primarily noncash items recorded in the quarter related to the previously disclosed decisions to exit the unprofitable U.K. operations and the small steel distribution business in the U.S.

In mid-October, we issued a press release and filed a Form 8-K, which detailed the accelerated exit from our U.K. cast roll facility through a structured insolvency process. The mostly noncash deconsolidation and other costs related primarily to the U.K. exit totaled $42.4 million in Q4 and $52.2 million full year. We also recorded a noncash $11.9 million after tax expense in Q4 related to a revaluation charge of our asbestos accrual. All of this certainly causes a great deal of noise in our Q4 results, which, when we move to discuss adjusted EBITDA, it becomes much easier to see the core business, how it performed in 2025 and expectations of what it looks like going forward.

I do want to provide some details on the noncash asbestos expense, what it means and perhaps more importantly, what it does not mean. For December 31, 2025, we had a third party evaluate our asbestos accrual and provide the adjustment needed based on their projection of payments in the years ahead. This does not mean that we expect our asbestos payments to increase in the years ahead. It is quite the opposite. The estimate projects we will begin to see our asbestos payments decrease starting in 2027. The reason for the increased asbestos accrual at the end of 2025 is because their projection shows the decrease will be slower than what they projected as of December 31, 2024.

Ampco's net sales for the fourth quarter of 2025 were $108.8 million, an increase of $7.8 million compared to net sales for the fourth quarter of 2024. Full year 2025 net sales of $434.2 million, an increase of $3.8 million compared to prior year. The increase in both Q4 and full year was driven by higher sales in both operating segments.

As shown in our press release yesterday, Q4 adjusted EBITDA of $3.2 million was lower than prior year, primarily due to reducing the number of operating days in our FCEP facilities due to the temporary lower roll demand caused by the tariffs. Full year adjusted EBITDA of $29.2 million was $1.1 million higher than prior year and has increased for the third consecutive year. The higher adjusted EBITDA was driven by increased revenue and lower SG&A expenses and was partially offset by lower overhead absorption caused by reducing the operating days.

Total selling and administrative expenses declined $2.8 million or 5% for the full year 2025 versus the prior year and was lower primarily due to lower employee-related costs, partially offset by higher sales commission expenses in both segments.

Depreciation and amortization expense for the quarter and for full year are higher than prior year periods due to the accelerated depreciation portion of the exit charges associated with the U.K. operation and the steel distribution business.

The change in other expense income was primarily driven by lower foreign exchange transaction losses, but also lower pension income given the lower expected long-term asset returns due to the asset allocation changes made to protect the higher retained funded status of our U.S. defined benefit plan. At the end of 2025, our pension plan was nearing fully funded status and in early 2026, did achieve fully funded status.

At December 31, 2025, the corporation's liquidity position included cash on hand of $10.7 million and undrawn availability on our revolving credit facility of $25.5 million.

As I mentioned at the beginning, there was a great deal of noise in Q4 and full year 2025, including the U.K. and steel distribution business shutdowns, and the impact to our overhead absorption caused by the pause in roll orders due to the tariff impact. However, as we enter 2026, the roll market is showing that it is recovering and the shutdown costs are behind us now.

Operator, at this time, we would like to open the line for questions.

[Operator Instructions] The first question will come from Justin Bergner with Gabelli Funds.

Just wanted to delve a little bit more into the Air and Liquid Processing margins. Could you just rereview the mix dynamic in the fourth quarter? And should I think of the mix for the full year and the margins for the full year as being more representative of Air and Liquid Processing as the company grows off of the 2025 base in that business?

Yes. So I would say the full year is definitely more representative of what we would typically see. Q4 Just was a little bit of an unusual mix for us, and it's really timing of just what orders are shipping when, into which markets, but it's just a short-term Q4 issue. I think the full year is much more representative of typically what you would see.

Okay. Any color you can give on what sort of incrementals this business should generate as it grows? If you don't want to go there, I totally understand, but figured I'd put that out there.

The margins are generally good. What I can tell you is in the growth markets that we're seeing, nuclear, the Navy markets, those are all good markets for us. There's very limited competition because it's -- there's a lot of barriers to entry. It's very difficult to supply into those markets. So that's favorable for us.

Okay. Fantastic. And with respect to forged and cast rolls, help me understand the inflection from the headwinds in the second half of '25 to the strong orders in the first half of '26. I mean the tariffs were in place in the second half of '25. So what's changing in terms of customer behavior or market behavior?

Justin, there was a lot of noise because, first of all, the tariffs had to be calculated. On the cast side, almost all the rolls we make are -- they're composite, some part of them is cast iron and part of them is steel. So you had to calculate what the tariff is, and the whole industry had to figure out what the tariff was going to be, so you didn't even know what your pricing was going to be. So a lot of customers, particularly in the U.S. sort of paused what they were doing, what they were taking until that was figured out. And just to -- on the large roll side, which is our most profitable product line, the demand for those kind of slowed down as well as people digested what was happening.

So now that's all digested and you can see that the U.S. continues to raise pricing on hot rolled coil is an indicator. Nucor is about $1,000 a ton now. And demand has been slowly increasing in the U.S.

One other thing I didn't mention is the other thing happened when the U.S. increased tariffs, Canada and Mexico reduced their material coming into the U.S. They have since put tariff protections in place as well to support their markets. And so we're seeing everybody kind of follow the model of the U.S., which should all be positive for us as our biggest markets are North America and Europe so...

Okay. And one more follow-on on Forged and Cast Engineered Products. With respect to the costs in euros and the revenue in dollars, I think you said that's 40% of...

40% is Sweden only, but yes.

Okay. So 40% of Sweden incurs costs in euros and revenue is in dollars. Will that get resolved this year or next year in terms of pricing?

Well, pricing will be in 2027, but we've already seen kind of a recovery from the low point. The SEK to the dollar was as low as SEK 8.8, SEK 8.9. It's SEK 9.3 this morning. So it's already kind of -- we don't know what it's going to do. But right now, it's kind of reverting to the mean a little bit. But we run almost all exclusively on yearly contracts. So there was some adjustment for 2026. There'd be further adjustment for 2027 as all of our -- it hasn't been as significant in euro to dollar, but there has also been a decrease there. And so our competitors will be in the same boat as us from a pricing perspective.

The next question will come from John Bair with Ascend Wealth Advisors, LLC.

Got a question on, saw an article not too long ago about Westinghouse's AP1000 reactors. I was wondering if you're involved in supplying any components there or any involvement with that?

John, it's Dave. I can answer that. The short answer is yes. We have supplied to Westinghouse in the past, and we've supplied to that particular product. So that would definitely fall under our heat exchangers. We don't know the timing yet of when they're expecting those, but we've certainly seen some of the same indicators that they're expecting to ramp up a lot of building those. So that's a positive for us for sure.

How much of a lead time is there in that? I mean, I'm sure it's a long build cycle, but where would you fit into the order cycle of that?

We usually fit in fairly early because they want to secure things like heat exchangers fairly early in the process. So once they have their timetable, then we'll start to see activity from them?

And is there very much of inquiry in that regards? Or is that just kind of out in the distance at this point?

Still a little bit in the distance for that particular, the Westinghouse, the AP1s. We're certainly seeing continued activity in the nuclear market though, across from the plant restarts to all the other things that I've talked about on some of the other calls, the small modular units, the nuclear market continues to be quite active.

This concludes our question-and-answer session. I would like to turn the conference back over to Brett McBrayer for any closing remarks.

Thank you, Nick. In closing, I want to thank our employees who are making the positive improvements you heard about today. With the actions taken in the fourth quarter, our core business is improving. We anticipate improved profitability as we emerge from the slowdown in the steel market. We're excited to demonstrate the improved results for these strategic actions in 2026. I want to thank the Board of Directors and our shareholders for your continued support. Thank you for joining our call this morning.

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.

Welcome to the Ampco-Pittsburgh Corporation Third Quarter 2025 Earnings Results Conference Call. [Operator Instructions] Please note, this event is being recorded.

I would now like to turn the conference over to Kim Knox, Corporate Secretary. Please go ahead.

Thank you, Gary, and good morning to everyone joining us on today's third quarter 2025 Conference Call. Joining me today are Brett McBrayer, our Chief Executive Officer; and Mike McAuley, Senior Vice President, Chief Financial Officer and Treasurer. Also joining us on the call today are Sam Lyon, President of Union Electric Steel Corporation; and Dave Anderson, President of Air and Liquid Systems Corporation.

Before we begin, I would like to remind everyone that participants on this call may make statements or comments that are forward-looking and may include financial projections or other statements of the corporation's plans, objectives, expectations or intentions. These matters involve certain risks and uncertainties, many of which are outside of the corporation's control.

The corporation's actual results may differ significantly from those projected or suggested in any forward-looking statements due to various risk factors, including those discussed in the corporation's most recently filed Form 10-K and subsequent filings with the Securities and Exchange Commission. We do not undertake any obligation to update or otherwise release publicly any revision to our forward-looking statements. A replay of this call will be posted on our website later today. To access the earnings release or webcast replay, please consult the Investors section of our website at ampcopgh.com.

With that, I'd like to now turn the call over to Brett McBrayer, Ampco-Pittsburgh's CEO. Brett?

Thank you, Kim. Good morning, and thank you for joining our call. This was a strong quarter for Ampco-Pittsburgh, both in our underlying financial performance and in the decisive strategic actions we've taken to transform the company.

As reported in our press release, consolidated adjusted EBITDA for the third quarter was $9.2 million, up 35% from the prior year. This was driven by the best year-to-date results in our Air and Liquids segment's history. Our third quarter adjusted earnings per share of $0.04 are up $0.14 from the prior year. This strong underlying performance gives us a solid foundation, and we have taken major steps to quicken that momentum into 2026.

After the quarter closed in October, we accelerate the exit from our U.K. facility. We are also nearing completion of our exit from a small steel distribution business, AUP. The impact from our U.K. exit alone is expected to improve full year adjusted EBITDA by $7 million to $8 million. These 2 actions remove our most significant operational drag and positions us for dramatically improved profitability as we move forward.

For further details regarding our segment performance, I'll turn the call over to Sam Lyon, President of our Forged and Cast Engineered Products segment. Sam?

Thank you, Brett, and good morning. For the third quarter of 2025, FCEP's net sales were $71.5 million, $6.4 million lower than Q2 2025 and $4.3 million ahead of Q3 2024. We had our typical summer shutdowns of our European facilities in Q3. The Q3 revenue includes about $0.9 million in tariff pass-throughs.

Segment adjusted EBITDA, which excludes the exit charges associated with the U.K. cash facility and the AUP steel distribution operations was $7.1 million higher than Q2 and $0.3 million better than Q3 of 2024. FEP demand and shipments have improved. Year-to-date, FEP revenue increased approximately 40% to $14.4 million compared to $10.2 million last year. We continue to raise prices on this product, improving margins as import barriers have increased.

Looking at the roll market in North America, some customers temporarily postponed roll purchases due to tariff uncertainty and as a result, have lowered their existing roll inventory. This supports our view that a return to more normal roll ordering patterns is approaching as inventory levels deplete. Overall, tariffs are expected to have a neutral impact on roll demand in North America as our U.S. customers will benefit. Conversely, tariffs will negatively affect our Canadian and Mexican customers as their imports into the U.S. are affected. To date, we've passed all tariffs on to our customers.

The tariff environment for our European imports remains a key focus. Our imports to the U.S. from Sweden now face tariffs between 15% and 27%, and products from Slovenia faced rates as high as 50%. The Castrol market in North America continues to exceed domestic capacity, so long-term demand for our European cast rolls should not be affected by these tariffs. We expect that the roll tariff effect will be temporary. In addition, our European customers have lean inventory. Any uptick in demand will require additional roll orders.

Europe recently announced plans to modify its quota and tariff system for steel, which when implemented in July of 2026, will result in dramatically increased utilization of European mills. The quotas will reset to lower volumes and any steel imports above these quotas will be subject to a 50% tariff, up from 25% currently. This new system has the potential to be a significant tailwind for our roll business. Long-term fundamentals remain strong, construction spending, automotive production and can sheet demand are all expected to grow at mid-single-digit rates over the next 5 years.

As formally disclosed, we have placed our U.K. Castrol plant into administration. The insolvency commenced on October 14, 2025, and is being managed by appointed administrators. This action accelerated our time line for closure. Our losses stopped as of October 14, much earlier than our original solvent wind-down plan, which had us operating through the first quarter of 2026. We now expect the U.K. facility to complete all work in process inventory and ship these orders by year-end 2025, minimizing disruption to our customers.

As a result of the U.K. closure, our Sweden plant will run at a higher utilization rate in 2026, improving its profitability. To further improve the CEP segment, we have decided to wind down our small unprofitable and noncore alloys unlimited steel distribution facility. That exit will conclude by the end of November. The actions we took this quarter to address underperforming assets will deliver meaningful improvements in operating income and adjusted EBITDA for the segment.

Brett, back to you.

Thank you, Sam. David Anderson, President of Air and Liquid Systems will now cover his segment's results.

Thank you, Brett. Good morning. 2025 continues to be a positive year for Air and Liquid. In Q3, revenue was 26% higher than prior year, while year-to-date revenue was nearly 7% above prior year. The Q3 revenue increase was driven by higher revenue in all product lines. while year-to-date revenue was higher due to increased revenue for pumps.

Segment adjusted EBITDA in Q3 was $4.4 million versus $3.4 million in the prior year. The 31% increase versus prior year was driven by higher revenue and improved product mix. Year-to-date segment adjusted EBITDA of $12.1 million was the highest in Air and Liquid's history and a $3.1 million increase over prior year.

We continue to see positive activity in the nuclear market for our heat exchange product line. Orders and shipments have already exceeded any prior full year. from restarting legacy plants to the new small modular reactors, nuclear power appears to be at the beginning of significant long-term market growth. Our engineering and manufacturing capabilities positions us well as this market continues to grow. There continues to be strong demand from the U.S. Navy, and we expect this demand to continue as the Navy moves forward with fleet expansion plans.

The manufacturing equipment installed in 2024 has already increased manufacturing capacity for our pump product line, and there is more capacity expansion in process. In the weeks ahead, new manufacturing equipment from the Navy funding program is expected to arrive at our facility, and there will be more equipment arriving in 2026 from the same Navy program. This equipment, along with the equipment we installed in 2024 will position us to meet the expected growth in this market.

Demand for custom air handlers remains strong. from upgrading existing facilities to increasing research and manufacturing capabilities in the United States. There continues to be tremendous demand in the pharmaceutical market for our custom air handling products.

Tariffs continue to be a major subject in the last few months. The tariff on copper, which is a main component of our heat exchangers, has been in place for a few months now. We've been able to adjust our supply chain to avoid most of the tariff costs and are passing on any remaining tariff costs to our customers.

While there may be some short-term fluctuations as the supply chain adjusts, in the long term, anything that results in increased manufacturing in the United States will increase demand for our products. In summary, demand for our products remain strong. 2025 will be the best year in Air and Liquid's history, and we are well positioned in markets that are showing significant long-term growth potential.

Thank you, Dave. At this time, Mike McAuley, our Chief Financial Officer, will now share more details regarding our financial performance for the quarter.

Thank you, Brett. As indicated in both our Form 10-Q and in our press release 8-K filed yesterday. While we have recorded charges totaling $3.1 million in the quarter relating to reducing our operational footprint for significant future projected earnings improvements, the underlying business has improved with significantly higher consolidated adjusted EBITDA and adjusted EPS in Q3 2025 than in the prior year, which is true for the year-to-date period as well and all while we have navigated some short-term disruptions from tariff policy in our customer base.

In October, we issued a press release and filed a Form 8-K, which detailed the accelerated exit from our U.K. cast roll facility through a structured insolvency process. This removes that subsidiary's operating results from our consolidated results immediately from that date forward. This represents a departure from our previous plan to unwind it more gradually into early 2026. And stopping those losses sooner. In conjunction with that action, we will deconsolidate the U.K. subsidiary in Q4. And when we and we reported that we expect a significant noncash write-down as itemized in the report and again, in Note 2 to our Q3 Form 10-Q.

The major benefits of this approach beyond sooner operating loss reduction is avoidance of significant cash plant closure costs. and an expectation for a material revolving credit facility borrowing reduction as distributions from the administrators from liquidation proceeds are remitted to the secured creditor which is expected by around mid-2026. To reiterate, we expect adjusted EBITDA to improve by $7 million to $8 million per full year post the U.K. deconsolidation, and that begins in early Q4 2025.

Now back to Q3 results. Ampco's net sales for the third quarter of 2025 were $108 million, an increase of 12% compared to net sales for the third quarter of 2024. The increase was primarily driven by higher sales in all 3 divisions of Air and Liquid Processing. Higher net roll pricing and higher shipments of forged engineered products in the Forged and Cast Engineered Products segment, which more than offset softer roll shipment volumes during the quarter.

As I mentioned, we recorded $3.1 million in noncash accelerated depreciation and other expenses in Q3 related to the exit of our U.K. cast roll business and our small Alloys Unlimited steel distribution business. These expenses are spread by the pertinent income statement line item in the consolidated P&L, but are summarized for you in Note 2 to our Q3 Form 10-Q and in the non-GAAP reconciliation table attached to the Q3 earnings press release.

Referring to that non-GAAP reconciliation schedule, please note that consolidated adjusted EBITDA of $9.2 million for the third quarter of 2025 improved by $2.4 million versus prior year. This was driven by a few primary reasons. Higher pricing and surcharges net of changes in manufacturing costs in the Forged and Cast Engineered Products segment, higher shipment volumes of forged engineered products, which helped to partially mitigate the impact of lower mill roll shipment volumes, unfavorable manufacturing overhead absorption compared to the prior year quarter related to temporary plant shutdowns typically taken in Q3 of each year in the Forged and Cast Engineered Products segment and the higher shipment volumes and improved product mix experienced in the Air and Liquid Processing segment.

2025 year-to-date adjusted EBITDA of $26 million remains up versus prior year. Total selling and administrative expenses declined $0.6 million or 4% for Q3 2025 versus prior year due to employee -- lower employee-related costs, offset in part by professional fees associated with our efforts to exit the U.K. operations and higher sales commissions in both segments.

Depreciation and amortization expense for the quarter and for the year-to-date are higher than prior year periods due to the accelerated depreciation portion of those exit charges associated with the U.K. and always [indiscernible] unlimited steel distribution business. Severance charges and loss on disposal of assets stem from the exit as well. And again, are part of those exit charges itemized in Note 2 in Form 10-Q and in the non-GAAP reconciliation table.

Interest expense for the third quarter is approximately flat with prior year. The change in other expense income net was driven primarily by lower foreign exchange transaction losses, but also by lower pension income. Given the lower expected long-term asset returns, given the asset allocation changes we've made to protect a much higher funded status of our U.S. defined benefit plan.

The income tax provision for 2025 is benefiting from a lower statutory tax rate than one of our foreign tax paying jurisdictions. As a result, net loss attributable to Ampco-Pittsburgh for the 3 months ended September 30, 2025, was $2.2 million or $0.11 per share, which includes $3.1 million or $0.15 per share for the exit charges.

Referring to the non-GAAP reconciliation schedule attached to the earnings release, please note that adjusted earnings per share of $0.04 for Q3 2025 was up $0.14 from prior year and for the year-to-date period ended September 30, 2025, adjusted EPS of $0.03 was up 16% -- $0.16 per share, excuse me. So significant underlying improvement there.

At September 30, 2025, the corporation's liquidity position included cash on hand of $15 million and undrawn availability on our revolving credit facility of $28.2 million.

Operator, at this time, we would now like to open the line for questions.

[Operator Instructions] Our first question is from David Wright with Henry Investment Trust.

I couldn't let you go without anyone asking you questions because that's about the best report you've had in a long time, so congratulations. Two for Mike. On the U.K. closure and the question on the difference between bankruptcy filing in the U.S. and this filing in the U.K. You addressed the operating results and being absolved of them. Is the subsidiary's debt is the parent also absorbed that as a result of the filing?

Yes. Yes. In fact, there's -- going along with that process. First of all, the insolvency is exclusively related to the subsidiary has nothing to do, doesn't affect any other subsidiary segment or the entire or Ampco-Pittsburgh. But that process is something we have been thinking about, but as we got into more investigations on it, it became more evident that it was the best answer for Ampco. It did accelerate our exit. And there is no material local debt other than the -- like the pension obligations, which are now -- we're part of that business and its other liabilities.

But we didn't have direct debt. It never issued direct debt itself. But we had significant closure costs, which were liabilities that we expected to incur which were no longer going to incur, David. You can see those -- if you look back at what we've recorded earlier in the year as charges, for example, severance charge, something in the range of $7 million, that's going to be reversed as part of the Q4 deconsolidation.

So the secured debt is just secured against the U.K. assets?

Secured debt? Are you talking about the corporation's revolving credit facility?

No, no, no. The debt that has to be liquidated, the debt that has to be paid off as the assets of the U.K. operation are liquidated.

Yes. Those will primarily be accounts payable incurred accounts payable that hadn't been paid yet, any other liabilities that are on the balance sheet of that subsidiary, any liabilities which materialize as the real estate eventually gets liquidated, and any cost for the administration, any commissions for the sale of the assets. All be handled out of the remaining assets of the subsidiary, yes.

Okay. The other question for you, Mike, is you alluded to the pension plan. Are you doing an evaluation again this year -- the pension plan excuse me, the asbestos liability.

Yes, we will.

Okay. So is that going to be an annual thing now?

It has been in the last couple of years. We've migrated to an annual of that, David, and we're going to do it again in Q4.

Okay. And then one for Dave. It looks like your run rate based off the last quarter sales were $140 million annualized. And I know you undertook a capacity expansion. You talked about the demand from pharmaceutical companies continuing how much more can you put through the system?

We can put significantly more through the system, David. And we're addressing that in multiple ways. The equipment coming in through the Navy funding program is state-of-the-art. So we're getting significant improvements in manufacturing efficiencies. We're also looking at other projects at our facilities to improve our utilization, improve our efficiencies. We still have a long runway.

And remind me on the nuclear plants, like where are you in the food chain, if they want to restart a plan or they want to build a new one. Are you early or late?

We're usually early. Often, we have supplied the heat exchangers well in advance before they're opening the facility. We've already been to some of the ones that are reopening, and that was a while ago, we were up in Michigan to the first one. So we're early in the process.

Okay. All right. Great. Well, like I said, best quarter, you've reported in a long time and hope lots of people see it. Thanks very much.

Your next question is from John Bair with Ascend Wealth Advisors.

I'll echo the congrats on a good quarter here. My question kind of cycles back to the discontinued operations. Do you anticipate getting any kind of monetization, I guess, from the liquidation of properties and so forth in those operations? Or will it all go to the trustee that's the receivership, I guess, that's settling that out.

Yes. That's a good question. And actually, part of the answer to that is disclosed in the 8-K that we issued, so you can read more about it there. But I'll give -- the overview really is as the assets get liquidated, there's a priority of payments that the administrator will follow according to U.K. solvency law. And the secured creditors are settled first and the secured claims are principally the bank debt, those are the claims. Those are the charge holders for the on that legal entity. And so that would be our bank group.

And so the liquidation proceeds would first go and be remitted to the bank group who would then reduce our outstanding asset-based loan balance, which is our revolving credit facility. So yes, we do expect. We had some projections from the administrator, and we've analyzed those, and we've included those in our assessment of the net charge we will record in Q4, and we'll net that charge down by an estimated proceeds amount, which is $8 million to $9 million expected in net proceeds through that process.

Just one comment, part of that -- this is Sam. The administrator, they have continued to run the plant. So anything that was not -- that had already been through the melting process. They're finishing those rules, turning them into finished goods and shipping them and monetizing that which ends up being part of the funds that will end up funneling back through. So it's a double benefit, number one, that generates more value and number two, it actually helps with our customers in the transition of closing the plant.

Okay. So just high altitude, you're looking at possibly somewhere in the $8 million, $9 million that could flow back to you after this is all closed out, right?

Yes, in the form of reduced bank debt, yes.

Okay. Okay. Okay. And then following up on that then, my understanding is that you'd be supplying or hoping to supply existing customers that have been served by that facility from your other European operations. Is that right?

A portion of it, John, this is Sam again. The work rules, we will maximize the Sweden plant. So the utilization there will definitely increase significantly. And then there was one type of roll that we made that cannot be made in Sweden, some of them will be converted to forged rolls. There's very limited supply in the marketplace. So we'll see some of that come to the U.S. But there'll be an overall slight reduction in revenue, but obviously a big gain in profitability.

Okay. So the Sweden plant will be more efficient and more higher utilization? Is that a fair way to look at it?

That is a fair way to look at it, yes.

This concludes our question-and-answer session. I would like to turn the conference back over to Brett McBrayer for any closing remarks.

In closing, I want to share an important corporate update and then leave you with a final thought on our path forward. We recently announced that David Anderson will become our new CFO on January 1, 2026, while also continuing his duties as President of Air and Liquid Processing.

Dave's prior CFO experience in both of our segments positions him uniquely well for this expanded role. Dave has a deep and tenured team at Air and Liquid Processing, which gives us full confidence in his ability to manage both responsibilities and drive strong performance across the organization.

I also want to acknowledge and thank Mike McAuley for his significant contributions. Mike will continue working for me as a strategic adviser for the first half of 2026 to ensure a seamless transition.

Finally, I want to thank our employees who are making the positive improvements you heard about today. Our message this quarter is clear. Our core business is improving, and we have taken the difficult but necessary steps to address our underperforming assets. By exiting the U.K. in our small steel distribution business, AUP we are removing the most significant drags on our profitability.

We entered 2026 stronger, more focused and a more profitable company. I want to thank the Board of Directors and our shareholders for your continued support. Thank you for joining our call this morning.

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.