Ampco-Pittsburgh(AP -5.45%) reported second-quarter 2025 results on Aug. 12, posting a net loss of $7.3 million (GAAP) due to a $6.8 million United Kingdom plant exit charge. Management announced progress winding down United Kingdom operations, strong adjusted EBITDA growth in the Air and Liquid Processing segment both in the quarter and year-to-date, and significant credit facility flexibility, providing clarity for the company’s post-United Kingdom-exit earnings potential and capital structure.

United Kingdom exit positions Ampco-Pittsburgh for operating income growth

The United Kingdom cast roll facility accrues annual operating losses that management expects will abate following consolidation to Sweden; costs tied to the United Kingdom plant comprised nearly the entire $6.8 million expense. The Swedish site is currently underutilized but will see higher volumes as orders are redirected post-closure, helping offset revenue loss. Some product will shift to Sweden, with conversion of rolls to forge rolls totaling $3 million or $4 million, according to management commentary.

"Progress on the wind down of this facility has progressed well as we work to accelerate rightsizing our portfolio. Once this action is complete, we expect a minimum of a $5 million operating income improvement on an annualized basis."
-- Brett McBrayer, Chief Executive Officer

The closure and asset reallocation are expected to structurally increase segment operating income by at least $5 million annually, representing a material margin expansion for a company with trailing adjusted EBITDA of $16.8 million year-to-date.

Air and Liquid Processing segment delivers record profitability

The Air and Liquid Processing segment achieved year-to-date adjusted EBITDA of $7.7 million, a 36% year-to-date increase in adjusted EBITDA over the prior year for the segment, while backlog grew 8% year-to-date amid strong demand from nuclear and military customers. Navy and government equipment funding is supporting capacity investments at the Buffalo plant, advancing future revenue resilience.

"Year-to-date adjusted EBITDA of $7.7 million was the highest in Air and Liquid's history and a 36% increase over the prior year. We continue to see positive activity in the nuclear market for our heat exchanger product line. Orders have already exceeded any prior full year, and we expect shipments to also be at record levels this year."
-- David Anderson, President, Air and Liquid Systems Corporation

Record profitability and backlog in this segment highlight the company’s ability to capitalize on robust demand in defense and nuclear markets, supporting long-term growth prospects.

Credit agreement extension boosts Ampco-Pittsburgh liquidity and flexibility

Total available liquidity as of June 30, 2025, stood at $9.9 million in cash plus $34.2 million in undrawn credit, with a new facility running through Feb. 19, 2030, restructuring a $100 million revolving credit line and a $13.5 million term loan. Term loan proceeds were used to pay down revolver balances, resulting in greater capital deployment flexibility.

"At the end of June, we amended and extended our credit agreement through February 19, 2030. We restructured the facility into a $100 million revolving credit line backed by eligible accounts receivable and inventory plus a $13.5 million term loan backed by certain eligible machinery and equipment. The structure and added capacity provide us greater flexibility to support our global working capital needs."
-- Mike McAuley, SVP, CFO, and Treasurer

Extending and expanding borrowing capacity improves Ampco-Pittsburgh ability to navigate demand variability and fund operational transitions without near-term refinancing risk.

Looking Ahead

Management expects the permanent closure of the United Kingdom facility to be substantially completed between October and December 2025, with the full $5 million operating income uplift expected to be realized in 2026. The Air and Liquid Processing segment expects shipments to reach record levels this year, with delivery of Navy-funded manufacturing equipment anticipated by year-end 2025. No explicit quarterly or annual revenue or EBITDA guidance was issued during the call.