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What changed in AMPCO PITTSBURGH CORP's 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of AMPCO PITTSBURGH CORP's 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+203 added−189 removedSource: 10-K (2025-03-17) vs 10-K (2024-03-25)

Top changes in AMPCO PITTSBURGH CORP's 2024 10-K

203 paragraphs added · 189 removed · 150 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

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Biggest changeThe Corporation is actively monitoring, and will continue to actively monitor, the geopolitical and economic consequence of these events and the potential impact on its operations, financial condition, liquidity, suppliers, industry, and workforce. NARRATIVE DESCRIPTION OF BUSINESS Forged and Cast Engineered Products Segment The FCEP segment produces forged hardened steel rolls, cast rolls and forged engineered products (“FEP”).
Biggest changeThe Corporation is actively monitoring, and will continue to actively monitor, the lingering effects from a post-pandemic environment, repercussions from the Russia-Ukraine and Middle East conflicts and similar geopolitical matters, economic conditions, and other developments relevant to its business including the potential impact on its operations, financial condition, liquidity, suppliers, industry, and workforce.
Union Electric Steel (Hong Kong) Limited, a non-operating subsidiary of UES, holds a 33% interest in the joint venture. 2 Jiangsu Gong-Chang Roll Co., Ltd. is a joint venture that produces cast rolls for hot strip mills, medium/heavy section mills and plate mills. It is located in Xinjian Town Yixing City, Jiangsu Province, China.
Union Electric Steel (Hong Kong) Limited, a non-operating subsidiary of UES, holds a 33% interest in the joint venture. Jiangsu Gong-Chang Roll Co., Ltd. is a joint venture that produces cast rolls for hot strip mills, medium/heavy section mills and plate mills. It is located in Xinjian Town Yixing City, Jiangsu Province, China.
Alloys Unlimited Processing, LLC is a distributor of tool steels and alloys and carbon round bar. It is located in Austintown, Ohio. The segment’s three joint venture companies in China include: Shanxi Åkers TISCO Roll Co., Ltd. is a joint venture between Taiyuan Iron and Steel Co.
Alloys Unlimited Processing, LLC (“AUP”) is a distributor of tool steels and alloys and carbon round bar. It is located in Austintown, Ohio. The segment’s three joint venture companies in China include: Shanxi Åkers TISCO Roll Co., Ltd. is a joint venture between Taiyuan Iron and Steel Co.
It is located in Åkers Styckebruk, Sweden. Åkers Valji Ravne d.o.o. produces forged rolls for cluster mills and Z-Hi mills, work rolls for narrow and wide strip and aluminum mills, back-up rolls for narrow strip mills, and leveling rolls and shafts. It is located in Ravne, Slovenia.
It is located in Åkers Styckebruk, Sweden. 2 Åkers Valji Ravne d.o.o. produces forged rolls for cluster mills and Z-Hi mills, work rolls for narrow and wide strip mills and aluminum mills, back-up rolls for narrow strip mills, and leveling rolls and shafts. It is located in Ravne, Slovenia.
He previously served as Vice President and Group President of Performance Engineered Products at Carpenter Technology Corporation, a developer, manufacturer and distributor of stainless steels and corrosion-resistant alloys from July 2017 to January 2019. David G. Anderson (age 56). Mr.
He previously served as Vice President and Group President of Performance Engineered Products at Carpenter Technology Corporation, a developer, manufacturer and distributor of stainless steels and corrosion-resistant alloys from July 2017 to January 2019. David G. Anderson (age 57). Mr.
McAuley has served as Senior Vice President, Chief Financial Officer and Treasurer of the Corporation since March 2018 and as Vice President, Chief Financial Officer and Treasurer since April 2016. Samuel C. Lyon (age 55). Mr. Lyon has served as President of Union Electric Steel Corporation since February 2019.
McAuley has served as Senior Vice President, Chief Financial Officer and Treasurer of the Corporation since March 2018 and as Vice President, Chief Financial Officer and Treasurer since April 2016. Samuel C. Lyon (age 56). Mr. Lyon has served as President of Union Electric Steel Corporation since February 2019.
Buffalo Air Handling Division of Air & Liquid Systems Corporation produces large custom-designed air handling systems for institutional (e.g., hospital, university), pharmaceutical and general industrial building markets. Its primary manufacturing facility is located in Amherst, Virginia with an additional Virginian manufacturing location added in the latter part of 2023.
Buffalo Air Handling Division of Air & Liquid Systems Corporation produces large custom-designed air handling systems for institutional (e.g., hospital, university), pharmaceutical and general industrial building markets. Its primary manufacturing facility is located in Amherst, Virginia with an additional Virginian manufacturing location added in the second half of 2023.
Aerofin Division of Air & Liquid Systems Corporation produces custom-engineered finned tube heat exchange coils and related heat transfer products for a variety of industries including OEM/commercial, nuclear power generation and industrial manufacturing. It is located in Lynchburg, Virginia.
Aerofin Division of Air & Liquid Systems Corporation produces custom-engineered finned tube heat exchange coils and related heat transfer products for a variety of industries including original equipment manufacturers and commercial, nuclear power generation and industrial manufacturing. It is located in Lynchburg, Virginia.
McBrayer received a Bachelor of Science in Industrial Engineering from the University of Tennessee and a Master of Arts in Applied Behavioral Science from Bastyr University. Michael G. McAuley (age 60). Mr.
McBrayer received a Bachelor of Science in Industrial Engineering from the University of Tennessee and a Master of Arts in Applied Behavioral Science from Bastyr University. 4 Michael G. McAuley (age 61). Mr.
Environmental Protection Compliance Costs Expenditures for environmental control matters were not material to either segment in 2023 and are not expected to be material in 2024. 3 Employees and Human Capital Management Employees On December 31, 2023, the Corporation and its subsidiaries had 1,697 active employees worldwide (substantially all full-time), of which approximately 58% were employed in the United States.
Environmental Protection Compliance Costs Expenditures for environmental control matters were not material to either segment in 2024 and are not expected to be material in 2025. Employees and Human Capital Management Employees On December 31, 2024, the Corporation and its subsidiaries had 1,634 active employees worldwide (substantially all full-time), of which approximately 56% were employed in the United States.
Products are delivered directly to the customer via third-party carriers or customer-arranged transportation. For the FCEP segment, one customer accounted for 11% and 10% of its net sales in 2023 and 2022, respectively, the loss of which could have a material adverse effect on the segment.
Products are delivered directly to the customer via third-party carriers or customer-arranged transportation. For the FCEP segment, one customer accounted for 11% of its net sales in both 2024 and 2023, the loss of which could have a material adverse effect on the segment. For the ALP segment, no customers exceeded 10% of its net sales in 2024 or 2023.
Approximately 13% of the backlog is expected to be released after 2024. Competition The Corporation faces considerable competition from a large number of companies in both segments. The Corporation believes, however, its subsidiaries are significant participants in each of the niche markets they serve. Competition in both segments is based on quality, service, price, and delivery.
Competition The Corporation faces considerable competition from a large number of companies in both segments. The Corporation believes, however, its subsidiaries are significant participants in each of the niche markets they serve. Competition in both segments is based on quality, service, price, and delivery.
The information on the Corporation’s website is not part of this Annual Report on Form 10-K. EXECUTIVE OFFICERS The name, age, position with the Corporation, and business experience for at least the past five years of the Executive Officers (1) of the Corporation are as follows: J. Brett McBrayer (age 58). Mr.
The information on the Corporation’s website is not part of this Annual Report on Form 10-K. EXECUTIVE OFFICERS The name, age, position with the Corporation, and business experience for at least the past five years of the Executive Officers of the Corporation are summarized below.
McBrayer has served as Chief Executive Officer of the Corporation since July 2018. He previously served as President and Chief Executive Officer at Airtex Products and ASC Industries, a global manufacturer and distributor of automotive after-market and OEM fuel and water pumps from 2012 to 2017.
He previously served as President and Chief Executive Officer at Airtex Products and ASC Industries, a global manufacturer and distributor of automotive after-market and original equipment manufacturer fuel and water pumps from 2012 to 2017.
Patents and Trademarks While the Corporation and its subsidiaries hold certain patents, trademarks and licenses, in the opinion of the Corporation, they are not material to either segment. Backlog The backlog of orders at December 31, 2023 was approximately $378.9 million compared to a backlog of $369.0 million at year-end 2022.
Patents and Trademarks While the Corporation and its subsidiaries hold certain patents, trademarks and licenses, in the opinion of the Corporation, they are not material to either segment. Backlog The backlog of orders approximated $378.9 million at December 31, 2024 and 2023, respectively.
Backlog for the FCEP segment decreased by approximately $4.6 million year over year due to lower FEP and cast roll orders partly offset by improved demand and selling prices for mill rolls and higher foreign exchange rates used to translate the backlog of the Corporation’s foreign subsidiaries into the U.S. dollar.
Backlog for the FCEP segment increased by approximately $2.9 million due to improved order intake for cast rolls offset by lower backlog for forged rolls and lower 3 foreign exchange rates used to translate the backlog of the Corporation’s foreign subsidiaries into the U.S. dollar.
(1) Officers serve at the discretion of the Board of Directors of the Corporation and none of the listed individuals serve as a director of another public company. 4
Officers serve at the discretion of the Board of Directors of the Corporation and none of the listed individuals serve as a director of another public company. J. Brett McBrayer (age 59). Mr. McBrayer has served as Chief Executive Officer of the Corporation since July 2018.
Collectively, the segment primarily competes with European, Asian and North and South American companies in both domestic and foreign markets and operates several sales offices located throughout the world. Union Electric Steel Corporation (“UES”) produces forged hardened steel rolls and FEP. It is headquartered in Carnegie, Pennsylvania, with three manufacturing facilities in Pennsylvania and one in Indiana.
Union Electric Steel Corporation (“UES”) produces forged hardened steel rolls and FEP. It is headquartered in Carnegie, Pennsylvania, with three manufacturing facilities in Pennsylvania and one in Indiana.
Forged hardened steel rolls are used primarily in hot and cold rolling mills by producers of steel, aluminum and other metals. Cast rolls, which are produced in a variety of iron and steel qualities, are used mainly in hot strip mills, medium/heavy section mills, roughing mills, and plate mills.
Cast rolls, which are produced in a variety of iron and steel qualities, are used mainly in hot strip mills, medium/heavy section mills, roughing mills, and plate mills. FEP principally are sold to customers in the steel distribution market, oil and gas industry and the aluminum and plastic extrusion industries.
For the ALP segment, no customers exceeded 10% of its net sales in 2023 or 2022. For additional information on the products produced and financial information about each segment, see Note 17 , Revenue , and Note 24 , Business Segments , to the Consolidated Financial Statements.
For additional information on the products produced and financial information about each segment, see Note 23 , Business Segments , to the Consolidated Financial Statements included in Item 8 to this Annual Report on Form 10-K (the “Consolidated Financial Statements”).
Removed
While the Corporation currently is operating at more normal levels, when compared to the operating levels during the pandemic and immediately thereafter, it continues to be challenged by lingering global economic effects of a post-pandemic environment and repercussions from the Russia-Ukraine conflict, among other events, including: • Periodic disruptions to the global supply chain for the Corporation, its vendors and its customers; • Global inflationary pressures; • Depressed business activity in Europe and Asia (specifically China); and • Global economic uncertainty.
Added
For the FCEP segment, global steel manufacturing capacity continues to exceed global consumption of steel products. Demand for steel in the segment’s two largest markets, North America and Europe, softened during 2024 compared to 2023 and 2022 and is approximately 15% below 2019 pre-pandemic levels as of December 31, 2024.
Removed
FEP principally are sold to customers in the steel distribution market, oil and gas industry and the aluminum and plastic extrusion industries. The segment has operations in the United States, England, Sweden, Slovenia, and an equity interest in three joint venture companies in China.
Added
The financial impact from weaker demand has been mitigated through higher pricing and increased participation in new mill builds, primarily in North America. Recent order intake has shown improvement, and shipments are expected to increase for the segment’s cast roll facilities and pricing to remain stable in 2025.
Removed
Backlog for the ALP segment increased by approximately $14.5 million and benefited from improved order intake for each of the product lines.
Added
In addition, forged engineered products (“FEP”) order activity is improving after several years of depressed demand. Increased entry of low-priced products from other countries has negatively impacted local demand in Europe and the U.S., with several of the segment’s largest customers engaging in trade cases to reduce the number of imports into the U.S.
Added
In addition, the new administration has announced new tariffs on steel and aluminum imports to the U.S. and has, for now, removed the exceptions that allowed some countries to continue sending products to the U.S.
Added
The primary focus for the FCEP segment is to improve its profitability by maintaining a strong position in the roll market and continuing to improve operational efficiency and equipment reliability following the completion of the previously announced capital equipment program.
Added
In addition, in February 2025, the segment's U.K. operations entered into a formal consultation process with its unions and staff to evaluate various options to improve its profitability.
Added
For the ALP segment, businesses are benefiting from steady demand and increased market share but are facing increasing production costs due to inflation and supply chain issues as a result of the lingering effects from a post-pandemic environment. The segment has been implementing price increases for certain of its products to help mitigate these inflationary effects.
Added
The focus for this segment is to grow revenues, strengthen engineering and manufacturing capabilities to keep pace with growth opportunities, and continue to improve its sales distribution network.
Added
NARRATIVE DESCRIPTION OF BUSINESS Forged and Cast Engineered Products Segment The FCEP segment produces forged hardened steel rolls, cast rolls and FEP. Forged hardened steel rolls are used primarily in hot and cold rolling mills by producers of steel, aluminum and other metals.
Added
The segment has operations in the United States, England, Sweden, Slovenia, and an equity interest in three joint venture companies in China. Collectively, the segment primarily competes with European, Asian, and North and South American companies in both domestic and foreign markets and operates several sales offices located throughout the world.
Added
Backlog for the ALP segment decreased by approximately $3.0 million year over year with backlog for air handling units and heat exchange coils declining from a year ago offset by improved order intake for centrifugal pumps. Approximately 5% of the backlog is expected to be released after 2025.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

46 edited+14 added−7 removed77 unchanged
Biggest changeIf the New York Stock Exchange determines our common stock fails to satisfy the requirements for continued listing, or we continue to fail to meet listing criteria, our common stock could be de-listed from the New York Stock Exchange, which could impact potential liquidity for our shareholders.
Biggest changeIf the New York Stock Exchange determines our common stock fails to satisfy the requirements for continued listing, or we continue to fail to meet listing criteria, and if the New York Stock Exchange does not provide us with an opportunity to become compliant or does not approve our actions to become compliant, 9 or we do not make sufficient progress satisfactory to the New York Stock Exchange, our common stock could be de-listed from the New York Stock Exchange, which could impact potential liquidity for our shareholders.
Failure of financial institutions or the need of liquidity from third-party sources by financial institutions may place additional stress on other financial institutions, which may limit our, or our customers’, access to short-term financing or result in higher interest rates.
Failure of financial institutions or the need of liquidity from third-party sources by financial institutions may place additional stress on other financial institutions, which may limit our access, or our customers’ access, to short-term financing or result in higher interest rates.
Specifically, the New York Stock Exchange requires a company with common equity listed on its exchange to maintain average global market capitalization over a consecutive 30 trading-day period of at least $50 million or maintain shareholders’ equity of at least $50 million and maintain a share price of at least $1.00.
Specifically, the New York Stock Exchange requires a company with common equity listed on its exchange to maintain average global market capitalization over a consecutive 30-day trading period of at least $50 million or maintain shareholders’ equity of at least $50 million and maintain a share price of at least $1.00.
This exclusive forum provision does not apply to suits brought to enforce a duty or liability created by the Securities Exchange Act of 1934, as amended (the “Exchange Act”) or the Securities Act of 1933, as amended (the “Securities Act”).
This exclusive forum provision does not apply to suits brought to enforce a duty or liability created by the Securities Exchange Act of 1934 (the “Exchange Act”), as amended, or the Securities Act of 1933 (the “Securities Act”), as amended.
While our Board of Directors and management team strive to maintain constructive, ongoing communications with all of our shareholders, including activist shareholders, and welcome their views and opinions with the goal of working together constructively to enhance value for all shareholders, activist campaigns that contest, or conflict with, our strategic direction could have an adverse effect on us because: (i) responding to actions by activist shareholders can disrupt our operations, be costly and time-consuming and divert the attention of our Board of Directors and senior management from the pursuit of business strategies, which could adversely affect our results of operations and financial condition; (ii) perceived uncertainties as to our future direction may lead to the perception of a change in the direction of the business, instability or lack of continuity which may be exploited by our competitors, cause concern to our current or potential customers, result in the loss of potential business opportunities 9 and make it more difficult to attract and retain qualified personnel and business partners; and (iii) these types of actions could cause significant fluctuations in our stock price due to factors not necessarily reflecting the underlying fundamentals and prospects of our business.
While our Board of Directors and management team strive to maintain constructive, ongoing communications with all of our shareholders, including activist shareholders, and welcome their views and opinions with the goal of working together constructively to enhance value for all shareholders, activist campaigns that contest, or conflict with, our strategic direction could have an adverse effect on us because: (i) responding to actions by activist shareholders can disrupt our operations, be costly and time-consuming and divert the attention of our Board of Directors and senior management from the pursuit of business strategies, which could adversely affect our results of operations and financial condition; (ii) perceived uncertainties as to our future direction may lead to the perception of a change in the direction of the business, instability or lack of continuity which may be exploited by our competitors, cause concern to our current or potential customers, result in the loss of potential business opportunities and make it more difficult to attract and retain qualified personnel and business partners; and (iii) these types of actions could cause significant fluctuations in our stock price due to factors not necessarily reflecting the underlying fundamentals and prospects of our business.
Various jurisdictions in which we do business have implemented, or in the future could implement or amend, restrictions on emissions of carbon dioxide or other greenhouse gases, 8 limitations or restrictions on water use, changes from traditional fossil fuel sources to renewables, regulations on energy management and waste management, and other climate change-based rules and regulations, which may increase our costs and adversely affect our operating results.
Various jurisdictions in which we do business have implemented, or in the future could implement or amend, restrictions on emissions of carbon dioxide or other greenhouse gases, limitations or restrictions on water use, changes from traditional fossil fuel sources to renewables, regulations on energy management and waste management, and other climate change-based rules and regulations, which may increase our costs and adversely affect our operating results.
If environmental laws or regulations or industry standards are either changed or adopted and impose significant operational restrictions and compliance requirements upon us, our suppliers, our customers, or our products, or if our operations are disrupted due to the physical impacts of climate change on us, our suppliers, our customers or our business, our results of operation, financial condition and liquidity could be adversely impacted.
If environmental laws or regulations or industry standards are either changed or adopted and impose significant operational restrictions and compliance requirements upon us, our suppliers, our customers, or our products, or if our operations are disrupted due to the physical impacts of climate change on us, our suppliers, our customers or our business, our results of operations, financial condition and liquidity could be adversely impacted.
The revolving credit facility is collateralized by a first priority perfected security interest in substantially all of our assets. The revolving credit facility provides for borrowings not to exceed $100 million and otherwise restricts us from incurring additional indebtedness outside of the agreement, unless approved by the lenders party to the revolving credit facility.
The revolving credit facility is collateralized by a first priority perfected security interest in substantially all of our assets. The revolving credit facility provides for borrowings not to exceed $100 million and otherwise restricts us from incurring additional indebtedness outside of the agreement, 6 unless approved by the lenders party to the revolving credit facility.
IT systems failures, including risks associated with upgrading our systems or successfully integrating IT and other systems 10 to common platforms, network disruptions and breaches of data security could disrupt our operations by impeding our processing of transactions, our ability to protect customer or company information and our financial reporting.
IT systems failures, including risks associated with upgrading our systems or successfully integrating IT and other systems to common platforms, network disruptions and breaches of data security could disrupt our operations by impeding our processing of transactions, our ability to protect customer or company information and our financial reporting.
Additionally, the price of the Series A warrants may fluctuate, and liquidity may be limited. Holders of Series A warrants may be unable to resell their Series A warrants at a favorable price, or at all. Because the Series A warrants are executory contracts, they may have no value in a bankruptcy or reorganization proceeding.
Additionally, the price of the Series A warrants may fluctuate, and liquidity may be limited. Holders of Series A warrants may be unable to resell their Series A warrants at a favorable price, or at all. 10 Because the Series A warrants are executory contracts, they may have no value in a bankruptcy or reorganization proceeding.
If a third party gained unauthorized access to our data, including any data regarding our employees, customers, or vendors, the security breach could expose us to risks, including loss of business, fines, and litigation.
If a third party gained unauthorized access to our data, including any data regarding our employees, customers, or vendors, the security breach could expose us to risks, including loss of business, fines, 11 and litigation.
Any new credit agreement or other forms of liquidity may result in higher borrowing costs and contain non-investment grade covenants that are less favorable in comparison to our existing revolving credit and equipment financing facility, if available at all.
Any new credit agreement or other forms of liquidity may result in higher borrowing costs and contain non-investment grade covenants that are less favorable in comparison to our existing revolving credit and equipment financing facilities, if available at all.
However, there can be no assurance that unasserted or potential future assessments would not have a material adverse effect on our financial condition, results of operations and liquidity. The United States currently imposes tariffs of 25% on primary steel imports and 10% on primary aluminum imports into the United States.
However, there can be no assurance that unasserted or potential future assessments would not have a material adverse effect on our financial condition, results of operations and liquidity. 7 The United States currently imposes tariffs on primary steel and aluminum imports into the United States.
RISKS RELATED TO OWNERSHIP OF OUR SECURITIES If we fail to maintain an effective system of internal control, we may not be able to accurately determine our financial results or prevent fraud. As a result, our shareholders could lose confidence in our financial results, which could harm the business and the value of our securities.
If we fail to maintain an effective system of internal control, we may not be able to accurately determine our financial results or prevent fraud. As a result, our shareholders could lose confidence in our financial results, which could harm the business and the value of our securities.
Any unexpected, sudden or prolonged price increase may cause a reduction in our profit margins or result in losses where beneficial fixed-priced contracts do not exist, unfavorable fixed-priced contracts cannot be modified or increases cannot be obtained in our selling prices.
Any unexpected, sudden or prolonged increase in the price of these commodities may cause a reduction in our profit margins or result in losses where beneficial fixed-priced contracts do not exist, unfavorable fixed-priced contracts cannot be modified or increases cannot be obtained in our selling prices.
Should we receive a notice of non-compliance, the New York Stock Exchange may allow up to an 18-month cure period if we present a plan to become compliant with adequate strategic actions and progress reporting satisfactory to the New York Stock Exchange.
Should we fall below the continued listing criteria of the New York Stock Exchange and receive a notice of non-compliance, the New York Stock Exchange may allow up to an 18-month cure period if we present a plan to become compliant with adequate strategic actions and progress reporting satisfactory to the New York Stock Exchange.
We may not be able to satisfy the continued listing requirements of the New York Stock Exchange and the NYSE American Exchange for our common stock and Series A warrants, respectively.
RISKS RELATED TO OWNERSHIP OF OUR SECURITIES We may not be able to satisfy the continued listing requirements of the New York Stock Exchange and the NYSE American Exchange for our common stock and Series A warrants, respectively.
One customer accounted for approximately 11% and 10% of the net sales of the FCEP segment for the years ended December 31, 2023 and 2022, respectively. The loss of such customer, or a significant reduction in the orders of such customer, could have a material adverse effect on the segment.
One customer accounted for approximately 11% of the net sales of the FCEP segment in each of the years ended December 31, 2024 and 2023. The loss of such customer, or a significant reduction in the orders of such customer, could have a material adverse effect on the segment.
Our common stock’s average-global market capitalization over the 30 trading-day period ended December 31, 2023 was $52.6 million, and our total Ampco-Pittsburgh shareholders’ equity was $60.9 million as of December 31, 2023.
Our common stock’s average-global market capitalization over the 30-day trading period ended December 31, 2024 was $39.6 million, and our total Ampco-Pittsburgh shareholders’ equity was $58.9 million as of December 31, 2024.
The ultimate net liability with respect to such pending and any unasserted claims is subject to various uncertainties including, but not limited to, the following: • the number and nature of claims in the future; • the costs of defending and settling these claims; • insolvencies among our insurance carriers and the risk of future insolvencies; • the possibility of adverse jury verdicts could require damage payments in amounts greater than the amounts for which we have historically settled claims or have provided for future claims; • possible changes in the litigation environment or federal and state law governing the compensation of asbestos claimants; and • the risk of bankruptcies of other asbestos defendants which may increase our costs.
The ultimate net liability with respect to such pending and any unasserted claims is subject to various uncertainties including, but not limited to, the following: • the number and nature of claims in the future; • the costs of defending and settling these claims; • inability to reach acceptable agreements with insurance carriers currently not a party to a settlement agreement or at a coverage amount less than we have anticipated; • insolvencies among our insurance carriers and the risk of future insolvencies; • the possibility of adverse jury verdicts requiring damage payments in amounts greater than the amounts for which we have historically settled claims or have provided for future claims; • possible changes in the litigation environment or federal and state law governing the compensation of asbestos claimants; and • the risk of bankruptcies of other asbestos defendants which may increase our costs.
Therefore, increases or decreases in the value of the U.S. dollar against other major currencies will affect the translated value for revenue, expenses and balance sheet items denominated in foreign currencies and could materially affect our financial results expressed in U.S. dollars.
Therefore, increases or decreases in the value of the U.S. dollar against other major currencies will affect the translated value for revenue, expenses and balance sheet items denominated in foreign currencies and could materially affect our financial results expressed in U.S. dollars. A change in the existing regulatory environment could negatively affect our operations, financial performance and liquidity.
We believe the estimated costs, net of anticipated insurance recoveries, of our pending and future asbestos legal proceedings should not have a material adverse effect on our financial condition or liquidity.
Through the current year end, our insurance has covered a majority of our settlement and defense costs. We believe the estimated costs, net of anticipated insurance recoveries, of our pending and future asbestos legal proceedings should not have a material adverse effect on our financial condition or liquidity.
Such excess capacity often results in manufacturers in certain countries exporting steel at prices significantly below their home market prices (often due to local government assistance or subsidies).
The global steel manufacturing capacity continues to exceed global consumption of steel products. Such excess capacity often results in manufacturers in certain countries exporting steel at prices significantly below their home market prices (often due to local government assistance or subsidies).
In addition, sales of FEP, specifically open-die forged products for the oil and gas industry and steel distribution markets, are impacted by fluctuations in global energy demand, which also could adversely affect our margins and profitability.
In addition, sales of FEP, specifically open-die forged products for the oil and gas industry and steel distribution markets, are impacted by fluctuations in global energy demand, which also could adversely affect our margins and profitability. 5 Excess global capacity in the steel industry could lower prices for our products, which could adversely affect our sales, margins and profitability, as well as the collectability of our receivables and the salability of our in-process inventory.
We have entered into sale-leaseback transactions, which create the risk of loss if we default. UES and Air & Liquid have entered into sale and leaseback financing transactions with Store Capital Acquisitions, LLC (“STORE”) relating to certain properties utilized by the segments of the Corporation.
We are a party to sale-leaseback financing transactions, which creates the risk of loss if we default. UES and Air & Liquid are parties to sale-leaseback financing transactions with Store Capital Acquisitions, LLC (“STORE”) for certain properties utilized by the segments of the Corporation.
As consumers of steel and aluminum in some of our products, our cost base is exposed to these tariffs and could be exposed to additional tariffs, higher tariffs or similar actions in the future, which could reduce our margins, and we could potentially lose market share to foreign competitors not subject to similar tariff increases.
As consumers of steel and aluminum in some of our products, our cost base is exposed to these tariffs and could be exposed to additional tariffs, higher tariffs or similar actions in the future, which could reduce our margins.
If we are not able to maintain adequate liquidity, we may not be able to meet our operating cash flow requirements, debt service costs, or other financial obligations such as future required contributions to our employee benefit plans. Our revolving credit facility is subject to various affirmative and negative covenants and our equipment financing facility includes various affirmative covenants.
If we are not able to maintain adequate liquidity, we may not be able to meet our operating cash flow requirements, debt service costs, or other financial obligations such as future required contributions to our employee benefit plans.
GENERAL RISK FACTORS Potential attacks on information technology infrastructure and other cyber-based business disruptions could have a material adverse effect on our financial condition, results of operations and liquidity. We depend on integrated IT systems to conduct our business.
The occurrence of any of these events may adversely affect our business, results of operations, financial condition, and cash flows. Potential attacks on information technology infrastructure and other cyber-based business disruptions could have a material adverse effect on our financial condition, results of operations and liquidity. We depend on integrated IT systems to conduct our business.
A significant portion of the FCEP segment’s sales consists of mill rolls to customers in the global steel and aluminum industry that may be periodically impacted by economic or cyclical downturns and other disruptions.
Cyclical demand for products and economic downturns could reduce the demand for, and sales of, our products, which could adversely affect our margins and profitability. A significant portion of the FCEP segment’s sales consists of mill rolls to customers in the global steel and aluminum industries that may be periodically impacted by economic or cyclical downturns and other disruptions.
If we are unable to fund our strategic plans, whether through cash from operations or from the capital markets, we may have to forego opportunities that would otherwise be accretive to our operating results for potentially an extended period. 5 We need to maintain adequate liquidity to meet our operating cash flow requirements, debt service costs and other financial obligations.
If we are unable to fund our strategic plans, whether through cash from operations or from the capital markets, we may have to forego opportunities that would otherwise be accretive to our operating results for potentially an extended period.
Fluctuation in the value of the U.S. dollar relative to other currencies could adversely affect our business, results of operations and financial condition. Certain of our subsidiaries operate in foreign jurisdictions and, accordingly, earn revenues, pay expenses, own assets, and incur liabilities in countries using currencies other than the U.S. dollar.
Certain of our subsidiaries operate in foreign jurisdictions and, accordingly, earn revenues, pay expenses, own assets, and incur liabilities in countries using currencies other than the U.S. dollar.
Shortage of key production materials, while driving up costs, may be of such severity as to disrupt our production, all of which may impact our sales and profitability. Geopolitical factors or wars, including the Russia-Ukraine conflict and the Red Sea crisis, could exacerbate the above risks.
Shortage of key production materials, while driving up costs, may be of such severity as to disrupt our production, all of which may impact our sales and profitability. Geopolitical factors or wars, including the Russia-Ukraine and Middle East conflicts, could exacerbate the above risks. In particular, the Russia-Ukraine conflict has significantly increased the cost of energy for our U.K. operations.
We may be required to expand our facilities or contract with third parties to meet such growth, which we may not be able to do in a timely manner, if at all.
Demand for our products, particularly in our ALP segment, may grow at a pace that exceeds our operational capacity, including our manufacturing capabilities. We may be required to expand our facilities or contract with third parties to meet such growth, which we may not be able to do in a timely manner, if at all.
For the ALP segment, no customers exceeded 10% of its net sales in 2023 or 2022. Pandemics and geopolitical conflicts may cause disruptions to our business and the industries in which we operate. Pandemics and geopolitical conflicts may increase economic and demand uncertainty and could cause a sustained global recession.
Pandemics and geopolitical conflicts may cause disruptions to our business and the industries in which we operate. Pandemics and geopolitical conflicts may increase economic and demand uncertainty and could cause a sustained global recession.
Because of the uncertainties related to such claims, it is possible our ultimate liability could have a material adverse effect on our financial condition, results of operations or liquidity in the future. 7 A change in the existing regulatory environment could negatively affect our operations, financial performance and liquidity.
Because of the uncertainties related to such claims, it is possible our ultimate liability could have a material adverse effect on our financial condition, results of operations or liquidity in the future. We could face limitations in availability of capital to fund our strategic plans.
Failure to comply with material provisions or covenants in these facilities could have a material adverse effect on our liquidity, results of operations and financial condition. We may seek to renegotiate or replace a facility or may determine not to replace a facility at all and, instead, pursue other forms of liquidity.
Failure to extend or replace the revolving credit facility or failure to comply with material provisions or covenants in these facilities could have a material adverse effect on our liquidity, results of operations and financial condition.
In addition, we must sublet or provide replacement property if we close, sell or otherwise exit a property included in the sale and leaseback financing transactions, which may hinder our ability to successfully restructure our operations. Our growth strategy has required substantial capital expenditures, which have been funded by the incurrence of additional debt.
In addition, if we close, sell or otherwise exit a property included in the sale-leaseback financing transactions, we would be required to sublet or provide replacement property, which may hinder our ability to successfully restructure our operations.
If we fail to comply with the covenants contained in our revolving credit facility or our equipment financing facility, it may adversely affect our liquidity, results of operations and financial condition.
RISKS RELATEFD TO OUR BUSINESS AND INDUSTRY We need to maintain adequate liquidity to meet our operating cash flow requirements, debt service costs and other financial obligations. If we fail to comply with the covenants contained in our revolving credit facility or our equipment financing facility, it may adversely affect our liquidity, results of operations and financial condition.
A work stoppage or another industrial action on the part of any of our unions could be disruptive to our operations. Our subsidiaries have several key operations which are subject to multi-year collective bargaining agreements or agreements with works councils with their hourly work forces.
Our subsidiaries have several key operations which are subject to multi-year collective bargaining agreements or agreements with works councils with their hourly work forces.
Certain of our subsidiaries and, in some cases, we, are defendants in numerous claims alleging personal injury from exposure to asbestos-containing components historically used in certain products of these subsidiaries. Through the current year end, our insurance has covered a majority of our settlement and defense costs.
Certain of our subsidiaries and, in some cases, we, are defendants in numerous claims alleging personal injury from exposure to asbestos-containing components historically used in certain products of these subsidiaries. Settlement agreements between the insurance carriers, our subsidiaries and, in some cases, us encompass the majority of insurance policies that provide coverage for claims.
In addition, changes in foreign currency exchange rates may provide foreign roll suppliers with advantages based on those lower foreign currency exchange rates and, therefore, permit them to compete in our home markets. We could face limitations in availability of capital to fund our strategic plans.
In addition, changes in foreign currency exchange rates may provide foreign roll suppliers with advantages based on those lower foreign currency exchange rates and, therefore, permit them to compete in our home markets. We may not be able to scale our operational capacity in line with demand for our products.
Pursuant to such sale and leaseback financing transactions, 6 UES has entered into a master lease with STORE through which it will lease the same properties from STORE and further sublease certain properties to Air & Liquid and/or the Corporation.
In connection with the sale-leaseback financing transactions, UES 8 entered into a master lease with STORE whereby it will lease the same properties from STORE and further sublease certain properties to Air & Liquid and/or the Corporation. The master lease contains certain representations, warranties, covenants, obligations, conditions, indemnification provisions, and termination provisions customary for that type of agreement.
In particular, the Russia-Ukraine conflict has significantly increased the cost of energy for our U.K. operations. As a result, we have moved certain of our cast roll production from the U.K. to Sweden, reducing profitability of our U.K. operations but improving profitability for our Sweden operations.
As a result, we have moved certain of our cast roll production from the U.K. to Sweden, reducing profitability of our U.K. operations but improving profitability for our Sweden operations. Fluctuation in the value of the U.S. dollar relative to other currencies could adversely affect our business, results of operations and financial condition.
Our financial condition, results of operations and liquidity may be affected by these tariffs, or similar actions.
Similarly, we could potentially lose market share to foreign competitors not subject to similar tariffs if our foreign customers sourced product offshore. Our financial condition, results of operations and liquidity may be affected by these tariffs, or similar actions.
Increases in energy and commodity prices, reductions in electricity and natural gas supply or shortages of key production materials could adversely impact our production, which could result in lower profitability or higher losses. Our subsidiaries use certain commodities in the manufacture of their products. These include steel scrap, ferroalloys and energy.
Additionally, repair costs may be significant which, if not sufficiently covered by insurance, may negatively impact our earnings and cash flows. Increases in energy and commodity prices, reductions in electricity and natural gas supply or shortages of key production materials could adversely impact our production, which could result in lower profitability or higher losses.
The impact of a pandemic or a geopolitical conflict also may have the effect of exacerbating many of the other risks described herein. Uncertainty related to environmental regulation and industry standards, as well as the physical risks of climate change, could impact our results of operations and financial position.
For the ALP segment, no customers exceeded 10% of its net sales in 2024 or 2023. Uncertainty related to environmental regulation and industry standards, as well as the physical risks of climate change, could impact our results of operations and financial position.
Removed
RISKS RELATED TO OUR BUSINESS AND INDUSTRY Cyclical demand for products and economic downturns could reduce the demand for, and sales of, our products, which could adversely affect our margins and profitability.
Added
The maturity date for our revolving credit facility is June 29, 2026 and, subject to other terms and conditions of the agreement, would become due on that date. In addition, our revolving credit facility is subject to various affirmative and negative covenants and our equipment financing facility includes various affirmative covenants.
Removed
Excess global capacity in the steel industry could lower prices for our products, which could adversely affect our sales, margins and profitability, as well as the collectability of our receivables and the salability of our in-process inventory. The global steel manufacturing capacity continues to exceed global consumption of steel products.
Added
We may seek to renegotiate or replace a facility or may determine not to replace a facility at all and, instead, pursue other forms of liquidity.
Removed
We may not be able to scale our operational capacity in line with demand for our products. Demand for our products, particularly in our ALP segment, may grow at a pace that exceeds our operational capacity, including our manufacturing capabilities.
Added
Our subsidiaries use certain commodities in the manufacture of their products. These include steel scrap, ferroalloys and energy.
Removed
The lease entered into by UES contains certain representations, warranties, covenants, obligations, conditions, indemnification provisions, and termination provisions customary for that type of agreement.
Added
The impact of a pandemic or a geopolitical conflict also may have the effect of exacerbating many of the other risks described herein. A work stoppage or other industrial action on the part of any of our unions could be disruptive to our operations.
Removed
If we are unable to repay debt service costs, we may be unable to obtain alternative financing on acceptable terms, or at all, and our liquidity, results of operations and financial condition may be adversely affected. To support our growth strategy in the FCEP segment, we have made, and expect to continue to make, significant commitments for capital expenditures.
Added
GENERAL RISK FACTORS Changes in the global economic environment, inflation, elevated interest rates, recessions or prolonged periods of slow economic growth, and global instability and actual and threatened geopolitical conflict, could have an adverse effect on our industry and business, as well as those of our customers and suppliers.
Removed
We expect to continue to fund these capital expenditures with our equipment financing facility. The additional indebtedness will require a portion of our cash flows from operations to be used for the payment of interest and principal, thereby reducing our ability to use our cash flows from operations to fund working capital, other capital expenditures and acquisitions.
Added
Overall economic conditions in the U.S., Europe, the United Kingdom, and elsewhere, including adverse factors such as inflation, rising or sustained elevated interest rates, supply chain disruptions, and geopolitical conflicts including the impacts from the Russia-Ukraine conflict, significantly impact our business.
Removed
Furthermore, raising equity capital generally would dilute existing shareholders. If additional capital is needed, we may not be able to obtain debt or equity financing on terms acceptable to us, or at all.
Added
Periods of economic downturn or continued uncertainty could result in us having difficulty increasing or maintaining our level of sales or profitability and we may experience an adverse effect on our business, results of operations, financial condition, and cash flows.
Added
Our U.S. operations are subject to economic conditions, including credit and capital market conditions, inflation, prevailing interest rates, and political factors which, if changed, could negatively affect our results of operations, cash flows and liquidity.
Added
Political factors include, but are not limited to, changes in administration resulting in increased or newly imposed tariffs, increased regulation such as carbon emissions, limitations on trading including the export of energy and raw materials, trade remedies, and changes to tax laws and regulations resulting in increased income tax liability.
Added
Actions taken by the U.S. government could affect our results of operations, cash flows and liquidity. We are subject to economic conditions and political factors associated with the European Union, the United Kingdom and neighboring countries, and the euro currency.
Added
Changes in any of these economic conditions or political factors could negatively affect our results of operations, cash flows and liquidity. Political factors include, but are not limited to, taxation, nationalization, inflation, government instability, regional conflict, civil unrest, increased regulation and quotas, tariffs, sanctions, and other market-distorting measures.
Added
Continued uncertainty and economic downturn in the European market throughout 2024, as well as the ongoing Russia-Ukraine conflict have had a broad range of adverse impacts on global economic conditions, many of which have had, and are likely to continue to have, adverse impacts on our business and the business of our customers including increased raw material and energy costs, softer customer demand and lower steel prices, which has led, and may lead in the future, to the temporary idling of a portion of our customers’ raw steel capability until the demand environment improves.
Added
These uncertain conditions in the European market could lead to adverse effects on the valuation of our long-lived assets, which could negatively affect our results of operations through potential impairment charges. Additionally, we are also exposed to risks associated with the business success and creditworthiness of our suppliers and customers.
Added
If our customers or suppliers are negatively impacted by a slowdown in economic markets, we may face reduction, delay or cancellation of customer orders; delays or interruptions of the supply of raw materials; and increased risk of insolvency and other credit related issues of customers or suppliers, which could delay payments from customers, result in increased customer defaults and cause our suppliers to delay filling our needs on a timely or cost-effective basis, or at all.

Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeThe Corporation’s information security program is managed by its Data Protection Manager (“DPM”) and its Information Technology Department (collectively, the “IT Team”). The DPM has extensive experience in cyber and global data protection initiatives with the Corporation and reports directly to the Corporation’s Chief Executive Officer.
Biggest changeThe DPM has extensive experience in cyber and global data protection initiatives with the Corporation and reports directly to the Corporation’s Chief Executive Officer. The IT Team is responsible for leading enterprise-wide cybersecurity strategy, policy, standards, architecture, and processes.
The DPM provides periodic reports to the Audit Committee, the Corporation’s Chief Executive Officer, Chief Financial 12 Officer, and other members of senior management at each of the Audit Committee meetings and in the event of a cyber incident deemed material.
The DPM provides periodic reports to the Audit Committee, the Corporation’s Chief Executive Officer, Chief Financial Officer, and other members of senior management at each of the Audit Committee meetings and in the event of a cyber incident deemed material.
Board of Directors Oversight The Audit Committee of the Board of Directors (the “Audit Committee”) oversees and reviews the design and effectiveness of the Corporation’s cybersecurity program and its contingency plans and provides regular reports to the Board of Directors of the Corporation.
Board of Directors ’ Oversight The Audit Committee of the Board of Directors (the “Audit Committee”) oversees and reviews the design and effectiveness of the Corporation’s cybersecurity program and its contingency plans and provides regular reports to the Board of Directors of the Corporation.
These reports include updates on the Corporation’s cyber risks and threats, the status of projects to strengthen its information security systems, assessments of the information security program, and the emerging threat landscape.
These reports include updates on the Corporation’s cyber risks and threats, the status of projects to strengthen its information security systems, assessments of the information security program, and the emerging threat landscape. 13
Engage Third Parties As part of the Corporation’s cybersecurity risk management process, the Corporation engages a range of third parties, including consultants and advisors, to assist with security assessments and operations, employee training and awareness, compliance, penetration testing, network and endpoint monitoring, threat intelligence, and the Corporation’s vulnerability management platform.
Engage Third Parties As part of the Corporation’s cybersecurity risk management process, the Corporation engages a range of third parties, including consultants, advisors and software providers, to assist with security assessments and operations, employee training and awareness, compliance, penetration testing, network and endpoint monitoring, threat intelligence, and the Corporation’s vulnerability management platform.
CYBERSECURITY Risk Management The Corporation’s risk management program includes focused efforts to identify, assess and manage cybersecurity risks including, but not limited to, the following: • Developing and maintaining a standardized Written Information Security Policy (“WISP”), which provides specific provisions pertaining to employee training, network security, data security, and confidential information for use and adherence by all pertinent operating entities of the Corporation; • Developing and maintaining an Incident Response Plan (“IRP”), which provides specific directives in the event of a cyber-attack including identifying the attack, containing and eradicating the cyber-threat, avoiding and minimizing damages, reducing recovering time, and mitigating future cybersecurity risks; • Aligning the Corporation’s risk management program, as outlined in the WISP and the IRP, with the National Institute of Standards and Technology Cybersecurity Framework to prevent, detect and respond to cyber-attacks; • Requiring all employees with access to the Corporation’s networks to participate in regular and mandatory training on how to be aware of, and help defend against, cybersecurity risks, combined with periodic testing to measure the efficacy of the training efforts; 11 • Testing vulnerability of the Corporation’s key systems to cybersecurity risks, including targeted penetration testing, tabletop incident response exercises, periodic audits by outside industry experts, and regular vulnerability scanning; • Maintaining adequate business continuity plans and critical recovery backup systems; • Engaging external cybersecurity experts in incident response development and management; and • Maintaining adequate cyber insurance for damages caused by a cyber-attack.
CYBERSECURITY Risk Management The Corporation’s risk management program includes focused efforts to identify, assess and manage cybersecurity risks including, but not limited to, the following: • Developing and maintaining a standardized Written Information Security Policy (“WISP”), which provides specific provisions pertaining to employee training, network security, data security, and confidential information for use and adherence by all pertinent operating entities of the Corporation; • Developing and maintaining an Incident Response Plan (“IRP”), which provides specific directives in the event of a cyber-attack including identifying the attack, containing and eradicating the cyber-threat, avoiding and minimizing damages, reducing recovering time, and mitigating future cybersecurity risks; • Aligning the Corporation’s risk management program, as outlined in the WISP and the IRP, with the National Institute of Standards and Technology Cybersecurity Framework to prevent, detect and respond to cyber-attacks; • Requiring all employees with access to the Corporation’s networks to participate in regular and mandatory training on how to be aware of, and help defend against, cybersecurity risks, combined with periodic testing to measure the efficacy of the training efforts; • Testing vulnerability of the Corporation’s key systems to cybersecurity risks, including targeted penetration testing, tabletop incident response exercises, periodic audits by outside industry experts, and regular vulnerability scanning; • Maintaining adequate business continuity plans and critical recovery backup systems; • Engaging external cybersecurity experts in incident response development and management; and • Maintaining adequate cyber insurance for damages caused by a cyber-attack. 12 The Corporation’s information security program is managed by its Data Protection Manager (“DPM”) and its Information Technology Department (collectively, the “IT Team”).
However, a failure of the Corporation’s information systems or a cybersecurity breach could materially and adversely affect its business, results of operations and financial condition. See additional information provided under Item 1A, Risk Factors . The Corporation manages its cybersecurity risk by limiting its threat landscape.
However, a failure of the Corporation’s information systems or a cybersecurity breach could materially and adversely affect its business, results of operations and financial condition. The Corporation manages its cybersecurity risk by limiting its threat landscape.
It includes certain of the Corporation’s senior managers with cross-functional representation from operations, finance/accounting, information technology, risk management and human resources.
In addition, the Corporation has established a Cybersecurity Materiality Assessment Team (“CMAT”) for the purpose of evaluating specific cyber incidents or a series of related incidents. It includes certain of the Corporation’s senior managers with cross-functional representation from operations, finance/accounting, information technology, risk management and human resources.
Removed
The IT Team is responsible for leading enterprise-wide cybersecurity strategy, policy, standards, architecture, and processes. In addition, the Corporation has established a Cybersecurity Materiality Assessment Team (“CMAT”) for the purpose of evaluating specific cyber incidents or a series of related incidents.

Item 2. Properties

Properties — owned and leased real estate

5 edited+0 added−0 removed5 unchanged
Biggest changeThe cast roll facilities of the FCEP segment operated within 70% to 80% of normal operating capacity during 2023, primarily due to soft European demand. The facilities of the ALP segment operated within 70% to 80% of their normal capacity.
Biggest changeThe cast roll facilities of the FCEP segment operated within approximately 65% to 75% of normal operating capacity during 2024, primarily due to soft European demand. The facilities of the ALP segment operated within approximately 75% to 85% of their normal capacity.
Tonawanda, NY 14120* Manufacturing facilities and offices 94,000 on 9 acres Metal, brick and cement block * Facility is leased. Most of the Corporation’s domestic real property locations are subject to sale and leaseback financing transactions with STORE, including its manufacturing facilities. See Note 9 , Debt , to the Consolidated Financial Statements. UES subleases office space to the Corporation.
Tonawanda, NY 14120* Manufacturing facilities and offices 94,000 on 9 acres Metal, brick and cement block * Facility is leased. Most of the Corporation’s domestic real property locations are subject to sale-leaseback financing transactions with STORE, including its manufacturing facilities. See Note 9 , Debt , to the Consolidated Financial Statements. UES subleases office space to the Corporation.
No. 2 Jian Cao Ping Taiyuan, Shanxi, China Manufacturing facilities and offices 338,000 on 14.6 acres Metal, steel and brick Alloys Unlimited and Processing, LLC 3760 Oakwood Avenue Austintown, OH 44515* Manufacturing facilities and offices 69,800 on 1.5 acres Steel framed and cement block 13 Company and Location Principal Use Approximate Square Footage Type of Construction AIR AND LIQUID PROCESSING SEGMENT Air & Liquid Systems Corporation Aerofin Division 4621 Murray Place Lynchburg, VA 24506* Manufacturing facilities and offices 146,000 on 15.3 acres Brick, concrete and steel Buffalo Air Handling Division 467 Zane Snead Drive Amherst, VA 24531* Manufacturing facilities and offices 89,000 on 19.5 acres Metal and steel 4201 Murray Place Lynchburg, VA 24501* Manufacturing facilities and offices 69,700 on 8.6 acres Metal and cement block Buffalo Pumps Division 874 Oliver Street N.
No. 2 Jian Cao Ping Taiyuan, Shanxi, China Manufacturing facilities and offices 338,000 on 14.6 acres Metal, steel and brick Alloys Unlimited and Processing, LLC 3760 Oakwood Avenue Austintown, OH 44515* Manufacturing facilities and offices 69,800 on 1.5 acres Steel framed and cement block 14 Company and Location Principal Use Approximate Square Footage Type of Construction AIR AND LIQUID PROCESSING SEGMENT Air & Liquid Systems Corporation Aerofin Division 4621 Murray Place Lynchburg, VA 24506* Manufacturing facilities and offices 146,000 on 15.3 acres Brick, concrete and steel Buffalo Air Handling Division 467 Zane Snead Drive Amherst, VA 24531* Manufacturing facilities and offices 89,000 on 19.5 acres Metal and steel 4201 Murray Place Lynchburg, VA 24501* Manufacturing facilities and offices 69,700 on 8.6 acres Metal and cement block Buffalo Pumps Division 874 Oliver Street N.
ITEM 2. PR OPERTIES The location and general character of the principal locations in each segment are included in the below summary. All domestic locations are leased and foreign locations are owned, unless otherwise noted. In addition, the Corporation has sales offices located in several foreign countries.
ITEM 2. PR OPERTIES The location and general character of the principal locations in each segment are included in the below summary. Domestic locations are leased and foreign locations are owned, unless otherwise noted. In addition, the Corporation has sales offices located in several foreign countries.
The Corporation further subleases a portion of its office space to Air & Liquid for use as its headquarters. The Corporation believes all of the owned facilities are adequate and suitable for their respective purposes. The forge roll facilities of the FCEP segment operated within 75% to 85% of their normal capacity during 2023.
The Corporation further subleases a portion of its office space to Air & Liquid for use as its headquarters. The Corporation believes all of the owned facilities are adequate and suitable for their respective purposes. The forged roll facilities of the FCEP segment operated within approximately 80% to 90% of their normal capacity during 2024.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

3 edited+0 added−0 removed2 unchanged
Biggest changeAir & Liquid and, in some cases, the Corporation, are defendants (among a number of defendants, often in excess of 50) in cases filed in various state and federal courts. See Note 20 , Litigation , to the Consolidated Financial Statements. The Corporation believes appropriate reserves have been established.
Biggest changeAir & Liquid and, in some cases, the Corporation, are defendants (among a number of defendants, often in excess of 50) in cases filed in various state and federal courts. The Corporation believes appropriate reserves have been established. See Note 19 , Litigation , to the Consolidated Financial Statements.
Environmental exposures are difficult to assess and estimate for numerous reasons, including lack of reliable data, the multiplicity of possible solutions, the years of remedial and monitoring activity required, and identification of new sites. The Corporation believes appropriate reserves have been established. See Note 22 , Environmental Matters , to the Consolidated Financial Statements. ITEM 4.
Environmental exposures are difficult to assess and estimate for numerous reasons, including lack of reliable data, the multiplicity of possible solutions, the years of remedial and monitoring activity required, and identification of new sites. The Corporation believes appropriate reserves have been established. See Note 21 , Environmental Matters , to the Consolidated Financial Statements. ITEM 4.
MINE SAFE TY DISCLOSURES Not applicable. 14 – PART II –
MINE SAFE TY DISCLOSURES Not applicable. 15 – PART II –

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

2 edited+0 added−0 removed1 unchanged
Biggest changeThe number of registered shareholders at December 31, 2023 and 2022 equaled 348 and 356, respectively. The number of registered warrant holders at each of December 31, 2023 and 2022 equaled 21. ITE M 6. RESERVED
Biggest changeThe number of registered shareholders at December 31, 2024 and 2023 equaled 345 and 348, respectively. The number of registered warrant holders at each of December 31, 2024 and 2023 equaled 21. ITE M 6. RESERVED
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOC KHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES The shares of common stock of Ampco-Pittsburgh Corporation are traded on the New York Stock Exchange (symbol AP). The Corporation paid cash dividends on common shares in every year since 1965 through mid-2017.
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOC KHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES The shares of common stock of Ampco-Pittsburgh Corporation are traded on the New York Stock Exchange (symbol AP). The Corporation paid cash dividends on common shares in every year from 1965 through mid-2017.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

66 edited+28 added−28 removed40 unchanged
Biggest changeOperating income increased by $7,136 in 2023 when compared to 2022 primarily as a result of: • Improved pricing, net of lower variable-index surcharges and fluctuations in manufacturing costs, which increased operating income by approximately $6,100; • A better product mix of sales, net of a lower volume of shipments, which improved operating income in 2023 when compared to 2022 by approximately $2,300; • Net benefit resulting from the Foreign Energy Credit in 2023 versus the Refund of Excess COVID-19 Subsidies and the Change in Employee Benefit Policy in 2022, which improved operating income in 2023 when compared to 2022 by approximately $1,800; • Lower losses on the disposal of property, plant and equipment associated with equipment being replaced in connection with the segment’s strategic capital expenditure program of approximately $800; offset by • Lower absorption resulting from the temporary and periodic idling of certain equipment to align production with customer demand, which reduced operating income in 2023 when compared to 2022 by approximately $2,900; and • Higher selling and administrative expenses, principally due to changes in employee-related costs and the prior year including a portion of the Change in Employee Benefit Policy, which decreased operating income in 2023 when compared to 2022 by approximately $1,000.
Biggest changeOperating income increased by $2,914 in 2024 when compared to 2023 primarily as a result of: • Improved pricing, net of lower variable-index surcharges and fluctuations in manufacturing costs, which increased operating income by approximately $10,300; • Operational efficiencies and better absorption resulting from the new equipment at the U.S. forged roll facilities, which was partially offset by unabsorbed costs, repairs and maintenance and the insurance deductible associated with a first quarter fire at one of the Corporation’s cast roll facilities and equipment failure at another cast roll facility, resulting in a net increase to operating income in 2024 when compared to 2023 of approximately $3,000; offset by • A lower volume of shipments, which decreased operating income in 2024 when compared to 2023 by approximately $7,700; • Higher selling and administrative expenses, principally due to changes in employee-related costs, which decreased operating income in 2024 when compared to 2023 by approximately $800; and • Foreign Energy Credit of $1,874 received in the prior year.
Adjusted income (loss) from operations is not prepared in accordance with GAAP and should not be considered in isolation of, or as an alternative to, measures prepared in accordance with GAAP. There are limitations related to the use of adjusted income (loss) from operations rather than (loss) income from operations, which is the nearest GAAP equivalent.
Adjusted income from operations is not prepared in accordance with GAAP and should not be considered in isolation of, or as an alternative to, measures prepared in accordance with GAAP. There are limitations related to the use of adjusted income from operations rather than income (loss) from operations, which is the nearest GAAP equivalent.
If the Corporation determined it would not be able to realize all or part of the deferred income tax assets in the future, an adjustment to the valuation allowance would be established resulting in a charge to net (loss) income.
If the Corporation determined it would not be able to realize all or part of the deferred income tax assets in the future, an adjustment to the valuation allowance would be established resulting in a charge to net income (loss).
Likewise, if the Corporation determined it would be able to realize deferred income tax assets in excess of the net amount recorded, a portion of the existing valuation allowance would be released resulting in a credit to net (loss) income.
Likewise, if the Corporation determined it would be able to realize deferred income tax assets in excess of the net amount recorded, a portion of the existing valuation allowance would be released resulting in a credit to net income (loss).
Since these benefits will be paid over many years, the expected long-term rate of return is reflective of current investment returns and investment returns over a longer period. Consideration is also given to target and actual asset allocations, inflation and real risk-free return.
Since these benefits will be paid 24 over many years, the expected long-term rate of return is reflective of current investment returns and investment returns over a longer period. Consideration is also given to target and actual asset allocations, inflation and real risk-free return.
The Corporation has presented non-GAAP adjusted income (loss) from operations because it is a key measure used by the Corporation’s management and Board of Directors to understand and evaluate the Corporation’s operating performance and to develop operational goals for managing its business.
The Corporation has presented non-GAAP adjusted income from operations because it is a key measure used by the Corporation’s management and Board of Directors to understand and evaluate the Corporation’s operating performance and to develop operational goals for managing its business.
The Corporation believes this non-GAAP financial measure helps identify underlying trends in its business that otherwise could be masked by the effect of the items it excludes from adjusted income (loss) from operations.
The Corporation believes this non-GAAP financial measure helps identify underlying trends in its business that otherwise could be masked by the effect of the items it excludes from adjusted income from operations.
The Corporation’s tax filings are subject to audits by tax authorities in the various jurisdictions in which it does business. These audits may result in assessments of additional taxes. At December 31, 2023, based on information known to date, the Corporation believes there are no pending or outstanding assessments whose resolution would require recognition in its consolidated financial statements.
The Corporation’s tax filings are subject to audits by tax authorities in the various jurisdictions in which it does business. These audits may result in assessments of additional taxes. At December 31, 2024, based on information known to date, the Corporation believes there are no pending or outstanding assessments whose resolution would require recognition in its consolidated financial statements.
For the ALP segment, businesses are benefiting from steady demand and increased market share but are facing increasing production costs and supply chain issues as a result of the lingering effects from a post-pandemic environment. The segment has been implementing price increases for certain of its products to help mitigate these inflationary effects.
For the ALP segment, businesses are benefiting from steady demand and increased market share but are facing increasing production costs due to inflation and supply chain issues as a result of the lingering effects from a post-pandemic environment. The segment has been implementing price increases for certain of its products to help mitigate these inflationary effects.
The Corporation has long-term labor agreements at each of the key locations. Certain of these agreements will expire in 2024. As is consistent with past practice, the Corporation will negotiate with the intent to secure mutually beneficial arrangements covering multiple years.
The Corporation has long-term labor agreements at each of the key locations. Certain of these agreements will expire in 2025. As is consistent with past practice, the Corporation will negotiate with the intent to secure mutually beneficial arrangements covering multiple years.
Key variables in these assumptions, including the ability to reasonably estimate the Asbestos Liability through the expected final date by which the Corporation expects to have settled all asbestos-related claims, are summarized in Note 20 , Litigation , to the Consolidated Financial Statements.
Key variables in these assumptions, including the ability to reasonably estimate the Asbestos Liability through the expected final date by which the Corporation expects to have settled all asbestos-related claims, are summarized in Note 19 , Litigation , to the Consolidated Financial Statements.
As of December 31, 2023, based on information known to date, the Corporation believes the amount of unrecognized tax benefits for tax positions taken or expected to be taken in a tax return, which may be challenged by the tax authorities, not to be significant.
As of December 31, 2024, based on information known to date, the Corporation believes the amount of unrecognized tax benefits for tax positions taken or expected to be taken in a tax return, which may be challenged by the tax authorities, not to be significant.
For the FCEP segment, approximately 80% of customer orders include a commodity, energy and transportation surcharge. The ability to pass on future increases in the price of commodities for the balance of the customer orders will be negotiated on a contract-by-contract basis.
For the FCEP segment, approximately 70% of customer orders include a commodity, energy and transportation surcharge. The ability to pass on future increases in the price of commodities for the balance of the customer orders will be negotiated on a contract-by-contract basis.
For the FCEP segment, gross margin, excluding depreciation and amortization, improved when compared to the prior year, primarily as a result of higher pricing. For the ALP segment, gross margin, excluding depreciation and amortization, declined when compared to the prior year, primarily as a result of higher costs and an unfavorable product mix.
For the FCEP segment, gross margin, excluding depreciation and amortization, improved when compared to the prior year, primarily as a result of higher pricing. For the ALP segment, gross margin, excluding depreciation and amortization, declined slightly when compared to the prior year, primarily as a result of an unfavorable product mix.
The maturity date for the revolving credit facility is June 29, 2026 and, subject to the other terms and conditions of the revolving credit agreement, will become due on that date. In addition, the Corporation has Industrial Revenue Bonds (“IRB”) which begin to become due in 2027.
The maturity date for the revolving credit facility is June 29, 2026 and, subject to the other terms and conditions of the revolving credit agreement, will become due on that date. In addition, the Corporation has Industrial Revenue Bonds (“IRBs”) which begin to become due late 2027.
The ALP segment includes Aerofin, Buffalo Air Handling and Buffalo Pumps, all divisions of Air & Liquid Systems Corporation (“Air & Liquid”), a wholly owned subsidiary of the Corporation. Aerofin produces custom-engineered finned tube heat exchange coils and related heat transfer products for a variety of industries including OEM/commercial, nuclear power generation and industrial manufacturing.
The ALP segment includes Aerofin, Buffalo Air Handling and Buffalo Pumps, all divisions of Air & Liquid Systems Corporation (“Air & Liquid”), a wholly owned subsidiary of the Corporation. Aerofin produces custom-engineered finned tube heat exchange coils and related heat transfer products for a variety of industries including original equipment manufacturers and commercial, nuclear power generation and industrial manufacturing.
The exact timing and the amount of the valuation allowance released are subject to, among many items, the level of profitability achieved by the Swedish operations. Once the valuation allowance is completely reversed, a tax provision would be recognized on future earnings.
The exact timing and the amount of the valuation allowance released are subject to, among many items, the level of profitability achieved. Once the valuation allowance is completely reversed, a tax provision would be recognized on future earnings.
OFF-BALANCE SHEET ARRANGEMENTS The Corporation’s off-balance sheet arrangements include the previously mentioned expected future capital expenditures and letters of credit unrelated to the Industrial Revenue Bonds. See Note 12 , Commitments and Contingent Liabilities , to the Consolidated Financial Statements. These arrangements are not considered significant to the liquidity, capital resources, market risk, or credit risk of the Corporation.
OFF-BALANCE SHEET ARRANGEMENTS The Corporation’s off-balance sheet arrangements include the previously mentioned expected future capital expenditures and letters of credit unrelated to the IRBs. See Note 12 , Commitments and Contingent Liabilities , to the Consolidated Financial Statements. These arrangements are not considered significant to the liquidity, capital resources, market risk, or credit risk of the Corporation.
Changes in exchange rates did not have a significant impact on operating income for 2023 when compared to 2022.
Changes in exchange rates did not have a significant impact on operating income for 2024 when compared to 2023.
Included in loss from operations for 2023 is a: • Net charge of $40,887 associated with the increase in the estimated costs of pending and future asbestos claims net of additional insurance recoveries and a reduction in the estimated defense-to-indemnity cost ratio from 65% to 60% (the “Asbestos-Related Charge”); • Credit of $191 for proceeds received from an insolvent asbestos-related insurance carrier (the “Asbestos-Related Proceeds”); and • Credit of $1,874 for the reimbursement of past energy costs at one of the Corporation’s foreign operations by its local government (the “Foreign Energy Credit”).
By comparison, included in loss from operations for 2023 is a: • Net charge of $40,887 associated with the increase in the estimated costs of pending and future asbestos claims net of additional insurance recoveries and a reduction in the estimated defense-to-indemnity cost ratio from 65% to 60% (the “Asbestos-Related Charge”); • Credit of $191 for proceeds received from an insolvent asbestos-related insurance carrier (the “Asbestos-Related Proceeds”); and • Credit of $1,874 for the reimbursement of past energy costs at one of the Corporation’s foreign operations by its local government (the “Foreign Energy Credit”). 17 A discussion of income (loss) from operations for the Corporation’s two segments is included below.
Cash held by the Corporation’s foreign operations is considered to be permanently re-invested; accordingly, a provision for estimated local and withholding tax has not been made. If the Corporation were to remit any foreign earnings to it or any of its U.S. entities, the estimated tax impact would be insignificant.
Cash held by the Corporation’s foreign operations is considered to be 23 permanently re-invested; accordingly, a provision for estimated local and withholding tax has not been made. If the Corporation was to remit any foreign earnings to it or any of its U.S. entities, the estimated tax impact is expected to be insignificant.
See Note 21 , Income Taxes , to the Consolidated Financial Statements. RECENTLY IMPLEMENTED AND ISSUED ACCOUNTING PRONOUNCEMENTS See Note 1 , Summary of Significant Accounting Policies , to the Consolidated Financial Statements. ITEM 7A. QUANTITATIVE AND QUALITAT IVE DISCLOSURES ABOUT MARKET RISK Not applicable. 25
See Note 20 , Income Taxes , to the Consolidated Financial Statements. RECENTLY IMPLEMENTED AND ISSUED ACCOUNTING PRONOUNCEMENTS See Note 1 , Summary of Significant Accounting Policies , to the Consolidated Financial Statements. ITEM 7A. QUANTITATIVE AND QUALITAT IVE DISCLOSURES ABOUT MARKET RISK Not applicable. 26
High-quality fixed-income investments are defined as those investments which have received one of the two highest ratings given by a recognized rating agency with maturities of 10+ years. A 1/4 percentage point increase in the discount rate would decrease projected and accumulated benefit obligations by approximately $5,900.
High-quality fixed-income investments are defined as those investments which have received one of the two highest ratings given by a recognized rating agency with maturities of 10+ years. A 25 basis point increase in the discount rate would decrease projected and accumulated benefit obligations by approximately $5,000.
Along with principal payments, the Corporation will be required to make regular interest payments, the amount of which will vary as the underlying benchmark rates changes. See Note 9 , Debt , to the Consolidated Financial Statements for further information.
Along with principal payments, the Corporation will be required to make regular interest payments, the amount of which will vary as the underlying benchmark rates change. See Note 9 , Debt , to the Consolidated Financial Statements.
The amount of asbestos-related payments and corresponding insurance recoveries is difficult to predict and can vary based on a number of factors, including changes in assumptions, as outlined in Note 20 , Litigation , to the Consolidated Financial Statements. Contributions to the defined benefit pension and other postretirement benefits plans equaled $2,034 and $2,199 in 2023 and 2022, respectively.
The amount of asbestos-related payments and corresponding insurance recoveries is difficult to predict and can vary based on a number of factors, including changes in assumptions, as outlined in Note 19 , Litigation , to the Consolidated Financial Statements. Contributions to the defined benefit pension and other postretirement benefit plans equaled $6,978 and $2,034 in 2024 and 2023, respectively.
Given such measures are forward looking, the Company cannot ensure it would be successful in achieving such enhancements or be able to improve its liquidity. With respect to litigation, see Note 20 , Litigation , to the Consolidated Financial Statements. With respect to environmental matters, see Note 22 , Environmental Matters , to the Consolidated Financial Statements.
Given such measures are forward looking, the Corporation cannot ensure it would be successful in achieving such enhancements or be able to improve its liquidity. With respect to litigation, see Note 19 , Litigation , to the Consolidated Financial Statements. With respect to environmental matters, see Note 21 , Environmental Matters , to the Consolidated Financial Statements.
Conversely, a 1/4 percentage point decrease in the discount rate would increase projected and accumulated benefit obligations by approximately $5,900. The Corporation believes that the amounts recorded in the accompanying consolidated financial statements related to pension and other postretirement benefits are based on assumptions that are appropriate at December 31, 2023, although actual outcomes could differ.
Conversely, a 25 basis point decrease in the discount rate would increase projected and accumulated benefit obligations by approximately $5,000. The Corporation believes that the amounts recorded in the accompanying consolidated financial statements related to pension and other postretirement benefits are based on assumptions that are appropriate at December 31, 2024, although actual outcomes could differ.
The Corporation believes the expected long-term rate of return of 7.70% for its domestic plans and 4.60% for its foreign plans to be reasonable.
The Corporation believes the expected long-term rate of return of 7.40% for its domestic plans and 4.65% for its foreign plans to be reasonable.
Although the Corporation recorded the Asbestos-Related Charge (Credit) in 2023 and 2022, these were non-cash charges (credits) and, accordingly, did not impact net cash flows used in operating activities. Instead, net asbestos-related payments equaled $10,592 and $9,126 in 2023 and 2022, respectively, and are expected to approximate $9,000 in 2024. Asbestos-related payments are expected to continue in the foreseeable future.
Although the Corporation recorded the Asbestos-Related (Credit) Charge in 2024 and 2023, these were non-cash (credits) charges and, accordingly, did not impact net cash flows used in operating activities. Instead, net asbestos-related payments equaled $6,536 and $10,592 in 2024 and 2023, respectively, and are expected to approximate $9,000 in 2025.
Funds on hand, funds generated from future operations and availability under the Corporation’s revolving credit facility are expected to be sufficient to finance the Corporation’s operational requirements and debt service costs. As of December 31, 2023, remaining availability under the revolving credit facility approximated $25,084, net of standard availability reserves.
Funds on hand, funds generated from future operations and availability under the Corporation’s revolving credit facility are expected to be sufficient to finance the Corporation’s operational requirements, debt service costs and capital expenditures. As of December 31, 2024, remaining availability under the revolving credit facility approximated $20,562, net of standard availability reserves.
The effect of exchange rate changes on cash and cash equivalents is primarily attributable to the fluctuation of the British pound and Swedish krona against the U.S. dollar. As a result of the above, cash and cash equivalents decreased by $1,449 during 2023 and ended the period at $7,286 in comparison to $8,735 at December 31, 2022.
The effect of exchange rate changes on cash and cash equivalents is primarily attributable to the fluctuation of the British pound and Swedish krona against the U.S. dollar. As a result of the above, cash and cash equivalents increased by $8,141 during 2024 and ended the period at $15,427 in comparison to $7,286 at December 31, 2023.
As of December 31, 2023, the Corporation’s U.K. operations entered into a three-year cumulative loss position resulting in a valuation allowance to be established against the net deferred income tax assets of the U.K. operations and additional income tax expense of $316.
As of December 31, 2023, the Corporation’s U.K. operations entered into a three-year cumulative loss position moving the U.K. operations from a net deferred income tax liability position to a net deferred income tax asset position and resulting in recognition of a valuation allowance against the net deferred income tax assets of $316.
Given the Corporation’s current earnings and anticipated future earnings in Sweden, the Corporation believes there is a reasonable possibility within the next 12 months, sufficient positive evidence may become available to allow the Corporation to conclude some portion of the valuation allowance will no longer be needed.
Given the Corporation’s anticipated future earnings from operations in Sweden, due in part to the movement of cast roll production from the U.K. to Sweden, the Corporation believes there is a reasonable possibility within the next 12 months, sufficient positive evidence may become available to allow the Corporation to conclude some portion of the valuation allowance will no longer be needed.
In particular, the Corporation believes the exclusion of the Asbestos-Related Charge (Credit), the Asbestos-Related Proceeds, the Foreign Energy Credit, the Change in Employee Benefit Policy, and the Refund of Excess COVID-19 Subsidies can provide a useful measure for period-to-period comparisons of the Corporation’s core business performance.
In particular, the Corporation believes the exclusion of the Asbestos-Related (Credit) Charge, the Asbestos-Related Proceeds and the Foreign Energy Credit can provide a useful measure for period-to-period comparisons of the Corporation’s core business performance.
Net (loss) income attributable to Ampco-Pittsburgh was approximately $(39,928) or $(2.04) per common share for 2023 and $3,416 or $0.18 per common share for 2022.
Net income (loss) attributable to Ampco-Pittsburgh was approximately $438 or $0.02 per common share for 2024 and $(39,928) or $(2.04) per common share for 2023.
Future principal payments, assuming the revolving credit facility and other debt instruments become due on their respective maturity dates and the IRBs are called in 2024, are $12,271 for 2024, $2,784 for 2025, $59,067 for 2026, $3,334 for 2027, and $3,485 for 2028.
Future principal payments, assuming the revolving credit facility and other debt instruments become due on their respective maturity dates and the IRBs are called in 2025, are $12,186 for 2025, $59,277 for 2026, $3,564 for 2027, $3,725 for 2028, and $3,993 for 2029.
Net loss attributable to Ampco-Pittsburgh and net loss per common share attributable to Ampco-Pittsburgh for 2023 include a net after-tax charge of $38,011 or $1.94 per common share associated with the Asbestos-Related Charge, the Asbestos-Related Proceeds, the Foreign Energy Credit, the increase in the valuation allowance for the Corporation’s U.K. operations of $316, and additional tax of $203 resulting from the revaluation of the deferred income tax assets of the ALP segment following new legislation enacted in 2022, which will gradually reduce the Pennsylvania state income tax rate from 9.99% in 2022 to 4.99% in 2031.
Net loss attributable to Ampco-Pittsburgh and net loss per common share attributable to Ampco-Pittsburgh for 2023 include a net after-tax charge of $38,011 or $1.94 per common share associated with the Asbestos-Related Charge, the Asbestos-Related Proceeds, the Foreign Energy Credit, the increase in the valuation allowance for the Corporation’s U.K. operations of $316, and additional tax of $203 resulting from the revaluation of the deferred income tax assets of the ALP segment following new legislation enacted in 2022. 19 Non-GAAP Financial Measures The Corporation presents non-GAAP adjusted income from operations, which is calculated as income (loss) from operations excluding the Asbestos-Related (Credit) Charge, the Asbestos-Related Proceeds and the Foreign Energy Credit, for each of the years, as applicable.
The Corporation will maintain the valuation allowances until there is sufficient evidence to support the reversal of all or some portion of the valuation allowances.
Valuation allowances are recorded against the majority of the Corporation’s deferred income tax assets. The Corporation will maintain the valuation allowances until there is sufficient evidence to support the reversal of all or some portion of the valuation allowances.
The following is a reconciliation of (loss) income from operations to non-GAAP adjusted income (loss) from operations for 2023 and 2022, respectively: 2023 2022 (Loss) income from operations, as reported (GAAP) $ (34,574 ) $ 2,778 Asbestos-Related Charge (Credit) (1) 40,887 (2,226 ) Asbestos-Related Proceeds (2) (191 ) - Foreign Energy Credit (3) (1,874 ) - Change in Employee Benefit Policy (4) - (1,431 ) Refund of Excess COVID-19 Subsidies (5) - 664 Income (loss) from operations, as adjusted (Non-GAAP) $ 4,248 $ (215 ) (1) For 2023, represents an increase in the estimated settlement costs of pending and future asbestos claims, net of additional insurance recoveries and a reduction in the estimated defense-to-indemnity cost ratio from 65% to 60%.
The following is a reconciliation of income (loss) from operations to non-GAAP adjusted income from operations for 2024 and 2023, respectively: 2024 2023 Income (loss) from operations, as reported (GAAP) $ 12,169 $ (34,574 ) Asbestos-Related (Credit) Charge (1) (4,101 ) 40,887 Asbestos-Related Proceeds (2) (83 ) (191 ) Foreign Energy Credit (3) — (1,874 ) Income from operations, as adjusted (Non-GAAP) $ 7,985 $ 4,248 (1) For 2024, represents a decrease in the estimated settlement costs of pending and future asbestos claims, net of additional insurance recoveries, and a benefit from the reduction in the estimated defense-to-indemnity cost ratio from 60% to 55%.
The income tax benefit (provision) includes expense of $203 and $165 for 2023 and 2022, respectively, resulting from the revaluation of the deferred income tax assets of the ALP segment following new legislation enacted in 2022, which will gradually decrease the Pennsylvania state income tax rate from 9.99% in 2022 to 4.99% in 2031.
The income tax provision for 2024 also includes approximately $153 of state income tax expense associated with the Asbestos-Related Credit whereas the income tax benefit for 2023 includes approximately $1,330 of state income tax benefit associated with the Asbestos-Related Charge offset by income tax expense of $203, resulting from the revaluation of state deferred income tax assets of the ALP segment following new legislation enacted in 2022, which will gradually decrease the Pennsylvania state income tax rate to 4.99% by 2031.
As of December 31, 2023, the valuation allowance approximates $41,041, reducing deferred income tax assets to $3,160, an amount the Corporation believes is “more likely than not” to be realized. 24 The Corporation does not recognize a tax benefit in the consolidated financial statements related to a tax position taken or expected to be taken in a tax return unless it is “more likely than not” the tax authorities will sustain the tax position solely on the basis of the position’s technical merits.
The Corporation does not recognize a tax benefit in the consolidated financial statements related to a tax position taken or expected to be taken in a tax return unless it is “more likely than not” the tax authorities will sustain the tax position solely on the basis of the 25 position’s technical merits.
For 2022, represents a benefit from the reduction in the estimated defense-to-indemnity cost ratio from 70% to 65%. See Note 20 , Litigation, to the Consolidated Financial Statements for further information. (2) Represents proceeds received from an insolvent asbestos-related insurance carrier.
For 2023, represents an increase in the estimated settlement costs of pending and future asbestos claims, net of additional insurance recoveries, and a reduction in the estimated defense-to-indemnity cost ratio from 65% to 60%. See Note 19 , Litigation, to the Consolidated Financial Statements for further information. (2) Represents proceeds received from an insolvent asbestos-related insurance carrier.
Key assumptions include the number and nature of new claims to be filed each year, the average cost of disposing of each new claim, average annual defense costs, and the solvency risk with respect to the relevant insurance carriers.
Key assumptions include the number and nature of new claims to be filed each year, the average cost of disposing of each new claim, average annual defense costs, ability to reach acceptable agreements with insurance carriers currently not a party to a settlement agreement or at a coverage amount less than anticipated, and the solvency risk with respect to the relevant insurance carriers.
Income tax benefit (provision) equaled $1,158 and $(1,576) for 2023 and 2022, respectively, and includes income taxes associated with the Corporation’s profitable operations. An income tax benefit is not able to be recognized on losses of certain of the Corporation’s entities since it is “more likely than not” the asset will not be realized.
An income tax benefit is not able to be recognized on losses of certain of the Corporation’s entities since it is “more likely than not” the asset will not be realized.
Among other things, there can be no assurance that additional benefits similar to the Asbestos-Related Credit, the Asbestos-Related Proceeds, the Foreign Energy Credit and the Change in Employee Benefit Policy or additional expenses similar to the Asbestos-Related Charge and the Refund of Excess COVID-19 Subsidies will not occur in future periods.
Among other things, there can be no assurance that additional benefits similar to the Asbestos-Related Credit, the Asbestos-Related Proceeds and the Foreign Energy Credit or additional expenses similar to the Asbestos-Related Charge will not occur in future periods. The adjustments reflected in adjusted income from operations are pre-tax.
CONSOLIDATED RESULTS OF OPERATIONS OVERVIEW The Corporation 2023 2022 Net Sales: Forged and Cast Engineered Products $ 303,761 72 % $ 299,484 77 % Air and Liquid Processing 118,579 28 % 90,705 23 % Consolidated $ 422,340 100 % $ 390,189 100 % (Loss) Income from Operations: Forged and Cast Engineered Products $ 7,580 $ 444 Air and Liquid Processing (1) (29,084 ) 13,686 Corporate costs (13,070 ) (11,352 ) Consolidated $ (34,574 ) $ 2,778 Backlog: Forged and Cast Engineered Products $ 247,603 65 % $ 252,165 68 % Air and Liquid Processing 131,309 35 % 116,853 32 % Consolidated $ 378,912 100 % $ 369,018 100 % (1) (Loss) income from operations for the ALP segment includes a charge (benefit) for asbestos-related items of $40,696 and $(2,226) in 2023 and 2022, respectively, as more fully explained in Note 20 , Litigation, to the Consolidated Financial Statements.
CONSOLIDATED RESULTS OF OPERATIONS OVERVIEW The Corporation 2024 2023 Net Sales: Forged and Cast Engineered Products $ 286,565 69 % $ 303,761 72 % Air and Liquid Processing 131,740 31 % 118,579 28 % Consolidated $ 418,305 100 % $ 422,340 100 % Income (Loss) from Operations: Forged and Cast Engineered Products $ 10,494 $ 7,580 Air and Liquid Processing (1) 15,858 (29,084 ) Corporate costs (14,183 ) (13,070 ) Consolidated $ 12,169 $ (34,574 ) Backlog: Forged and Cast Engineered Products $ 250,530 66 % $ 247,603 65 % Air and Liquid Processing 128,354 34 % 131,309 35 % Consolidated $ 378,884 100 % $ 378,912 100 % (1) Income (loss) from operations for the ALP segment includes a net (benefit) charge for asbestos-related items of $(4,184) and $40,696 in 2024 and 2023, respectively, as more fully explained in Note 19 , Litigation, to the Consolidated Financial Statements.
In addition, the change in operating results from the prior year is principally due to: • Higher volume of sales, net of higher costs and an unfavorable product mix, which improved operating results in 2023 when compared to 2022 by approximately $3,600; offset by • Higher selling and administrative costs, primarily as a result of higher employee-related costs and higher commissions on the higher sales, which reduced operating results in 2023 when compared to 2022 by approximately $2,700; and • Recognition of a $681 benefit to operating income in 2022 resulting from the Change in Employee Benefit Policy.
In addition, the change in operating results from the prior year includes the net benefit resulting from: • Higher volume of sales, net of changes in product mix, which improved operating results in 2024 when compared to 2023 by approximately $2,300; offset by • Higher selling and administrative costs, primarily as a result of higher employee-related costs and higher commissions on the higher volume of sales of air handling units, which reduced operating results in 2024 when compared to 2023 by approximately $2,100; and • Higher depreciation costs of approximately $100 associated with the capital investment at the additional manufacturing facility.
The Corporation believes the amounts recorded in the accompanying consolidated financial statements for property, plant and equipment are recoverable and are not impaired as of December 31, 2023. Accounting for pension and other postretirement benefits involves estimating the cost of benefits to be provided well into the future and attributing that cost over the time period each employee works.
Accounting for pension and other postretirement benefits involves estimating the cost of benefits to be provided well into the future and attributing that cost over the time period each employee works.
Accordingly, changes in the income tax provision for each period includes the effects of changes in the pre-tax income of the Corporation’s profitable operations in each jurisdiction.
Accordingly, changes in the income tax provision for each period includes the effects of changes in the pre-tax income of the Corporation’s profitable operations in each jurisdiction and changes in expectations as to whether an income tax benefit will be able to be realized for the deferred income tax assets recognized.
Actual returns on plan assets approximated 12.41% for the domestic plans and 1.90% for the foreign plans for 2023 and, excluding 2022 due to the volatility in the financial markets during the year, 9.82% for the domestic plans and 7.62% for the foreign plans for 2017 - 2023.
Actual returns on plan assets approximated 6.20% for the domestic plans and (3.76)% for the foreign plans for 2024 and, excluding 2022 due to the volatility in the financial markets during the year, 10.65% for the domestic plans and 7.77% for the foreign plans for 2019 - 2024.
The curtailment of the majority of the Corporation’s defined benefit pension plans and the amendment of various other postretirement benefit plans has helped to mitigate the volatility in net periodic pension and other postretirement benefit costs resulting from changes in these assumptions. 23 The expected long-term rate of return on plan assets is an estimate of the average rates of earnings expected to be earned on funds invested, or to be invested, to provide for the benefits included in the projected benefit obligation.
The expected long-term rate of return on plan assets is an estimate of the average rates of earnings expected to be earned on funds invested, or to be invested, to provide for the benefits included in the projected benefit obligation.
(5) Represents excess COVID-19 subsidies received in 2020 and returned in 2022. 19 Forged and Cast Engineered Products 2023 2022 Change Net sales: Forged and cast mill rolls $ 285,577 $ 256,559 $ 29,018 FEP 18,184 42,925 (24,741 ) $ 303,761 $ 299,484 $ 4,277 Operating income $ 7,580 $ 444 $ 7,136 Backlog: Forged and cast mill rolls $ 245,063 $ 243,648 $ 1,415 FEP 2,540 8,517 (5,977 ) $ 247,603 $ 252,165 $ (4,562 ) Net sales increased by $4,277 in 2023 from 2022 principally due to the net of: • Higher volume of forged roll shipments, which increased net sales in 2023 when compared to 2022 by approximately $27,100; • Improved pricing, net of lower variable-index surcharges passed through to customers as a result of fluctuations in the price of raw material, energy and transportation cost, which increased net sales in 2023 when compared to 2022 by approximately $9,400; offset by • Lower volume of FEP shipments, which decreased net sales in 2023 when compared to 2022 by approximately $23,300; • Lower volume of cast roll shipments, which decreased sales in 2023 when compared to 2022 by approximately $6,600; and • Changes in exchange rates used to translate net sales of the segment’s foreign subsidiaries into the U.S. dollar, which decreased net sales in 2023 when compared to 2022 by approximately $2,300.
(3) Represents reimbursement of past energy costs at one of the Corporation ’ s foreign operations by its local government. 20 Forged and Cast Engineered Products 2024 2023 Change Net sales: Forged and cast mill rolls $ 273,036 $ 285,577 $ (12,541 ) FEP 13,529 18,184 (4,655 ) $ 286,565 $ 303,761 $ (17,196 ) Operating income $ 10,494 $ 7,580 $ 2,914 Backlog: Forged and cast mill rolls $ 248,437 $ 245,063 $ 3,374 FEP 2,093 2,540 (447 ) $ 250,530 $ 247,603 $ 2,927 Net sales decreased by $17,196 in 2024 from 2023 principally due to: • Lower volume of roll shipments, which decreased net sales in 2024 when compared to 2023 by approximately $19,600; • Lower volume of FEP shipments, which decreased net sales in 2024 when compared to 2023 by approximately $3,400; offset by • Improved pricing, net of lower variable-index surcharges passed through to customers as a result of fluctuations in the price of raw material, energy and transportation cost, which increased net sales in 2024 when compared to 2023 by approximately $5,100; and • Changes in exchange rates used to translate net sales of the segment’s foreign subsidiaries into the U.S. dollar, which increased net sales in 2024 when compared to 2023 by approximately $700.
The segment utilizes an independent group of sales offices located throughout the United States and Canada.
The segment utilizes an independent group of sales offices located throughout the United States and Canada. EXECUTIVE OVERVIEW For the FCEP segment, global steel manufacturing capacity continues to exceed global consumption of steel products.
The adjustments reflected in adjusted income (loss) from operations are pre-tax. The net tax (benefit) expense associated with the adjustments is approximately $(1,330) for 2023 and $101 for 2022.
The net tax expense (benefit) associated with the adjustments is approximately $153 for 2024 and $(1,330) for 2023.
Net cash flows provided by financing activities equaled $21,688 and $42,587 for 2023 and 2022, respectively, a decrease of $20,899 primarily due to: • Lower net borrowings from the Corporation’s revolving credit facility of $8,412; • Lower proceeds from sale and leaseback financing arrangements of $20,000; • Lower proceeds from shareholders exercising warrants for the Corporation’s common stock of $193; offset by • Higher proceeds from the equipment financing facility of $3,943; • Proceeds from the Disbursement Agreement between UES and Store Capital Acquisitions, LLC for leasehold improvements of $2,500; • Higher net proceeds from related-party borrowings of $672; • Lower debt and equity issuance costs of $337; and • Lower debt principal payments of $254.
Net cash flows (used in) provided by financing activities equaled $(1,353) and $21,688 for 2024 and 2023, respectively, a change of $23,041 primarily due to: • Lower net borrowings from the Corporation’s revolving credit facility of $8,922; • Lower proceeds from the equipment financing facility of $8,639; • Lower proceeds from the Disbursement Agreement between UES and STORE for leasehold improvements of $2,500; • Higher debt principal payments of $1,644; and • Net repayments of related-party borrowings of $1,336 in the current year.
The credit for 2022 represents a reduction in the estimated defense-to-indemnity cost ratio from 70% to 65% based on ongoing experience and improvements in defense costs. See Note 20 , Litigation, to the Consolidated Financial Statements. Investment-related income equaled $128 and $519 for 2023 and 2022, respectively, and represents primarily dividends received from one of the Corporation’s Chinese joint ventures.
See Note 19 , Litigation, to the Consolidated Financial Statements. Investment-related income equaled $121 and $128 for 2024 and 2023, respectively, and represents primarily dividends received from one of the Corporation’s Chinese joint ventures. Interest expense equaled $11,620 and $9,347 for 2024 and 2023, respectively.
Net sales equaled $422,340 and $390,189 for 2023 and 2022, respectively. While both segments contributed to the $32,151 increase in net sales, the majority of the increase is attributable to the ALP segment. A discussion of sales by segment is included below. (Loss) income from operations equaled $(34,574) and $2,778 for 2023 and 2022, respectively.
Net sales equaled $418,305 and $422,340 for 2024 and 2023, respectively, a decrease of $4,035. While net sales improved for the ALP segment, the increase was more than offset by lower net sales for the FCEP segment. A discussion of sales by segment is included below. Income (loss) from operations equaled $12,169 and $(34,574) for 2024 and 2023, respectively.
For 2022, includes the Asbestos-Related Credit of $(2,226). See Note 20 , Litigation, to the Consolidated Financial Statements for further information. Net sales for 2023 increased from the prior year by $27,874 on better pricing and a higher volume of shipments.
For 2023, includes a net expense of $40,696 for the Asbestos-Related Charge offset by the Asbestos-Related Proceeds. See Note 19 , Litigation, to the Consolidated Financial Statements for further information. Net sales for 2024 improved from the prior year by $13,161.
Gross margin, excluding depreciation and amortization , as a percentage of net sales was 17.7% and 15.9% for 2023 and 2022, respectively, and includes the Foreign Energy Credit for 2023 and the Refund of Excess COVID-19 Subsidies and approximately $411 of the benefit from the Change in Employee Benefit Policy for 2022.
Approximately 5% of the backlog is expected to be released after 2025. A discussion of backlog by segment is included below. Gross margin, excluding depreciation and amortization , as a percentage of net sales was 19.5% and 17.7% for 2024 and 2023, respectively, and includes the Foreign Energy Credit for 2023.
Backlog equaled $247,603 at December 31, 2023, compared to $252,165 at December 31, 2022, a decrease of $4,562 principally due to the net of: • Lower backlog for cast rolls resulting primarily from economic uncertainty across Europe, the entry of low-priced product from China and relatively high cast roll inventories at customers, which decreased backlog at December 31, 2023 when compared to backlog at December 31, 2022 by approximately $7,500; and • Lower backlog for FEP resulting primarily from softening of the energy and steel distribution markets and increased imports, which decreased backlog at December 31, 2023 when compared to backlog at December 31, 2022 by approximately $6,000; offset by 20 • Higher backlog for forged rolls, driven by improved U.S. domestic demand and better pricing, which increased backlog at December 31, 2023 when compared to backlog at December 31, 2022 by approximately $5,300; and • Higher foreign exchange rates used to translate the backlog of the Corporation’s foreign subsidies into the U.S. dollar, which increased backlog at December 31, 2023 when compared to backlog at December 31, 2022 by approximately $3,600.
Backlog equaled $250,530 at December 31, 2024, compared to $247,603 at December 31, 2023, an increase of $2,927 principally due to: • Higher backlog for cast rolls resulting primarily from recovery for hot mill and static backup rolls, which increased backlog at December 31, 2024 when compared to backlog at December 31, 2023 by approximately $16,300; offset by • Lower backlog for forged rolls principally due to softer demand, which decreased backlog at December 31, 2024 when compared to backlog at December 31, 2023 by approximately $6,400; and • Lower foreign exchange rates used to translate the backlog of the Corporation’s foreign subsidies into the U.S. dollar, which decreased backlog at December 31, 2024 when compared to backlog at December 31, 2023 by approximately $6,500.
LIQUIDITY AND CAPITAL RESOURCES 2023 2022 Change Net cash flows used in operating activities $ (3,686 ) $ (27,208 ) $ 23,522 Net cash flows used in investing activities (19,685 ) (16,308 ) (3,377 ) Net cash flows provided by financing activities 21,688 42,587 (20,899 ) Effect of exchange rate changes on cash and cash equivalents 234 (673 ) 907 Net decrease in cash and cash equivalents (1,449 ) (1,602 ) 153 Cash and cash equivalents at beginning of period 8,735 10,337 (1,602 ) Cash and cash equivalents at end of period $ 7,286 $ 8,735 $ (1,449 ) Net cash flows used in operating activities equaled $(3,686) and $(27,208) for 2023 and 2022, respectively.
At December 31, 2024, approximately 4% of the backlog is expected to ship after 2025. 22 LIQUIDITY AND CAPITAL RESOURCES 2024 2023 Change Net cash flows provided by (used in) operating activities $ 18,028 $ (3,686 ) $ 21,714 Net cash flows used in investing activities (8,245 ) (19,685 ) 11,440 Net cash flows (used in) provided by financing activities (1,353 ) 21,688 (23,041 ) Effect of exchange rate changes on cash and cash equivalents (289 ) 234 (523 ) Net increase (decrease) in cash and cash equivalents 8,141 (1,449 ) 9,590 Cash and cash equivalents at beginning of period 7,286 8,735 (1,449 ) Cash and cash equivalents at end of period $ 15,427 $ 7,286 $ 8,141 Net cash flows provided by (used in) operating activities equaled $18,028 and $(3,686) for 2024 and 2023, respectively, with the change primarily due to a lower investment in trade working capital.
Air and Liquid Processing 2023 2022 Change Net sales: Heat exchange coils $ 45,258 $ 31,395 $ 13,863 Air handling systems 38,526 29,436 9,090 Centrifugal pumps 34,795 29,874 4,921 $ 118,579 $ 90,705 $ 27,874 Operating (loss) income (1) $ (29,084 ) $ 13,686 $ (42,770 ) Backlog $ 131,309 $ 116,853 $ 14,456 (1) For 2023, includes net expense of $40,696 for the Asbestos-Related Charge and the Asbestos-Related Proceeds.
At December 31, 2024, approximately 5% of the backlog is expected to ship after 2025. 21 Air and Liquid Processing 2024 2023 Change Net sales: Air handling systems $ 46,439 $ 38,526 $ 7,913 Centrifugal pumps 40,064 34,795 5,269 Heat exchange coils 45,237 45,258 (21 ) $ 131,740 $ 118,579 $ 13,161 Operating income (loss) (1) $ 15,858 $ (29,084 ) $ 44,942 Backlog $ 128,354 $ 131,309 $ (2,955 ) (1) For 2024, includes a net benefit of $(4,184) for the Asbestos-Related Credit and the Asbestos-Related Proceeds.
The primary focus for this segment is to maintain a strong position in the roll market and, with its previously announced capital program to upgrade existing equipment anticipated to be substantially completed by March 31, 2024, improve operational efficiencies, reduce operating costs, improve reliability, and diversify and develop FEP for use in other industries.
The primary focus for the FCEP segment is to improve its profitability by maintaining a strong position in the roll market and continuing to improve operational efficiency and equipment reliability following the completion of the previously announced capital 16 equipment program.
Contributions to the defined benefit pension and other postretirement benefits plans are expected to approximate $7,700 in 2024, primarily as a result of lower-than-expected pension asset performance in 2022, $5,500 in 2025, $4,400 in 2026, $3,600 in 2027, and $2,900 in 2028. Net cash flows used in investing activities primarily represents expenditures for the FCEP segment.
Contributions to the defined benefit pension and other postretirement benefit plans are expected to approximate $5,000 in 2025, $4,400 in 2026, $4,000 in 2027, $3,700 in 2028, and $3,300 in 2029.
Selling and administrative expenses approximated $50,884 (12.0% of net sales) and $43,527 (11.2% of net sales) for 2023 and 2022, respectively. The increase of $7,357 is principally due to higher employee-related costs including base salaries, short-term and long-term incentive compensation and medical insurances.
Selling and administrative expenses approximated $54,878 (13.1% of net sales) and $50,884 (12.0% of net sales) for 2024 and 2023, respectively. The increase of $3,994 is principally due to higher employee-related costs, higher commissions for the ALP segment, and higher professional fees for Corporate. Depreciation and amortization expense equaled $18,611 and $17,674 for 2024 and 2023, respectively.
More specifically: • A higher volume of shipments to commercial, industrial and nuclear customers for heat exchange coils; • Increased order intake for air handling systems enabled by the additional capacity provided by a third-party assembler for the earlier part of 2023 and an additional manufacturing location beginning in the latter part of 2023; and • A higher volume of shipments to commercial and U.S.
More specifically, backlog for air handling systems decreased from the prior year as a result of the high volume of shipments in 2024 following the significant order intake in 2023 associated with the additional manufacturing facility. Backlog for heat exchange coils decreased slightly due to timing.
Removed
EXECUTIVE OVERVIEW While the Corporation currently is operating at more normal levels, when compared to the operating levels during the pandemic and immediately thereafter, it continues to be challenged by lingering global economic effects of a post-pandemic environment and repercussions from the Russia-Ukraine conflict, among other events, including: • Periodic disruptions to the global supply chain for the Corporation, its vendors and its customers; • Global inflationary pressures; • Depressed business activity in Europe and Asia (specifically China); and • Global economic uncertainty.
Added
Demand for steel in the segment’s two largest markets, North America and Europe, softened during 2024 compared to 2023 and 2022 and is approximately 15% below 2019 pre-pandemic levels as of December 31, 2024. The financial impact from weaker demand has been mitigated through higher pricing and increased participation in new mill builds, primarily in North America.
Removed
The Corporation is actively monitoring, and will continue to actively monitor, the geopolitical and economic consequence of these events and the potential impact on its operations, financial condition, liquidity, suppliers, industry, and workforce. 15 For the FCEP segment, the forged roll market in North America improved during the year driven by U.S. domestic demand and better pricing.
Added
Recent order intake has shown improvement, and shipments are expected to increase for the segment’s cast roll facilities and pricing to remain stable in 2025. In addition, FEP order activity is improving after several years of depressed demand.
Removed
However, expectations are for flat to declining demand during the first half of 2024 with recovery in the second half of 2024. Improved pricing and increased market share will help minimize the impact of the expected decline during the first half of 2024.
Added
Increased entry of low-priced products from other countries has negatively impacted local demand in Europe and the U.S., with several of the segment’s largest customers engaging in trade cases to reduce the number of imports into the U.S.
Removed
The cast roll market has softened, which is expected to continue in 2024, as Europe experiences economic uncertainty, the entry of low-priced product from China and relatively high cast roll inventory levels. The FEP market continues to be challenged by increased imports and high inventory levels at bar distributors.
Added
In addition, the new administration has announced new tariffs on steel and aluminum imports to the U.S. and has, for now, removed the exceptions that allowed some countries to continue sending products to the U.S.
Removed
In February 2023, Union Electric Steel Corporation (“UES”), a wholly owned subsidiary of the Corporation, announced a price increase on all new quotations and orders for forged and cast roll products.
Added
In addition, in February 2025, the segment's U.K. operations entered into a formal consultation process with its unions and staff to evaluate various options to improve its profitability.
Removed
By comparison, included in income from operations for 2022 is a: • Credit of $2,226 representing the benefit from the change in the estimated defense-to-indemnity cost ratio from 70% to 65% (the “Asbestos-Related Credit”); and • Benefit of $1,431 resulting from a change in how certain employees earn certain benefits (the “Change in Employee Benefit Policy”); offset by 16 • Charge of $664 for excess COVID-19 subsidies received in 2020 but returned in 2022 (the “Refund of Excess COVID-19 Subsidies”).
Added
The Corporation is actively monitoring, and will continue to actively monitor, the lingering effects from a post-pandemic environment, repercussions from the Russia-Ukraine and Middle East conflicts and similar geopolitical matters, economic conditions, and other developments relevant to its business including the potential impact on its operations, financial condition, liquidity, suppliers, industry, and workforce.
Removed
A discussion of (loss) income from operations for the Corporation’s two segments is included below. Corporate costs increased in 2023, when compared to 2022, by $1,718 due to higher employee-related costs, including long-term incentive compensation, and the prior year benefiting from a portion of the Change in Employee Benefit Policy.
Added
Included in income from operations for 2024 is a: • Credit of $4,101 associated with the decrease in the estimated costs of pending and future asbestos claims net of additional insurance recoveries and a reduction in the estimated defense-to-indemnity cost ratio from 60% to 55% (the “Asbestos-Related Credit”) and • Credit of $83 for proceeds received from an insolvent asbestos-related insurance carrier (the “Asbestos-Related Proceeds”).

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