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AmpcoPittsburgh Corp. Reports Operating Results (10-Q)

November 09, 2009 | About:

AmpcoPittsburgh Corp. (NYSE:AP) filed Quarterly Report for the period ended 2009-09-30.

Ampco-Pittsburgh Corporation's businesses are classified in three segments: Forged and Cast RollsAir and Liquid Processingand Plastics Processing Machinery. Ampcopittsburgh Corp. has a market cap of $281.83 million; its shares were traded at around $27.63 with a P/E ratio of 8.35 and P/S ratio of 0.71. The dividend yield of Ampcopittsburgh Corp. stocks is 2.61%. Ampcopittsburgh Corp. had an annual average earning growth of 76.5% over the past 5 years.

Highlight of Business Operations:

Net Sales. Net sales for the nine months ended September 30, 2009 and 2008 were $232,695,000 and $306,425,000, respectively, and $71,961,000 and $105,906,000, respectively, for the three months then ended. Backlog approximated $538,073,000 at September 30, 2009 versus $690,727,000 as of December 31, 2008 and $831,116,000 as of September 30, 2008. A discussion of sales and backlog for the Corporation s two segments is included below.

Income from Operations. Income from operations for the nine months ended September 30, 2009 and 2008 approximated $39,009,000 and $50,134,000, respectively, and $12,713,000 and $16,562,000 for the three months ended September 30, 2009 and 2008, respectively. A discussion of operating results for the Corporation s two segments is included below.

Air and Liquid Processing. Generally, business activity for this segment trails the economy by six to twelve months. Accordingly, sales and operating income for the group exceeded the comparable prior year periods principally because of strong orders brought forward from 2008 and received during the earlier part of this year as well as lower material and labor costs. Specifically, Buffalo Pumps benefited from a higher volume of pumps to the energy sector and the U.S. Navy. A shift in product mix aided Aerofin s performance with increased shipments to electric utility customers offset by a reduction in lower-margin sales to original equipment manufacturers. Buffalo Air Handling, however, continues to operate at close to a break-even level due to a significant reduction in its backlog of orders as construction projects for pharmaceutical, hospital and universities have been adversely impacted by the weak economy. As of September 30, 2009, backlog approximated $37,124,000 in comparison to $54,843,000 as of December 31, 2008 and $55,236,000 as of September 30, 2008 and has declined for each of the units because of the slowdown in business activity. Approximately 75% of the month-end backlog is expected to ship in 2009.

Net Income and Earnings per Common Share. As a result of the above, the Corporation s net income for the nine months ended September 30, 2009 and 2008 equaled $23,827,000 or $2.34 per common share and $33,726,000 or $3.31 per common share, respectively, and $8,715,000 or $0.85 per common share and $11,974,000 or $1.18 per common share for the three months ended September 30, 2009 and 2008, respectively.

The decrease in net cash flows used in investing activities is primarily attributable to maintaining available funds in cash and cash equivalents versus investing in short-term marketable securities. During the third quarter of 2009, Union Electric Steel made its final contribution for its 49% interest in a Chinese joint venture; contribution requirements of $14,700,000 were made over the past three years with $8,820,000 contributed in 2009 and $2,940,000 contributed in each of 2008 and 2007. Also, in 2009, monies were deposited in escrow and are being held as collateral for the outstanding foreign currency sale contracts of Davy Roll. A portion of these monies were returned during the quarter in connection with the diminishing exposure relating to the outstanding contracts. As of September 30, 2009, future capital expenditures approximating $32,593,000, to be spent over the next 12 – 18 months, have been approved.

As a result of the above, cash and cash equivalents increased $1,383,000 in 2009 and ended the period at $82,990,000 in comparison to $81,607,000 at December 31, 2008.

Read the The complete ReportAP is in the portfolios of John Keeley of Keeley Fund Management.

About the author:

Charlie Tian, Ph.D. - Founder of GuruFocus. You can now order his book Invest Like a Guru on Amazon.

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