Ampco-Pittsburgh Corporation ((AP)) has held its Q4 earnings call. Read on for the main highlights of the call.
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Ampco-Pittsburgh’s latest earnings call painted a mixed but cautiously optimistic picture for investors. Heavy non-cash charges and a weak fourth quarter weighed on reported results, yet underlying operations improved, led by record performance in Air & Liquid Processing, rising bookings into early 2026, and clear cost and asset actions aimed at lifting profitability over the next two years.
Air & Liquid delivers record year despite Q4 noise
Air & Liquid Processing posted a standout 2025, with full-year revenue up 7% and fourth-quarter revenue up 10% versus last year. Adjusted EBITDA reached a record $15.4 million, a 21% increase and the best in the segment’s history, underscoring strong execution even as some broader company metrics came under pressure.
Early-2026 bookings surge and replace lost Navy backlog
Order activity accelerated sharply at the start of 2026, with bookings in January and February up 73% year over year. U.S. Navy bookings alone exceeded $9 million in that period, more than offsetting the $7.1 million backlog removed when the Constellation frigate program was terminated late in 2025.
Exposure to high-growth end markets boosts long-term story
Ampco-Pittsburgh is increasingly tied to higher-growth sectors, with 2025 heat exchanger and nuclear shipments the highest in company history. Management also highlighted strong U.S. Navy demand, record commercial pump bookings tied to AI and data center build-outs, and robust custom air handler demand from pharmaceutical customers.
Consolidated adjusted EBITDA rises for a third straight year
Despite a disrupted fourth quarter, consolidated adjusted EBITDA for 2025 rose to $29.2 million, up $1.1 million or about 3.9% from the prior year. This marks the third consecutive year of adjusted EBITDA growth, suggesting that underlying profitability is steadily improving even as reported GAAP results fluctuate.
FCEP shows underlying profitability beneath GAAP losses
Forged & Cast Engineered Products generated $24.4 million of adjusted EBITDA for 2025, confirming that the segment remains fundamentally profitable. Full-year net sales climbed to $292.6 million from $280.6 million, even though GAAP results showed a sizable operating loss driven by one-time non-cash charges.
Asset exits and Sweden ramp point to margin upside
Management completed the removal of underperforming assets, actions that are expected to boost adjusted EBITDA by $7 million to $8 million annually once fully reflected. In Sweden, production is targeted to grow about 20% in 2026 versus 2025, with order book normalization by the end of the second quarter and full margin realization anticipated by the third quarter of 2026.
Cost control and balance sheet discipline support flexibility
Selling and administrative expenses fell by $2.8 million, or roughly 5%, for 2025, underscoring tighter cost management. The company also reported a pension plan that moved to fully funded status in early 2026 and year-end liquidity of $10.7 million in cash plus $25.5 million of unused revolver capacity.
Q4 adjusted EBITDA pressured by tariffs and fewer operating days
Fourth-quarter consolidated adjusted EBITDA dropped to $3.2 million from $6.0 million a year earlier, a decline of about 47%. Management cited a pause in FCEP customer orders tied to tariff announcements and fewer operating days as key drivers of the shortfall, highlighting the sensitivity of quarterly results to external shocks.
One-time non-cash charges distort GAAP performance
The company recorded large one-time non-cash charges as it exited its U.K. cast roll facility and U.S. steel distribution business, totaling $42.4 million in Q4 and $52.2 million for the year. As a result, FCEP reported a GAAP operating loss of $44.7 million, mostly due to a $41.4 million deconsolidation charge tied to the U.K. closure.
Asbestos accrual revaluation adds another non-cash hit
Ampco-Pittsburgh also booked an after-tax non-cash asbestos accrual revaluation expense of $11.9 million in the fourth quarter. While the adjustment raised the near-term accrual, management indicated that projected asbestos payments should begin to decline starting in 2027, easing this long-term burden.
FCEP faces Q4 margin headwinds from mix and FX
FCEP’s fourth-quarter adjusted EBITDA dropped to $2.2 million from $5.5 million a year earlier, reflecting several operational headwinds. These included fewer U.S. operating days amid temporary roll demand softness, unfavorable product mix, Swedish krona and dollar currency pressures, and higher ramp-up costs in Sweden.
Navy program termination trims backlog but not demand
Air & Liquid’s backlog fell by $8 million year over year, primarily due to the termination of the Constellation frigate program, which removed $7.1 million of orders in late 2025. Management expects costs associated with those canceled orders to be recovered, and strong new Navy bookings early in 2026 already more than replaced the lost backlog.
Currency and pricing challenges in Europe weigh on margins
In Europe, a weaker dollar versus the Swedish krona created margin pressure because Swedish costs are largely in SEK and EUR while about 40% of output is sold in USD. Management plans pricing adjustments for 2027 to better align revenue with costs and reduce the impact of these currency mismatches on profitability.
Guidance points to margin expansion through 2027
Management expects the strategic actions taken in Q4 to drive a $7 million to $8 million annual uplift in adjusted EBITDA as underperforming assets are exited and steel markets recover. With Sweden volumes set to rise about 20% in 2026, Air & Liquid adding capacity, and order books normalizing by mid-2026, the company is targeting significant margin expansion in 2026 and into full-year 2027, supported by solid liquidity.
Ampco-Pittsburgh’s earnings call framed 2025 as a transition year where non-cash charges masked steady operational progress and an improving mix of end markets. For investors, the story hinges on management delivering the promised margin gains from asset exits, Sweden’s ramp, and strong AI, nuclear, and Navy demand, which together suggest better earnings power in 2026–2027 than current GAAP results imply.