Ampco-Pittsburgh (NYSE:AP) reported higher first-quarter 2026 revenue but lower adjusted EBITDA, as strength in its Air and Liquid Processing segment was offset by mix and timing issues in its forged and cast engineered products business.
Chief Executive Officer Brett McBrayer said consolidated adjusted EBITDA was $8 million for the quarter, down from $8.8 million a year earlier. He attributed the decline to “ramp-up costs in Sweden” and a “weaker mix” in the forged and cast engineered products segment, while noting that the business is showing signs of stabilization after a 2025 slowdown.
Net sales for the quarter were $108.3 million, up 3.9% from the prior-year period, according to Chief Financial Officer David Anderson. Backlog increased 5%, driven primarily by record order activity in the Air and Liquid Processing segment.
Air and Liquid Segment Sets Records
Anderson, who also serves as president of Air and Liquid Systems Corporation, said the segment had a “tremendous start to the year,” with record customer orders and record adjusted EBITDA.
First-quarter revenue in the Air and Liquid Processing segment increased 17% from a year earlier, with higher revenue across all product lines. Adjusted EBITDA rose 52% year over year, which Anderson attributed to higher revenue, improved manufacturing efficiencies and favorable product mix.
The segment’s backlog rose $23.5 million, or 19%, during the quarter. Anderson said customer orders were 40% higher than in any prior quarter, reflecting strong demand for custom-engineered products across several markets.
He cited data centers as a driver of rising demand in the power generation market, which is supporting demand for the company’s commercial pump and nuclear heat exchanger products. Anderson said Ampco-Pittsburgh’s commercial pumps are used in gas turbines, while the company remains a dominant supplier of heat exchangers to the nuclear market.
Anderson also pointed to continued demand from the U.S. Navy, saying the company expects that demand to continue as the Navy advances fleet expansion plans. Manufacturing equipment installed in 2024 has increased pump capacity, and additional equipment funded through a Navy program arrived in early 2026 and is expected to begin producing products in the second quarter. More equipment from that program is expected in the second half of the year.
Demand for custom air handlers also remains strong, particularly in the pharmaceutical market, Anderson said. The company is increasing manufacturing capacity through new equipment, higher headcount and efficiency improvements.
Forged and Cast Segment Faces Mix Headwinds
Sam Lyon, president of Union Electric Steel Corporation, said the Forged and Cast Engineered Products segment reported net sales of $70.8 million, compared with $72.3 million in the first quarter of 2025. Sales were relatively flat, as activity in Sweden and Slovenia mostly offset the loss of revenue from the closure of the U.K. facility and the company’s U.S. distribution business, AUP.
Segment adjusted EBITDA was $5.7 million, up from $2.3 million in the fourth quarter but down from $8.3 million a year earlier. Lyon said three timing items affected the quarter:
- A less profitable shipment mix in Europe related to roll supply from Sweden and the company’s joint venture in China, which he said should reverse in coming quarters.
- Lower shipments of higher-margin large rolls in the U.S., as tariff uncertainty caused customers to defer orders in late 2025 and early 2026.
- Higher-cost inventory from the fourth quarter of 2025 flowing through the income statement, tied to production downtime during a softer order period.
Lyon said the outlook has improved, with the U.S. order book for large rolls recovering in the second quarter and the work roll order book higher for the second and third quarters. He said demand and margins for FEP products have improved, supported by the tariff environment.
“We expect the remainder of the year to be stronger,” Lyon said.
During the question-and-answer portion of the call, Lyon said large roll orders had been down about 35% from normal levels in the fourth quarter and first quarter but had “completely recovered” for the next two quarters. He also said the company is seeing strong demand for work rolls, particularly in the third quarter.
Tariffs, Market Consolidation and Reshoring
Lyon said tariff uncertainty had weighed on some customer decisions, but he added that conditions have largely normalized. He said some business that was not captured in 2026 because of European tariff concerns is returning in the 2027 order book.
In response to a question from Justin Bergner of Gabelli Funds about revised Section 232 tariffs, Lyon said tariffs on rolls from Sweden had been “pretty dramatically reduced,” creating a more level playing field with a U.S. competitor. He added that tariffs on FEP products remained at 50%, which he described as a “healthy barrier” that is helping the company’s order book and margins.
Lyon also reiterated that two competitors are exiting parts of the roll market. He said Marichal Ketin, a European cast roll manufacturer, is in receivership, while a South American competitor exited the cast roll market at the end of 2025 and is exiting the forged roll market. He said the consolidation is creating opportunities for Ampco-Pittsburgh to gain share, particularly in South America, where customers have contacted the company directly.
Asked by John Bair of Ascend Wealth Advisors whether reshoring is helping demand, Lyon said it is “definitely” supporting the U.S. market, citing infrastructure, data centers and pharmaceutical sites.
Liquidity and Debt Reduction
Anderson said total selling and administrative expenses were relatively flat from the prior year, as higher sales commissions and other costs were offset by lower expenses following the U.K. facility closure and the closure of the U.S. steel distribution business. Depreciation and amortization declined by about $400,000 due to those closures.
At March 31, 2026, Ampco-Pittsburgh had $9.2 million in cash and $30.8 million of undrawn availability on its revolving credit facility.
Anderson said the U.S. defined benefit plan reached fully funded status in early 2026, leading to a shift toward a more conservative investment portfolio and contributing to lower net pension and other post-retirement income.
Asked about debt reduction, Anderson said it is a primary focus as the company moves toward positive cash flow this year. He said a reasonable expectation would be $8 million to $10 million of debt reduction over the balance of 2026.
Management Reaffirms Savings Expectations
McBrayer said the company continues to expect an annual adjusted EBITDA improvement of $7 million to $8 million moving forward from actions taken in the second half of 2025 in the Forged and Cast segment.
During the Q&A, Lyon said the company remains on track for $7 million to $8 million in savings from the closure of the U.K. facility. He said the U.K. operation had been generating about $30 million in annualized revenue at the end of 2025, with roughly half to two-thirds of that business expected to shift to Sweden.
McBrayer closed the call by thanking employees, the board of directors and shareholders, and said improving market conditions and prior restructuring actions should support performance going forward.
About Ampco-Pittsburgh (NYSE:AP)
Ampco-Pittsburgh Corporation is a U.S.-based specialty metals manufacturer that produces cast and forged components for a range of industrial markets. The company's primary offerings include custom-designed forged rolls, grinding rolls and specialty bars for the steel and metal processing industries. In addition, Ampco-Pittsburgh supplies precision couplings, gears and die components for original equipment manufacturers in sectors such as mining, power generation and heavy machinery.
The company operates multiple production facilities in North America, where it employs advanced melting, heat-treating and machining processes to deliver components with tight tolerances and enhanced wear resistance.
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