<PAGE>
FORM lO-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
(Mark one)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 or 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1996
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
Commission File Number 1-898.
AMPCO-PITTSBURGH CORPORATION
Incorporated in Pennsylvania.
I.R.S. Employer Identification No. 25-1117717.
600 Grant Street, Pittsburgh, Pennsylvania 15219
Telephone Number 412/456-4400
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15 (d) of the
Securities Exchange Act of 1934 during the preceding 12 months
(or for such shorter periods that the registrant was required
to file such reports) and (2) has been subject to such filing
requirements for the past 90 days.
YES X NO
On August 14, 1996, 9,577,621 common shares were outstanding.
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AMPCO-PITTSBURGH CORPORATION
INDEX
Page No.
Part I - Financial Information:
Item 1 - Consolidated Financial Statements
Consolidated Balance Sheets -
June 30, 1996 and December 31, 1995 3
Consolidated Statements of Income -
Six Months Ended June 30, 1996 and 1995;
Three Months Ended June 30, 1996 and 1995 4
Consolidated Statements of Cash Flows -
Six Months Ended June 30, 1996
and 1995 5
Notes to Consolidated Financial Statements 6
Item 2 - Management's Discussion and Analysis
of Financial Condition and Results
of Operations 7
Part II - Other Information:
Item 5 - Other Information 10
Item 6 - Exhibits and Reports on Form 8-K 10
Signatures 11
Exhibits
Exhibit 27
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<TABLE>
<CAPTION>
PART I - FINANCIAL INFORMATION
AMPCO-PITTSBURGH CORPORATION
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
<S> <C> <C>
June 30, December 31,
1996 1995
Assets
Current assets:
Cash and cash equivalents $ 16,955,498 $ 15,553,263
Receivables, less allowance for
doubtful accounts of $706,354 in
1996 and $633,036 in 1995 31,884,162 28,734,492
Inventories 33,887,571 33,509,644
Investments available for sale 4,610,842 6,969,878
Deferred income taxes 3,305,120 5,530,994
Other 2,185,671 1,663,337
Total current assets 92,828,864 91,961,608
Property, plant and equipment,
at cost 115,112,466 112,139,533
Accumulated depreciation (59,655,792) (56,987,783)
Net property, plant and equipment 55,456,674 55,151,750
Prepaid pension 14,230,588 14,296,588
Other noncurrent assets 9,287,301 10,013,744
$171,803,427 $171,423,690
Liabilities and Shareholders' Equity
Current liabilities:
Accounts payable $ 7,686,992 $ 8,279,435
Accrued payrolls and employee
benefits 8,010,472 7,878,148
Other 8,455,972 8,861,133
Total current liabilities 24,153,436 25,018,716
Employee benefit obligations 19,303,766 19,985,697
Deferred income taxes 10,837,278 10,929,725
Other noncurrent liabilities 2,484,249 3,354,503
Total liabilities 56,778,729 59,288,641
Shareholders' equity:
Preference stock - no par value;
authorized 3,000,000 shares: none
issued - -
Common stock - par value $1; authorized
20,000,000 shares; issued and
outstanding 9,577,621 in 1996
and 1995 9,577,621 9,577,621
Additional paid-in capital 102,555,980 102,555,980
Retained earnings (deficit) (2,411,855) (7,491,711)
109,721,746 104,641,890
Cumulative translation and other
adjustments 2,577,510 3,234,345
Unrealized holding gains on
securities 2,725,442 4,258,814
Total shareholders' equity 115,024,698 112,135,049
$171,803,427 $171,423,690
</TABLE>
See Notes to Consolidated Financial Statements.
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<TABLE>
<CAPTION>
AMPCO-PITTSBURGH CORPORATION
CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
<S> <C> <C> <C> <C>
Six Months Ended June 30, Three Months Ended June 30,
1996 1995 1996 1995
Net sales $ 81,865,465 $ 70,151,228 $ 40,767,130 $ 36,547,870
Operating costs and expenses:
Cost of products sold
(excluding depreciation) 57,905,652 50,647,213 28,524,592 26,513,159
Selling and administrative 12,087,492 9,784,903 6,112,944 5,070,042
Depreciation 3,150,481 2,861,460 1,577,523 1,442,356
73,143,625 63,293,576 36,215,059 33,025,557
Income from operations 8,721,840 6,857,652 4,552,071 3,522,313
Other income (expense) - net 186,898 (179,277) 108,375 (186,046)
Income before taxes 8,908,738 6,678,375 4,660,446 3,336,267
Provision for taxes on
income 3,350,000 2,560,000 1,750,000 1,330,000
Net income $ 5,558,738 $ 4,118,375 $ 2,910,446 $ 2,006,267
Net income per common
share $ .58 $ .43 $ .30 $ .21
Cash dividends declared
per share $ .05 $ .05 $ .025 $ .025
Weighted average number of
common shares outstanding 9,577,621 9,577,621 9,577,621 9,577,621
</TABLE>
See Notes to Consolidated Financial Statements
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<TABLE>
<CAPTION>
AMPCO-PITTSBURGH CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
<S> <C> <C>
Six Months Ended June 30,
1996 1995
Cash flows from operating activities:
Net income $ 5,558,738 $ 4,118,375
Adjustments to reconcile net income to net
cash flows from operating activities:
Depreciation and amortization 3,150,481 2,861,460
Deferred income taxes 3,050,000 2,266,000
Other - net 144,457 284,408
(Increase) decrease in assets:
Receivables (3,537,316) 902,517
Inventories (601,340) 500,661
Other assets (358,413) (143,740)
Increase (decrease) in liabilities:
Accounts payable (367,567) (1,349,730)
Accrued payrolls and employee benefits 181,975 (177,527)
Other liabilities (1,520,539) (506,542)
Net cash flows from operating activities 5,700,476 8,755,882
Cash flows from investing activities:
Purchases of property, plant and equipment (3,816,852) (1,947,961)
Proceeds from sales of investments 582,122 0
Acquisition of Buffalo Air Handling 0 (11,500,000)
Net cash flows from investing activities (3,234,730) (13,447,961)
Cash flows from financing activities:
Dividends paid (957,763) (479,125)
Net cash flows from financing activities (957,763) (479,125)
Effect of exchange rate changes on cash (105,748) 288,337
Net increase (decrease) in cash 1,402,235 (4,882,867)
Cash at beginning of year 15,553,263 19,328,921
Cash at end of period $ 16,955,498 $ 14,446,054
Supplemental information:
Income tax payments $ 795,958 $ 243,250
See Notes to Consolidated Financial Statements.
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AMPCO-PITTSBURGH CORPORATlON
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. Unaudited Consolidated Financial Statements
The condensed consolidated balance sheet as of June 30,
1996, the consolidated statements of income for the six and
three month periods ended June 30, 1996 and 1995 and the
consolidated statements of cash flows for the six month
periods then ended have been prepared by the Corporation
without audit. In the opinion of management, all
adjustments necessary to present fairly the financial
position, results of operations and cash flows for the
periods presented have been made.
Certain information and footnote disclosures normally
included in financial statements prepared in accordance
with generally accepted accounting principles have been
condensed or omitted. It is suggested that these
consolidated financial statements be read in conjunction
with the consolidated financial statements and notes
thereto included in the Corporation's annual report to
shareholders for the year ended December 31, 1995. The
results of operations for the periods ended June 30, 1996
are not necessarily indicative of the operating results for
the full year.
Certain amounts for preceding periods have been
reclassified for comparability with the 1996 presentation.
2. Inventory
Inventories are comprised of the following:
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C>
June 30, December 31,
1996 1995
Raw materials $ 5,490,471 $ 5,603,277
Work-in-process 22,096,865 21,327,076
Finished goods 4,385,855 4,803,917
Supplies 1,914,380 1,775,374
$ 33,887,571 $ 33,509,644
</TABLE>
3. Net Income Per Common Share
Net income per common share is computed on the basis of a
weighted number of shares of Ampco-Pittsburgh Corporation's
common stock outstanding, which has remained unchanged at
9,577,621 shares, for the periods presented.
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AMPCO-PITTSBURGH CORPORATION
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Operations for the Six and Three Month
Periods Ended June 30, 1996 and 1995
Net sales for the six and three month periods of 1996 were
$81,865,000 and $40,767,000 compared to $70,151,000 and
$36,548,000 for the same periods of the prior year. Excluding
the impact of the previous year acquisitions of Buffalo Air
Handling and Bimex Industries, which were not included for the
full 1995 periods, sales increased approximately 4% for the
1996 first half and second quarter compared to the prior year.
The increase reflects principally continued growth of export
sales. The order backlog at June 30, 1996 was $110,000,000
compared to $96,800,000 at December 31, 1995. The growth in
the backlog is due primarily to an increase in forged steel
roll orders.
The cost of products sold relationships for the six and three
months ended June 30, 1996 were 70.7% and 70.0%, respectively.
This compares with the prior comparable periods at 72.2% and
72.5%, respectively. The margin improvement in 1996 resulted
from improved pricing and more favorable product mix, offset
somewhat by lower margin product mix from the acquisitions.
Selling and administrative expenses in 1996 increased by
$2,303,000 for the year-to-date period and $1,043,000 for the
second quarter, both compared to the prior year. Excluding
the impact of the acquisitions, these costs increased by
approximately $900,000 and $600,000, or 10% and 13% for the
first half and second quarter, respectively. This increase is
principally due to increased commission costs on higher sales
and a mix change towards sales on which commission is payable.
The relationship of selling and administrative expenses to net
sales was 14.7% in the first half of 1996 compared to 14.0%
for the comparable period in 1995.
Depreciation expense of $3,150,000 and $1,578,000 for the six
and three months ended June 30, 1996 increased approximately
10% compared to the prior year due principally to the full
period impact of the acquisitions.
Income from operations increased 27% for the six month period
to $8,722,000 and 29% for the three month period to
$4,552,000, both compared to the prior year. These increases
are principally a result of improved margins, offset somewhat
by higher commissions, and the benefit of the prior year
acquisitions.
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The Corporation had net income for the six and three months
ended June 30, 1996 of $5,559,000 and $2,910,000,
respectively. This compares with net income for the prior
year comparable periods of $4,118,000 and $2,006,000,
respectively.
Liquidity and Capital Resources
Net cash flow from operating activities was positive for the
six months ended June 30, 1996 at $5,700,000 and compares with
positive cash flows of $8,756,000 for the comparable period
1995. While income from operations increased by $1,864,000 in
the first half of 1996 compared to 1995, this was offset by a
net cash outflow for working capital and other balance sheet
changes of $6,203,000 in 1996 compared with $774,000 in 1995.
The 1996 period required an increased level of accounts
receivable and inventories to support higher business
activity.
Capital expenditures for 1996 totaled $3,817,000 compared to
$1,948,000 in 1995. Capital appropriations carried forward
from June 30, 1996 total $15,000,000 with the major
expenditure being for expansion of capacity at Union Electric
Steel's plants to be completed by 1998. In July and August
1996, the Corporation completed the sale of two series of tax-
exempt, long-term Industrial Revenue Bonds totalling
$11,236,000. These funds will be drawn down as expenditures
are made for expansion and equipment at Union Electric Steel's
Pennsylvania facilities. Funds generated internally will be
sufficient to finance the balance of the expansion program.
During the second quarter of 1996, the Corporation sold its
remaining shares of Amersham for $582,000, recognizing a small
gain. Net cash outflows from investing activities in 1995
included $11,500,000 for the purchase of Buffalo Air Handling
Company.
Cash outflows with respect to financing activities in 1996
include payment of an additional prior year-end dividend of
$480,000, or $.05 per share.
The Corporation maintains short-term lines of credit and a
revolving credit agreement in excess of the cash needs of its
businesses. The total available at June 30, 1996, exclusive
of the Industrial Revenue Bond financing noted above, was
$14,500,000.
With respect to environmental concerns, the Corporation has
been named a potentially responsible party at certain third
party sites. The Corporation has accrued its share of the
estimated cost of remedial actions it would likely be required
to contribute. In addition, the Corporation has provided for
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environmental clean-up costs related to preparing its
discontinued business facilities for sale. While it is not
possible to quantify with certainty the potential cost of
actions regarding environmental matters, particularly any
future remediation and other compliance efforts, in the
opinion of management, compliance with the present
environmental protection laws and the potential liability for
all environmental proceedings will not have a material adverse
effect on the financial condition, results of operations or
liquidity of the Corporation.
The nature and scope of the Corporation's business brings it
into regular contact with a variety of persons, businesses and
government agencies in the ordinary course of business.
Consequently, the Corporation and its subsidiaries from time
to time are named in various legal actions. The Corporation
does not anticipate that its financial condition, results of
operations or liquidity will be materially affected by the
costs of known, pending or threatened litigation.
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PART II - OTHER INFORMATION
AMPCO-PITTSBURGH CORPORATION
Items 1-4. None
Item 5. Other Information
On July 8, 1996, Registrant issued a press release
announcing that Leonard M. Carroll had been elected
as a Director in the class of directors having a term
which expires in 1999.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
27. Financial Data Schedule
(b) Reports on Form 8-K
None
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<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned thereunto duly authorized.
AMPCO-PITTSBURGH CORPORATION
DATE: August 14, 1996 BY: s/Robert A. Paul
Robert A. Paul
President and
Chief Executive Officer
DATE: August 14, 1996 BY: s/Robert J. Reilly
Robert J. Reilly
Treasurer and Controller
(Principal Financial Officer)
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<TABLE> <S> <C>
<PAGE>
<S> <C>
<ARTICLE> 5
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> JUN-30-1996
<CASH> 16,955,498
<SECURITIES> 4,610,842
<RECEIVABLES> 32,590,516
<ALLOWANCES> 706,354
<INVENTORY> 33,887,571
<CURRENT-ASSETS> 92,828,864
<PP&E> 115,112,466
<DEPRECIATION> 59,655,792
<TOTAL-ASSETS> 171,803,427
<CURRENT-LIABILITIES> 24,153,436
<BONDS> 1,350,000
0
0
<COMMON> 9,577,621
<OTHER-SE> 105,447,077
<TOTAL-LIABILITY-AND-EQUITY> 171,803,427
<SALES> 81,865,465
<TOTAL-REVENUES> 82,052,363
<CGS> 57,905,652
<TOTAL-COSTS> 73,143,625
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 8,908,738
<INCOME-TAX> 3,350,000
<INCOME-CONTINUING> 5,558,738
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 5,558,738
<EPS-PRIMARY> .58
<EPS-DILUTED> .58
</TABLE>
