Ampco-Pittsburgh Subsidiary Announces Customer Contract Win

Rhea-AI Summary

Ampco-Pittsburgh (NYSE: AP) announced that its subsidiary, Buffalo Air Handling Division of Air and Liquid Systems , has secured an $8.7 million order for a custom air handling project from a major pharmaceutical company. This marks the largest order ever received from the pharmaceutical market for Buffalo Air Handling. The order is set to ship in 2025.

David Anderson, President of Air and Liquid Systems, highlighted the pharmaceutical market as a key sector for their custom air handling products. He emphasized the company's recent expansion, including a new manufacturing location in central Virginia opened in summer 2023, to meet increasing demand. Anderson expressed confidence in Buffalo Air Handling's future growth potential, citing its 100-year legacy and recent investments in manufacturing capacity and sales force strengthening.

Positive

• Secured a record $8.7 million order from a major pharmaceutical company
• Expanded manufacturing capacity with a new location in Virginia
• Strengthened sales force over the past two years
• Increasing demand for custom air handling products in the pharmaceutical market

Negative

• Long lead time for order fulfillment (shipping in 2025)

Insights

Financial Analyst

The $8.7 million contract win for Ampco-Pittsburgh's subsidiary is a positive development for the company. This order, slated for delivery in 2025, represents the largest ever from the pharmaceutical sector for Buffalo Air Handling. It's a clear indicator of growing demand and market confidence in their high-end custom products. The company's strategic decision to expand manufacturing capacity in 2023 appears to be paying off, positioning them well to capitalize on increasing market opportunities. While the long lead time to 2025 suggests a complex, custom project, it also provides revenue visibility. However, investors should note that this single order, while significant, may not dramatically alter the company's overall financial picture in the short term.

Market Research Analyst

This contract win signals strong momentum in the pharmaceutical air handling market. The fact that it's Buffalo Air Handling's largest order ever from this sector suggests a potential shift in market dynamics, possibly driven by increased pharmaceutical manufacturing or stringent air quality requirements. The company's mention of "strong order demand" over the past year indicates a broader trend, not just a one-off success. Their proactive capacity expansion in 2023 shows foresight in anticipating and meeting this growing demand. For investors, this could signal a positive long-term outlook for Ampco-Pittsburgh's air handling division, especially if the pharmaceutical sector continues to invest heavily in manufacturing infrastructure.

Industrial Engineering Expert

The $8.7 million order for a custom air handling project underscores the critical importance of specialized HVAC systems in pharmaceutical manufacturing. These systems are essential for maintaining precise environmental conditions and ensuring product quality and regulatory compliance. The long lead time to 2025 suggests a highly complex, custom-engineered solution, which aligns with Buffalo Air Handling's expertise in high-end products. Their 100-year legacy in custom products, combined with recent capacity expansion, positions them well in this niche market. However, investors should consider that such specialized projects often carry higher margins but also increased execution risks. The company's ability to deliver on this flagship project will be important for securing future large-scale orders in the pharmaceutical sector.

CARNEGIE, Pa.--(BUSINESS WIRE)-- Ampco-Pittsburgh Corporation (NYSE: AP) (“Ampco-Pittsburgh”) today announced that the Buffalo Air Handling Division (“Buffalo Air Handling”) of Air and Liquid Systems Corporation (“Air and Liquid Systems”), a wholly owned subsidiary of Ampco-Pittsburgh, has received an $8.7 million order for a custom air handling project for a major pharmaceutical company. The order is expected to ship in 2025.

David Anderson, President of Air and Liquid Systems commented, “The pharmaceutical market is one of the key markets for our custom air handling product line. While we have seen strong order demand from this market over the last year, this is the largest order we have ever received from the pharmaceutical market and shows that companies trust and value the high-end custom products designed and built by Buffalo Air Handling.”

Mr. Anderson continued, “In the summer of 2023, we opened an additional manufacturing location in central Virginia because we saw the demand for our custom air handling products increasing and we made the commitment to our customers that we would increase our manufacturing capacity to meet this rising demand. The increase in manufacturing capacity along with the strengthening of our sales force over the last two years has positioned Buffalo Air Handling to receive significant orders like the one announced today. Buffalo Air Handling has been producing custom products for over 100 years and while we are incredibly proud of our legacy, the best years for Buffalo Air Handling are still to come.”

About Ampco-Pittsburgh Corporation

Ampco-Pittsburgh Corporation manufactures and sells highly engineered, high-performance specialty metal products and customized equipment utilized by industry throughout the world. Through its operating subsidiary, Union Electric Steel Corporation, it is a leading producer of forged and cast rolls for the global steel and aluminum industries. It also manufactures open-die forged products that are sold principally to customers in the steel distribution market, oil and gas industry, and the aluminum and plastic extrusion industries. The Corporation is also a producer of air and liquid processing equipment, primarily custom-engineered finned tube heat exchange coils, large custom air handling systems and centrifugal pumps. It operates manufacturing facilities in the United States, England, Sweden, and Slovenia and participates in three operating joint ventures located in China. It has sales offices in North America, Asia, Europe, and the Middle East. Corporate headquarters is located in Carnegie, Pennsylvania.

FORWARD-LOOKING STATEMENTS

The Private Securities Litigation Reform Act of 1995 (the “Act”) provides a safe harbor for forward-looking statements made by us or on behalf of the Corporation. This press release may include, but is not limited to, statements about operating performance, trends and events that the Corporation may expect or anticipate will occur in the future, statements about sales and production levels, restructurings, the impact from pandemics and geopolitical conflicts, profitability and anticipated expenses, inflation, the global supply chain, future proceeds from the exercise of outstanding warrants, and cash outflows. All statements in this document other than statements of historical fact are statements that are, or could be, deemed “forward-looking statements” within the meaning of the Act and words such as “may,” “will,” “intend,” “believe,” “expect,” “anticipate,” “estimate,” “project,” “target,” “goal,” “forecast” and other terms of similar meaning that indicate future events and trends are also generally intended to identify forward-looking statements. Forward-looking statements speak only as of the date on which such statements are made, are not guarantees of future performance or expectations, and involve risks and uncertainties. For the Corporation, these risks and uncertainties include, but are not limited to: economic downturns, cyclical demand for our products and insufficient demand for our products; excess global capacity in the steel industry; limitations in availability of capital to fund our strategic plan; inability to maintain adequate liquidity to meet our operating cash flow requirements, repay maturing debt and meet other financial obligations; fluctuations in the value of the U.S. dollar relative to other currencies; increases in commodity prices or insufficient hedging against increases in commodity prices, reductions in electricity and natural gas supply or shortages of key production materials for us or our customers; inability to obtain necessary capital or financing on satisfactory terms to acquire capital expenditures that may be necessary to support our growth strategy; inoperability of certain equipment on which we rely; inability to execute our capital expenditure plan; liability of our subsidiaries for claims alleging personal injury from exposure to asbestos-containing components historically used in certain products of our subsidiaries; changes in the existing regulatory environment; inability to successfully restructure our operations and/or invest in operations that will yield the best long-term value to our shareholders; consequences of pandemics and geopolitical conflicts; work stoppage or another industrial action on the part of any of our unions; inability to satisfy the continued listing requirements of the New York Stock Exchange or the NYSE American Exchange; potential attacks on information technology infrastructure and other cyber-based business disruptions; failure to maintain an effective system of internal control; and those discussed more fully elsewhere in Item 1A, Risk Factors, in Part I of the Corporation’s latest Annual Report on Form 10-K and Part II of the latest Quarterly Report on Form 10-Q. The Corporation cannot guarantee any future results, levels of activity, performance or achievements. In addition, there may be events in the future that it is not able to predict accurately or control which may cause actual results to differ materially from expectations expressed or implied by forward-looking statements. Except as required by applicable law, the Corporation assumes no obligation, and disclaims any obligation, to update forward-looking statements whether as a result of new information, events or otherwise.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240912052326/en/

Michael G. McAuley

Senior Vice President, Chief Financial Officer and Treasurer

(412) 429-2472

mmcauley@ampcopgh.com

Source: Ampco-Pittsburgh Corporation

FAQ

What is the value of the new order received by Ampco-Pittsburgh's subsidiary?

Ampco-Pittsburgh's subsidiary, Buffalo Air Handling Division, received an $8.7 million order for a custom air handling project from a major pharmaceutical company.

When is the new $8.7 million order expected to ship for Ampco-Pittsburgh (NYSE: AP)?

The $8.7 million order received by Ampco-Pittsburgh's subsidiary is expected to ship in 2025.

What recent expansion has Buffalo Air Handling Division of Ampco-Pittsburgh (NYSE: AP) undertaken?

In the summer of 2023, Buffalo Air Handling opened an additional manufacturing location in central Virginia to increase its manufacturing capacity and meet rising demand.

Which market segment provided the largest order for Buffalo Air Handling, a subsidiary of Ampco-Pittsburgh (NYSE: AP)?

The pharmaceutical market provided the largest order ever received by Buffalo Air Handling, a subsidiary of Ampco-Pittsburgh.