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YoY shift: Neutral
Year-over-year tone shift - average net-tone change across Risk Factors and MD&A vs the prior 10-K. This filing is -0.10pp more bearish than last year's.
Why YoY instead of absolute: the LM lexicon has ~6.6× more negative words than positive (legal/risk-disclosure language is heavy on hedging), so every 10-K reads bearish on raw tone. Year-over-year change strips that bias and surfaces the actual shift in management's framing.
Tone shift by section
The two components the gauge averages: how Risk Factors and MD&A each shifted in net tone versus last year's 10-K. The headline above is their average, so a green needle over a soft section just means the other section carried it.
Risk Factors
-
Not scored
Net-tone change vs last year's 10-K.
MD&A
-0.10pp
Flat
Net-tone change vs last year's 10-K.
Per-snippet highlights
Sentence-level sentiment highlighting with category and subcategory filters is coming once the snippet-scoring pipeline lands. For now, dig into the actual section text on the Sections tab.
No section text extracted for this filing. The 10-K may use a non-standard template that the parser doesn't recognize - the original doc is still linked in the Stats tab.
Language change vs prior 10-K
MD&A (Item 7) - words with the biggest YoY frequency increase
Negative rising
loss+31
insolvency+29
losses+9
closure+4
unpredictable+3
Positive rising
benefit+6
effective+5
benefited+3
improve+2
advances+2
MD&A (Item 7)
33,892 words
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(in thousands, except per share amounts)
THE BUSINESS
Ampco-Pittsburgh Corporation and its subsidiaries (collectively, the “Corporation”) manufacture and sell highly engineered, high-performance specialty metal products and customized equipment utilized by industry throughout the world. It operates in two business segments: the Forged and Cast Engineered Products (“FCEP”) segment and the Air and Liquid Processing (“ALP”) segment. This segment presentation is consistent with how the Corporation’s chief operating decision maker evaluates financial performance and makes resource allocation and strategic decisions about the business.
The FCEP segment produces forged hardened steel rolls, cast rolls and forged engineered products (“FEP”). Forged hardened steel rolls are used primarily in hot and cold rolling mills by producers of steel, aluminum and other metals. Cast rolls, which are produced in a variety of iron and steel qualities, are used mainly in hot strip mills, medium/heavy section mills, roughing mills, and plate mills. FEP principally are sold to customers in the steel distribution market, the oil and gas industry, and the aluminum and plastic extrusion industries. The segment has operations in the United States, Sweden, Slovenia, and an equity interest in two joint venture companies in China. Collectively, the segment primarily competes with European, Asian, and North and South American companies in both domestic and foreign markets and operates several sales offices located throughout the world.
The ALP segment includes Aerofin, Buffalo Air Handling and Buffalo Pumps, all divisions of Air & Liquid Systems Corporation (“Air & Liquid”), a wholly owned subsidiary of the Corporation. Aerofin produces custom-engineered finned tube heat exchange coils and related heat transfer products for a variety of industries including original equipment manufacturers and commercial, nuclear power generation and industrial manufacturing. Buffalo Air Handling produces large custom-designed air handling systems for institutional (e.g., hospital, university), pharmaceutical and general industrial building markets. Buffalo Pumps manufactures centrifugal pumps for the fossil-fueled power generation, marine defense and industrial refrigeration industries. The segment has operations in Virginia and New York with its headquarters in Carnegie, Pennsylvania. The segment utilizes an independent group of sales offices located throughout the United States and Canada.
EXIT AND DECONSOLIDATION CHARGES
In February 2025, Union Electric Steel UK Limited (“UES-UK”), an indirect wholly owned subsidiary of the Corporation, entered into a formal consultation process with its unions and staff to evaluate various options to improve its profitability. The U.K. operations had been impacted by unpredictable and high energy costs compared to its foreign competitors, lower demand for its products manufactured in the U.K., and increased imports of rolls and flat rolled steel into Europe from low-cost countries. UES-UK completed its formal consultation process in the second quarter of 2025 and, in light of UES-UK's historical performance and management's outlook for the remainder of 2025 and subsequent years, decided to exit its operations.
The Corporation initially recognized charges approximating $10,790 primarily for employee-related costs payable to the employees of UES-UK under existing benefit plans and accelerated depreciation from reducing the estimated remaining useful lives and revising the estimated residual values of the property, plant and equipment of UES-UK. These charges include similar closure costs approximating $800 for the non-core steel distribution facility located in Ohio held by Alloys Unlimited and Processing, LLC (“AUP”) (collectively, the “Exit Charges”).
The Exit Charges included the following components:
Type of Cost
Location of Cost
in Statement of Operations
For the Year Ended
December 31, 2025
Employee-related costs
Severance charge
Accelerated depreciation
Depreciation and amortization
Professional fees
Selling and administrative
Loss on sale of assets
Loss on disposal of assets
Other
Costs of products sold (excluding depreciation and amortization)
Total Exit Charges
The charge for employee-related costs primarily represents statutory severance and other benefits payable to the approximately 168 employees of UES-UK and the 15 employees of AUP under existing benefit plans. Accelerated depreciation is a non-cash charge and represents primarily higher depreciation expense resulting from reducing the estimated remaining useful lives and revising the estimated residual values of the property, plant and equipment of UES-UK and AUP. Professional fees represent direct costs incurred relating to the formal consultation process for and Structured Insolvency of UES-UK and closure of AUP. Loss on sale of assets is a non-cash charge and represents the loss on the sale of the equipment of AUP.
On October 13, 2025, the Directors of UES-UK voluntarily filed a Notice of Intention to appoint certain insolvency practitioners of FRP Advisory Trading Limited (“FRP”) as administrators of UES-UK (collectively, the “Administrators”) pursuant to the requirements of the Insolvency Act 1986 of England and Wales in the High Court of Justice, Business and Property Courts at Leeds (the “Insolvency Court”). On October 14, 2025, (the “Filing Date”), the Directors of UES-UK filed a Notice of Appointment with the Insolvency Court formally appointing the Administrators as administrators of UES-UK. This action was confined to UES-UK exclusively and did not affect the Corporation or any of its other subsidiaries.
As of the Filing Date, through the date of this Annual Report on Form 10-K, UES-UK was in administration and its affairs, business and property were being managed by the Administrators (the “Structured Insolvency”). The Administrators have set out their proposals to UES-UK’s creditors which include an orderly wind-down of UES-UK’s financial affairs and sale of its assets. Any funds remaining after the costs and expenses associated with the Structured Insolvency will be distributed in the order of priority set forth in the Insolvency Act 1986.
Through October 13, 2025, the date immediately prior to the Filing Date, the operating results of UES-UK are included in the consolidated operating results of the Corporation. Effective as of the Filing Date, the Corporation no longer consolidates the operating results of UES-UK, as the Corporation no longer has decision-making control over UES-UK. In addition, as of the Filing Date, the Corporation recognized a non-cash charge of $41,424 to (i) write-down the carrying value of its investment in UES-UK to its estimated fair value; (ii) recognize the amount of other comprehensive losses of UES-UK deferred in accumulated other comprehensive loss and (iii) establish an estimated recovery for the amount of funds expected to be returned to the lenders under the Corporation's Second Amended and Restated Revolving Credit, Term Loan and Security Agreement (the “Credit Agreement”), if any, after the costs and expenses of the Structured Insolvency (the “Deconsolidation Charge”). The majority of the severance charges included in the Exit Charges will no longer be required to be paid as a result of the Structured Insolvency. In addition, the Corporation expects its future cash expenditures associated with the Structured Insolvency to be insignificant. See Note 2 , Exit and Deconsolidation Charges , to the Consolidated Financial Statements.
EXECUTIVE OVERVIEW
For the FCEP segment, global steel manufacturing capacity continues to exceed global consumption of steel products. Demand for steel is soft but stable. In 2025, as a result of low-priced products from other countries entering the United States, tariffs, as outlined under Section 232 of the Trade Expansion Act of 1962, were increased for products with domestic melt and pour requirements imported into the United States. In addition, in the third quarter of 2025, the U.S. government announced new tariffs on coated steel imported into the United States. According to U.S. Census Bureau and U.S. Commerce Department data, imports for 2025 have decreased when compared to 2024 with import reductions accelerating as the year progressed. This should result in increased utilization of our customers' domestic facilities. Similarly, we believe modified tariff and quota systems have been strengthened in Canada and Mexico to support their steel industries, which also should result in better utilization for our customers located in these countries.
Tariffs are also now incurred on forged and cast rolls shipped from the segment's European facilities into the United States and on U.S. forged and cast rolls shipped into China. Since the cast roll market is currently underserved in the United States, the Corporation believes the segment's remaining European cast operations are approximately on equal footing with its competition with respect to tariffs. Tariffs on steel product also have been a tailwind for the segment's FEP products resulting in increased order volumes. Negotiations with our customers have been successful, resulting in the vast majority of these costs being passed on to our customers.
The local currency of each of the subsidiaries of the FCEP segment is its functional (local) currency. Each of these subsidiaries may enter into contractual arrangements with customers or vendors which may be denominated in a currency other than its functional (local) currency. Currently, the Corporation does not hedge any of its foreign-denominates sales or purchases. Accordingly, changes in foreign currency exchange rates, between the date the underlying contract is executed and the date the revenue or costs are recognized and from year to year, will affect the value of reported sales and operating results. During the year, the FCEP segment was adversely affected by movement in the global foreign currency exchange market resulting in lower functional (local) currency sales and operating results when compared to the prior year, particularly for its operations in Sweden.
The primary focus for the FCEP segment for 2026 is to improve its profitability by maintaining a strong position in the roll market and continuing to improve operational efficiency and equipment reliability following the completion of a significant capital equipment program during the second quarter of 2024.
For the ALP segment, the businesses are benefiting from increased demand in the power generation and U.S. military markets and have successfully increased market share but continue to face increasing production costs due to inflation. The segment has been implementing price increases for its products to help mitigate these inflationary effects. Following previous U.S. government actions, tariffs are incurred on certain of the segment's raw materials, primarily those that contain copper or copper alloys. Costs associated with these tariffs have been, and are expected to continue to be, passed on to customers. Tariff outcomes are fluid and subject to change; however, the United States's onshoring of additional manufacturing capabilities would potentially increase demand for the segment's products. The primary focus for the ALP segment for 2026 is to grow revenues, monitor and minimize inflationary and tariff effects, strengthen engineering and manufacturing capabilities to keep pace with growth opportunities, and continue to improve its sales distribution network.
The Corporation is actively monitoring, and will continue to actively monitor, changes prompted by the U.S. government, repercussions from the Middle East conflicts and similar geopolitical matters, economic conditions, and other developments relevant to its business, including the potential impact on its operations, financial condition, liquidity, suppliers, industry, and workforce.
CONSOLIDATED RESULTS OF OPERATIONS OVERVIEW
The Corporation
Net Sales:
Forged and Cast Engineered Products
Air and Liquid Processing
Consolidated
(Loss) Income from Operations:
Forged and Cast Engineered Products (1)
Air and Liquid Processing (2)
Corporate costs
Consolidated
Backlog:
Forged and Cast Engineered Products
Air and Liquid Processing
Consolidated
(Loss) income from operations for the FCEP segment includes the Deconsolidation Charge of $41,424 and the Exit Charges of $10,790, as more fully explained in Note 2 , Exit and Deconsolidation Charges, to the Consolidated Financial Statements.
(Loss) income from operations for the ALP segment includes a net charge (benefit) for asbestos-related items of $12,352 and $(4,184) in 2025 and 2024, respectively, as more fully explained in Note 20 , Litigation, to the Consolidated Financial Statements.
Net sales equaled $434,166 and $418,305 for 2025 and 2024, respectively, an increase of $15,861. While net sales for both of the segments improved, the majority of the increase is attributable to the ALP segment. A discussion of sales by segment is included below.
(Loss) income from operations equaled $(54,479) and $12,169 for 2025 and 2024, respectively. Loss from operations for 2025 includes the Deconsolidation Charge of $41,424 to (i) write-down the Corporation investment in UES-UK to its estimated fair value; (ii) recognize the other comprehensive losses of UES-UK deferred in accumulated other comprehensive loss; and (iii) establish an estimated recovery for the amount of funds expected to be returned to the lenders under the Credit Agreement, if any, after the costs and expenses of the Structured Insolvency. The estimated recovery was based on the Corporation's assessment of the expected
recovery from the Structured Insolvency proceedings including consideration of information provided by the Administrators. The Corporation has evaluated, and will continue to evaluate, the continued appropriateness of the estimated recovery. If it is determined the estimated recovery is lower than currently estimated, then a charge to net (loss) income would be recorded. Similarly, if it is determined the estimated recovery is higher than currently estimated, then a credit to net (loss) income would be recorded. Any recovery will be distributed in the order of priority set forth in the Insolvency Act 1986.
In addition, loss from operations for 2025 includes:
Charge of $12,352 associated with the increase in the estimated costs of pending and future asbestos claims net of additional insurance recoveries offset by a reduction in the estimated defense-to-indemnity cost ratio from 55% to 50% (the “Asbestos-Related Charge”);
The Exit Charges for severance and related costs associated with exiting the Corporation's U.K. and AUP operations of approximately $10,790; and
Employee-retention credits, which are refundable employer payroll taxes for certain eligible businesses affected by the COVID-19 pandemic, of $735 received from the Internal Revenue Service during the second quarter of 2025 (the “Employee-Retention Credits”) for the FCEP ($456) and ALP ($279) segments.
By comparison, included in income from operations for 2024 is a:
Credit of $4,101 associated with the decrease in the estimated costs of pending and future asbestos claims net of additional insurance recoveries and a reduction in the estimated defense-to-indemnity cost ratio from 60% to 55% (the “Asbestos-Related Credit”) and
Credit of $83 for proceeds received from an insolvent asbestos-related insurance carrier (the “Asbestos-Related Proceeds”).
A discussion of (loss) income from operations for the Corporation’s two segments is included below. Corporate costs decreased in 2025, when compared to 2024, by $2,238, primarily due to lower employee incentive-related costs.
Backlog equaled $328,937 at December 31, 2025 versus $378,884 as of December 31, 2024. Backlog represents the accumulation of firm orders on hand which: (i) are supported by evidence of a contractual arrangement, (ii) include a fixed and determinable sales price, (iii) have collectability that is reasonably assured, and (iv) generally are expected to ship within two years from the backlog reporting date. Backlog at a certain date may not be a direct measure of future revenue for a particular order because price increases, negotiated subsequently to the original order, are not included in backlog until the updated contract is received from the customer, certain surcharges are not determinable until the order is completed and ready for shipment to the customer, and certain orders are denominated in currency other than the functional (local) currency of the subsidiary and are not hedged. Approximately 6% of the backlog is expected to be released after 2026. A discussion of backlog by segment is included below.
Gross margin, excluding depreciation and amortization , as a percentage of net sales was 18.4% and 19.5% for 2025 and 2024, respectively. For the FCEP segment, gross margin, excluding depreciation and amortization, decreased when compared to the prior year, primarily as a result of lower absorption and changes in product mix. For the ALP segment, gross margin, excluding depreciation and amortization, improved when compared to the prior year, primarily as a result of higher production volumes and a favorable product mix.
Selling and administrative expenses approximated $52,125 (12.0% of net sales) and $54,878 (13.1% of net sales) for 2025 and 2024, respectively. The decrease of $2,753 is principally due to lower employee incentive-related costs offset by higher professional fees.
Depreciation and amortization expense equaled $21,785 and $18,611 for 2025 and 2024, respectively. The increase of $3,174 is primarily attributable to the $3,327 of accelerated depreciation resulting from reducing the estimated remaining useful lives and revising the estimated residual values of the property, plant and equipment of UES-UK and AUP.
Charge (credit) for asbestos-related costs equaled $12,352 and $(4,184) for 2025 and 2024, respectively.
The charge for 2025 represents:
An increase in the estimated settlement costs of pending and future asbestos claims, net of additional insurance recoveries, of $14,525 primarily as a result of recent experience; offset by
A reduction in the estimated defense-to-indemnity cost ratio from 55% to 50%, based on ongoing experience and improvements in defense costs that are expected to continue, which reduced estimated costs by approximately $2,173.
The credit for 2024 represents the net of:
A decrease in the estimated settlement costs of pending and future asbestos claims, net of additional insurance recoveries, of $366 primarily as a result of recent experience;
A reduction in the estimated defense-to-indemnity cost ratio from 60% to 55%, based on ongoing experience and improvements in defense costs that are expected to continue, which reduced estimated costs by approximately $3,735; and
Asbestos-Related Proceeds of $83.
See Note 20 , Litigation , to the Consolidated Financial Statements.
Deconsolidation Charge represents the non-cash charge to (i) write-down the carrying value of the Corporation's investment in UES-UK to its estimated fair value; (ii) recognize the amount of other comprehensive losses of UES-UK deferred in accumulated other comprehensive loss and (iii) establish an estimated recovery for the amount of funds expected to be returned to the lenders under the Credit Agreement, if any, after the costs and expenses of the Structured Insolvency.
Severance charge represents primarily statutory severance and other benefits payable to the approximately 168 employees of UES-UK and the 15 employees of AUP under existing benefit plans.
Interest expense equaled $11,369 and $11,620 for 2025 and 2024, respectively. The net decrease of $251 is principally due to:
For the Year Ended
December 31, 2025
Lower average interest rates - primarily revolving credit facility
Lower average borrowings outstanding
Interest on Equipment Term Notes
Effect from capitalizing interest in the prior year
Other
Other income – net for 2025 decreased when compared to 2024 principally due to the lower net pension and other postretirement income resulting from a lower expected return on plan assets in 2025 versus 2024.
Change
Net pension and other postretirement income
Losses on foreign exchange transactions
Investment and interest income
Unrealized gains on Rabbi trust investments
Other
Income tax provision equaled $120 and $2,695 for 2025 and 2024, respectively, and includes income taxes associated with the Corporation’s profitable operations. An income tax benefit is not able to be recognized on losses of certain of the Corporation’s entities since it is “more likely than not” the asset will not be realized. Accordingly, changes in the income tax provision for each period includes the effects of changes in the pre-tax income of the Corporation’s profitable operations in each jurisdiction and changes in expectations as to whether an income tax benefit will be able to be realized for the deferred income tax assets recognized.
The income tax provision for 2025 benefited from a lower statutory income tax rate on the earnings of the Corporation's majority-owned Chinese joint venture as a result of the joint venture qualifying as a high-tech enterprise (“HTE”). As an HTE, the earnings of the Chinese joint venture are taxed at a rate of 15% (versus 25%). The effect on the income tax provision was a benefit of $1,000 for the year ended December 31, 2025, when compared to the income tax provision for the year ended December 31, 2024.
The income tax provision for 2025 includes a state income tax benefit of approximately $494 associated with the Asbestos-Related Charge whereas the income tax provision for 2024 includes state income tax expense of approximately $153 associated with the Asbestos-Related Credit.
Valuation allowances are recorded against the majority of the Corporation’s deferred income tax assets. The Corporation will maintain the valuation allowances until there is sufficient evidence to support the reversal of all or some portion of the valuation allowances. Given the Corporation’s anticipated future earnings from operations in Sweden, due in part to the movement of cast roll production from the U.K. to Sweden, and in the United States, the Corporation believes there is a reasonable possibility within the next 12
months, sufficient positive evidence may become available to allow the Corporation to conclude some portion of the valuation allowance will no longer be needed. Release of any portion of the valuation allowance would result in the recognition of deferred income tax assets on the Corporation’s consolidated balance sheet and a decrease to the Corporation’s income tax expense in the period the release is recorded. The exact timing and the amount of the valuation allowance released are subject to, among many items, the level of profitabilityachieved. Once the valuation allowance is completely reversed, a tax provision would be recognized on earnings.
On July 4, 2025, the One Big Beautiful Bill Act (“OBBBA”) was enacted in the United States. OBBBA introduces multiple tax law and legislative changes, including modifications to income tax provisions such as business interest expense limitations, domestic research and development expenses and U.S. taxation of international earnings. It also reinstates 100% bonus depreciation for property acquired and placed into service on or after January 19, 2025. The Corporation has recognized the effects of the OBBBA provisions in its financial results to the extent they are applicable for the year ended December 31, 2025. Certain provisions of the OBBBA have effective dates after December 31, 2025. The Corporation will continue to evaluate the impact of these provisions on its future consolidated financial statements.
Net (loss) attributable to Ampco-Pittsburgh was approximately $(66,067) or $(3.28) per common share for 2025. Net loss attributable to Ampco-Pittsburgh and net loss per common share attributable to Ampco-Pittsburgh for 2025 include a net after-tax charge of $63,348 or $3.15 per common share associated with the Deconsolidation Charge, the Exit Charges, the Asbestos-Related Charge, and the Employee-Retention Credits. No income tax benefit was able to be recognized for the Deconsolidation Charge or the Exit Charges since the underlying operations remained in a three-year cumulative loss position as of December 31, 2025. The income tax benefit resulting from the Corporation's majority-owned Chinese joint venture qualifying as an HTE of approximately $1,000 reduced the net loss attributable to Ampco-Pittsburgh and net loss per common share attributable to Ampco-Pittsburgh by approximately $598, or $0.03 per common share, for 2025.
Net income attributable to Ampco-Pittsburgh was approximately $438 or $0.02 per common share for 2024. Net income attributable to Ampco-Pittsburgh and net income per common share attributable to Ampco-Pittsburgh for 2024 include a net after-tax credit of $4,031 or $0.20 per common share associated with the Asbestos-Related Credit and the Asbestos-Related Proceeds.
Forged and Cast Engineered Products
Change
Net sales:
Forged and cast mill rolls
FEP
Operating (loss) income
Backlog:
Forged and cast mill rolls
FEP
Net sales increased by $6,043 in 2025 from 2024 principally due to:
Improved pricing, including variable-index surcharges passed through to customers as a result of fluctuations in the price of raw material, energy and transportation cost, which increased net sales in 2025 when compared to 2024 by approximately $9,400;
Higher volume of FEP shipments, which increased net sales in 2025 when compared to 2024 by approximately $3,100; and
Changes in exchange rates used to translate net sales of the segment’s foreign subsidiaries into the U.S. dollar, which increased net sales in 2025 when compared to 2024 by approximately $4,400; offset by
Lower volume of roll shipments, which decreased net sales in 2025 when compared to 2024 by approximately $10,900.
The operating loss for 2025 includes the Deconsolidation Charge of $41,424 and the Exit Charges of $10,790. In addition, operating results for 2025 when compared to 2024 included:
Improved pricing, including variable-index surcharges, and fluctuations in manufacturing costs, which improved operating results by approximately $9,100; and
Lower selling and administrative expenses, principally due to lower employee-related costs, which improved operating results in 2025 when compared to 2024 by approximately $1,000; and
Employee-Retention Credits of $456 for 2025; offset by
Negative absorption and lower margin, which adversely impacted operating results in 2025 when compared to 2024 by approximately $7,400; and
Net lower volume of shipments, which decreased operating results in 2025 when compared to 2024 by approximately $5,800.
Backlog equaled $208,604 at December 31, 2025 and $250,530 at December 31, 2024, a decrease of $41,926 principally due to:
Lower backlog for rolls principally due to softer demand, which decreased backlog at December 31, 2025 when compared to backlog at December 31, 2024 by approximately $65,300; offset by
Higher foreign exchange rates used to translate the backlog of the Corporation’s foreign subsidies into the U.S. dollar, which increased backlog at December 31, 2025 when compared to backlog at December 31, 2024 by approximately $14,700; and
Higher backlog for FEP resulting primarily from market recovery, which increased backlog at December 31, 2025 when compared to backlog at December 31, 2024 by approximately $8,600.
At December 31, 2025, approximately 6% of the backlog is expected to ship after 2026.
Air and Liquid Processing
Change
Net sales:
Air handling systems
Heat exchange coils
Centrifugal pumps
Operating income (1)
Backlog
For 2025, includes a net charge of $12,352 for the Asbestos-Related Charge. For 2024, includes a net benefit of $(4,184) for the Asbestos-Related Credit and the Asbestos-Related Proceeds. See Note 20 , Litigation, to the Consolidated Financial Statements for further information.
The increase in net sales for 2025, when compared to the prior year, is primarily due to:
Higher net sales of air handling systems primarily due to improved demand, resolution of prior year supply chain disruption, and additional capacity provided by a second assembly facility which became fully functional during 2024.
Higher net sales of heat exchange coils primarily due to:
Higher volume of shipments to customers in the nuclear industry of approximately $4,800; and
Higher volume of shipments to customers in the commercial industry of approximately $1,100; offset by
Lower volume of shipments to original equipment manufacturers and fossil-utility customers of approximately $2,700.
Higher net sales of centrifugal pumps primarily due to:
Higher volume of shipments of replacement pumps and parts of approximately $11,500 offset by
Lower volume of shipments of new pump sets of approximately $8,500.
Operating results decreased by $13,713 in 2025 when compared to 2024 primarily due to higher asbestos-related costs of $16,536. Operating results for 2025 include the Asbestos-Related Charge of $12,352 whereas operating results for 2024 include the Asbestos-Related Credit of $4,101 and the Asbestos-Related Proceeds of $83. See Note 20 , Litigation, to the Consolidated Financial Statements for further discussion.
In addition, the change in operating results from the prior year includes:
Higher volume of sales and favorable changes in product mix, which improved operating results in 2025 when compared to 2024 by approximately $2,900; and
Employee-Retention Credits of $279 for 2025; offset by
Higher selling and administrative costs, including higher commissions associated with the increase in the volume of sales of air handling units, which reduced operating results in 2025 when compared to 2024 by approximately $300; and
Higher depreciation costs of approximately $100 associated with the capital investment at the second assembly facility.
Backlog at December 31, 2025 decreased $8,021 from December 31, 2024 primarily due to the U.S. Navy’s decision to terminate production of the Constellation Frigate program, which resulted in $7,100 of orders being removed from backlog toward the latter part of 2025. Costs related to the terminated orders are expected to be paid by the U.S. Navy along with normal profit margins. Backlog for air handlers and heat exchange coils decreased slightly at December 31, 2025 when compared to December 31, 2024. At December 31, 2025, approximately 6% of the backlog is expected to ship after 2026.
Non-GAAP Financial Measures
The Corporation presents non-GAAP adjusted EBITDA and non-GAAP adjusted income (loss) from operations. Non-GAAP adjusted EBITDA is calculated as net (loss) income excluding interest expense, other income - net, income tax provision, depreciation and amortization, and stock-based compensation along with significant charges or credits that are one-time charges or credits, unrelated to the Corporation’s ongoing results of operations, or beyond its control. Non-GAAP adjusted income (loss) from operations is calculated as (loss) income from operations excluding depreciation and amortization and stock-based compensation along with significant charges or credits that are one-time charges or credits, unrelated to a segment’s or the Corporation's ongoing results of operations, or beyond its control. These non-GAAP financial measures were adjusted to exclude the Asbestos-Related Charge (Credit), the Asbestos-Related Proceeds, the Deconsolidation Charge, the Exit Charges, and the Employee-Retention Credits. This non-GAAP financial measure is not based on any standardized methodology prescribed by accounting principles generally accepted in the United States of America (“GAAP”) and may not be comparable to similarly titled measures presented by other companies.
Beginning in 2025, the Corporation began presenting non-GAAP adjusted EBITDA along with non-GAAP adjusted income (loss) from operations. These measures are key measures used by the Corporation's management and Board of Directors to understand and evaluate the operating performance of the Corporation and its segments. While these non-GAAP measures may not be directly comparable to similarly titled measures presented by other companies, the Corporation's management and Board of Directors believe these non-GAAP measures enhance comparability to companies in its stated industry peer group. Additionally, a portion of the incentive and compensation arrangements for certain employees is based on the Corporation’s business performance. The Corporation believes these non-GAAP financial measures help identify underlying trends in its business that otherwise could be masked by the effect of these items it excludes from adjusted EBITDA and adjusted income (loss) from operations. The Corporation also believes these non-GAAP financial measures provide useful information to management, shareholders and investors, and others in understanding and evaluating its operating results, enhancing the overall understanding of its past performance and future prospects and allowing for greatertransparency with respect to key financial metrics used by the Corporation’s management in its financial and operational decision-making. In particular, the Corporation believes the exclusion of the Asbestos-Related Charge (Credit), the Asbestos-Related Proceeds, the Deconsolidation Charge, the Exit Charges, and the Employee-Retention Credits can provide a useful measure for period-to-period comparisons of the Corporation’s core business performance.
Non-GAAP adjusted EBITDA and non-GAAP adjusted income (loss) from operations are not prepared in accordance with GAAP and should not be considered in isolation of, or as an alternative to, measures prepared in accordance with GAAP. There are limitations related to the use of non-GAAP adjusted EBITDA, rather than net (loss) income, or non-GAAP adjusted income (loss) from operations, rather than (loss) income from operations, which are the nearest GAAP equivalents. Among other things, there can be no assurance that additional expenses similar to the Asbestos-Related Charge, the Deconsolidation Charge and the Exit Charges or additional benefits similar to the Asbestos-Related Credit, the Asbestos-Related Proceeds and the Employee-Retention Credits will not occur in future periods.
The adjustments reflected in non-GAAP adjusted income (loss) from operations are pre-tax. The net tax (benefit) expense associated with the adjustments is approximately $(483) for 2025 and $153 for 2024. No income tax benefit was able to be recognized for the Deconsolidation Charge or the Exit Charges since the underlying operations remained in a three-year cumulative loss position as of December 31, 2025.
The following is a reconciliation of net (loss) income to non-GAAP adjusted EBITDA for 2025 and 2024, respectively:
Income (loss) from operations, as adjusted (Non-GAAP)
Depreciation and amortization for 2025 includes accelerated depreciation of $3,327.
The accelerated depreciation portion of the Exit Charges of $3,327 is included in depreciation and amortization.
Corporate represents the operating expense of the corporate office and other costs not allocated to the various segments.
LIQUIDITY AND CAPITAL RESOURCES
Change
Net cash flows provided by operating activities
Net cash flows used in investing activities
Net cash flows provided by (used in) financing activities
Effect of exchange rate changes on cash and cash equivalents
Net (decrease) increase in cash and cash equivalents
Cash and cash equivalents at beginning of period
Cash and cash equivalents at end of period
Net cash flows provided by operating activities equaled $1,344 and $18,028 for 2025 and 2024, respectively, with the decrease primarily due to a change in customer-related liabilities (principally customer deposits) of approximately $14,160. In addition, net cash flows provided by operating activities for the prior year benefited from the reimbursement of asbestos-related costs of approximately $1,756 from a previously unsettled insurance carrier. See Note 20 , Litigation , to the Consolidated Financial Statements.
Trade receivables at December 31, 2025 increased by approximately $8,900 when compared to trade receivables at December 31, 2024 primarily due to:
Higher sales in November and December of 2025 versus November and December of 2024, which increased trade receivables at December 31, 2025 when compared to December 31, 2024 by approximately $10,800;
Higher exchange rates used to translate the trade receivables of the Corporation's foreign subsidiaries into the U.S. dollar, which increased trade receivables at December 31, 2025 when compared to December 31, 2024 by approximately $2,500; and
Deconsolidation of UES-UK, which reduced accounts receivable at December 31, 2025 by approximately $4,200 when compared to December 31, 2024.
Inventories at December 31, 2025 decreased by approximately $(12,300) when compared to inventories at December 31, 2024 primarily due to:
Deconsolidation of UES-UK, which reduced inventories at December 31, 2025 by approximately $10,300 when compared to December 31, 2024; and
Lower levels of raw materials and in-process inventory, particularly for the ALP segment, which reduced inventories at December 31, 2025 when compared to December 31, 2024 by approximately $6,400; offset by
Higher exchange rates used to translate the inventories of the Corporation's foreign subsidiaries into the U.S. dollar, which increased inventories at December 31, 2025 when compared to December 31, 2024 by approximately $4,300.
Accounts payable at December 31, 2025 increased by approximately $11,400 when compared to accounts payable at December 31, 2024 primarily due to:
Timing of payments;
Higher exchange rates used to translate the accounts payable of the Corporation’s foreign subsidiaries into the U.S. dollar, which increased accounts payables at December 31, 2025 when compared to December 31, 2024 by approximately $2,000; and
Higher payables for property, plant and equipment of approximately $1,186 at December 31, 2025 versus December 31, 2024; offset by
Deconsolidation of UES-UK, which reduced accounts payable at December 31, 2025 by approximately $3,100 when compared to December 31, 2024.
Although the Corporation recorded the Asbestos-Related Charge (Credit) in 2025 and 2024, these were non-cash charges (credits) and, accordingly, did not impact net cash flows provided by operating activities. Instead, net asbestos-related payments equaled $8,654 in 2025 and, prior to reimbursement of asbestos-related costs from a previously unsettled insurance carrier, equaled $8,292 in 2024. Net asbestos-related payments are expected to approximate $9,000 in 2026 and are expected to continue in the foreseeable future. The amount of asbestos-related payments and corresponding insurance recoveries are difficult to predict and can vary based on a number of factors, including changes in assumptions, as outlined in Note 20 , Litigation, to the Consolidated Financial Statements.
Contributions to the defined benefit pension and other postretirement benefit plans equaled $4,595 and $6,978 in 2025 and 2024, respectively. Contributions to the defined benefit pension and other postretirement benefit plans are expected to approximate $3,800 in 2026, $2,700 in 2027, $2,700 in 2028, $2,000 in 2029, and $1,700 in 2030.
Net cash flows used in investing activities equaled $(9,224) and $(8,245) for 2025 and 2024, respectively, an increase of $979 which is primarily due to:
Deconsolidation of UES-UK cash on hand at the time of its Structured Insolvency of $3,189; and
Lower government incentives, such as grants, of approximately $750 received by a division of the ALP segment for specific capital purchases; offset by
Lower capital expenditures for the FCEP segment of approximately $1,100;
Lower capital expenditures for the ALP segment of approximately $1,700; and
Higher proceeds from the sale of property, plant and equipment of approximately $200, which is attributable primarily to the sale of AUP equipment.
To date, no repayment obligations exist for any government incentives received. At December 31, 2025, commitments for future capital expenditures approximated $7,500, which is expected to be spent over the next 12-24 months.
Net cash flows provided by (used in) financing activities equaled $2,213 and $(1,353) for 2025 and 2024, respectively, a change of $3,566 primarily due to:
Proceeds of $13,500 from the new Equipment Term Notes resulting from amending the Corporation's revolving credit facility in June 2025; offset by
Higher repayment of debt principal of $4,252;
Higher net repayments on the Corporation’s revolving credit facility of $3,781;
No proceeds from the equipment financing facility in the current year, due to the completion of a significant capital equipment program during 2024, whereas the prior year included proceeds from the equipment financing facility of $1,692; and
Debt issuance costs of $891 incurred in connection with amending the Corporation's revolving credit facility.
In addition, Åkers TISCO Roll Co., Ltd. (“ATR”), a 59.88% indirectly owned joint venture of Union Electric Steel Corporation, repaid $664 due to its minority shareholder during the year ended December 31, 2024.
The current portion of debt increased approximately $3,500 as of December 31, 2025 from December 31, 2024 due to:
Outstanding swing loans as of December 31, 2025 of $1,219 whereas no swing loans were outstanding as of December 31, 2024. Swing loans are temporary advances under the revolving credit facility and short-term in nature. Accordingly, swing loans are classified as a current liability until the amount is either repaid, as customers remit payments, or, if elected by the Corporation, refinanced as a longer-term loan under the revolving credit facility.
Principal payments due under the Equipment Term Notes during the next 12 months, which were entered into in June 2025.
The maturity date for the revolving credit facility is June 25, 2030 and, subject to the other terms and conditions of the revolving credit agreement, will become due on that date. In addition, the Corporation has Industrial Revenue Bonds (“IRBs”) which begin to become due late 2027. Although considered remote by the Corporation, the bonds can be put back to the Corporation on short notice if they are not able to be remarketed. Future principal payments, assuming the revolving credit facility and other debt instruments become due on their respective maturity dates and the IRBs are called in 2026, are $15,723 for 2026, $5,707 for 2027, $5,775 for 2028, $6,003 for 2029, and $57,677 for 2030. Along with principal payments, the Corporation will be required to make regular interest payments, the amount of which will vary as the underlying benchmark rates change. See Note 10 , Debt , to the Consolidated Financial Statements.
The effect of exchange rate changes on cash and cash equivalents is primarily attributable to the fluctuation of the British pound and Swedish krona against the U.S. dollar.
As a result of the above, cash and cash equivalents decreased by $4,724 during 2025 and ended the period at $10,703 in comparison to $15,427 at December 31, 2024. The majority of the Corporation’s cash and cash equivalents is held by its foreign operations. Domestic customer remittances are used to pay down borrowings under the Corporation’s revolving credit facility daily, resulting in minimal cash maintained by the Corporation’s domestic operations. Cash held by the Corporation’s foreign operations is considered to be permanently re-invested; accordingly, a provision for estimated local and withholding tax has not been made. If the Corporation was to remit any foreign earnings to it or any of its U.S. entities, the estimated tax impact is expected to be insignificant.
Funds on hand, funds generated from future operations and availability under the Corporation’s revolving credit facility are expected to be sufficient to finance the Corporation’s operational requirements, debt service costs, net asbestos payments, and capital expenditures. As of December 31, 2025, remaining availability under the revolving credit facility approximated $25,454, net of standard availability reserves. Since a significant portion of the Corporation’s debt includes variable rate interest, increases in the underlying benchmark rates will increase the Corporation’s debt service costs.
While the Corporation anticipates it has sufficient liquidity to finance the Corporation’s operational requirements, debt service costs, net asbestos payments, and capital expenditures, it may from time to time consider alternatives, potential transactions and other strategies in an attempt to enhance its liquidity. Given such measures are forward looking, the Corporation cannot ensure it would be successful in achieving such enhancements or be able to improve its liquidity.
With respect to litigation, see Note 20 , Litigation , to the Consolidated Financial Statements. With respect to environmental matters, see Note 22 , Environmental Matters , to the Consolidated Financial Statements.
OFF-BALANCE SHEET ARRANGEMENTS
The Corporation’s off-balance sheet arrangements include the previously mentioned expected future capital expenditures and letters of credit unrelated to the IRBs. See Note 13 , Commitments and Contingent Liabilities , to the Consolidated Financial Statements. These arrangements are not considered significant to the liquidity, capital resources, market risk, or credit risk of the Corporation.
EFFECTS OF INFLATION
Inflationary and market pressures on costs are likely to continue. Customer orders for the FCEP and ALP segments generally are expected to ship within two years from the backlog date, thereby mitigating the risk of inflation when compared to longer-term contracts. In addition, product pricing is reflective of current costs. For the FCEP segment, approximately 70% of customer orders include a commodity, energy and transportation surcharge. The ability to pass on future increases in the price of commodities for the balance of the customer orders will be negotiated on a contract-by-contract basis. To minimize the effect of future increases, including for customer orders without a surcharge, the FCEP segment has fixed pricing for a portion of its estimated electricity and natural gas usage. The ALP segment also has fixed pricing for a portion of its estimated commodity (aluminum) usage.
LABOR AGREEMENTS
The Corporation has long-term labor agreements at each of the key locations. Certain of these agreements will expire in 2026. As is consistent with past practice, the Corporation will negotiate with the intent to secure mutually beneficial arrangements covering multiple years.
COMMITMENTS AND CONTIGENT LIABILITIES
See Note 13 , Commitments and Contingent Liabilities , to the Consolidated Financial Statements.
DERIVATIVE INSTRUMENTS
See Note 16 , Derivative Instruments , to the Consolidated Financial Statements.
APPLICATION OF CRITICAL ACCOUNTING ESTIMATES
The Corporation has identified critical accounting estimates important to the presentation of its financial condition, changes in financial condition and results of operations and involve the most complex or subjective assessments. Critical accounting estimates relate to assessing recoverability of property, plant and equipment and accounting for pension and other postretirement benefits, litigation and loss contingencies, and income taxes.
Property, plant and equipment is reviewed for recoverability whenever events or circumstances indicate the carrying amount of the long-lived assets may not be recoverable. If the undiscounted cash flows generated from the use and eventual disposition of the assets are less than their carrying value, then the asset value may not be fully recoverable, resulting in a write-down of the asset value. Estimates of future cash flows are based on expected market conditions over the remaining useful life of the primary asset(s). Accordingly, assumptions are made about pricing, volume and asset-resale values. Actual results may differ from these assumptions. We believe the amounts recorded in the accompanying consolidated financial statements for property, plant and equipment are recoverable and are not impaired as of December 31, 2025.
Accounting for pension and other postretirement benefits involves estimating the cost of benefits to be provided well into the future and attributing that cost over the time period each employee works. To accomplish this, input from the Corporation’s actuaries is evaluated and extensive use is made of assumptions about inflation, long-term rate of return on plan assets, longevity, employee turnover, and discount rates. The curtailment of the majority of the Corporation’s defined benefit pension plans and the amendment of various other postretirement benefit plans have helped to mitigate the volatility in net periodic pension and other postretirement benefit costs resulting from changes in these assumptions.
The expected long-term rate of return on plan assets is an estimate of the average rates of earnings expected to be earned on funds invested, or to be invested, to provide for the benefits included in the projected benefit obligation. Since these benefits will be paid over many years, the expected long-term rate of return is reflective of current investment returns and investment returns over a longer period. Consideration is also given to target and actual asset allocations, inflation and real risk-free return. The Corporation believes the expected long-term rate of return of 6.40% for its domestic plan to be reasonable, which compares to its actual return on plan assets of approximately 10.35% for 2025. A percentage point decrease in the expected long-term rate of return would increase annual pension expense by approximately $1,800. Conversely, a percentage point increase in the expected long-term rate of return would decrease annual pension expense by approximately $1,800.
The discount rates used in determining future pension obligations and other postretirement benefits for each of the plans are based on rates of return for high-quality fixed-income investments currently available and expected to be available during the period to maturity of the pension and other postretirement benefits. High-quality fixed-income investments are defined as those investments which have received one of the two highest ratings given by a recognized rating agency with maturities of 10+ years. A 25-basis point increase in the discount rate would decrease projected and accumulated benefit obligations by approximately $3,800. Conversely, a 25-basis point decrease in the discount rate would increase projected and accumulated benefit obligations by approximately $3,800.
The Corporation believes that the amounts recorded in the accompanying consolidated financial statements related to pension and other postretirement benefits are based on assumptions that are appropriate at December 31, 2025, although actual outcomes could differ.
Litigation and loss contingency accruals are made when it is determined it is probable a liability has been incurred and the amount can be reasonably estimated. Specifically, the Corporation and certain of its subsidiaries are involved in various claims and lawsuits incidental to their businesses. In addition, claims have been asserted alleging personal injury from exposure to asbestos-containing components historically used in some products manufactured by predecessors of Air & Liquid (the “Asbestos Liability”). To assist the Corporation in determining whether an estimate could be made of the potential liability for pending and unasserted future claims for the Asbestos Liability along with applicable insurance coverage, and the amounts of any estimates, the Corporation hires a nationally recognized asbestos-liability expert and an insurance consultant. Based on their analyses, reserves for probable and reasonably estimable costs for the Asbestos Liability, including defense costs, and receivables for the insurance recoveries deemed probable, are established. These amounts rely on assumptions which are based on currently known facts and strategy.
The Corporation’s policy is to evaluate the Asbestos Liability and related insurance receivables as well as the underlying assumptions on a regular basis. Key variables in these assumptions, including the ability to reasonably estimate the Asbestos Liability through the expected final date by which the Corporation expects to have settled all asbestos-related claims, are summarized in Note 20 , Litigation , to the Consolidated Financial Statements. Key assumptions include the number and nature of new claims to be filed each year, the average cost of disposing of each new claim, average annual defense costs, ability to reach acceptable agreements with insurance carriers currently not a party to a settlement agreement or at a coverage amount less than anticipated, and the solvency risk with respect to the relevant insurance carriers. Other factors that may affect the Asbestos Liability and the Corporation’s ability to recover under its insurance policies include uncertainties surrounding the litigation process from jurisdiction to jurisdiction and from case to case, reforms that may be made by state and federal courts and the passage of state or federal tort reform legislation. Actual expenses or insurance recoveries could be significantly higher or lower than those recorded if assumptions used in the calculations vary significantly from actual results.
The Corporation intends to continue to evaluate the Asbestos Liability and related insurance receivables as well as the underlying assumptions on a regular basis to determine whether further adjustments to the estimates are required. Due to the uncertainties surrounding asbestos litigation and insurance, these regular reviews may result in the incurrence of future charges or credits; however, the Corporation is currently unable to estimate such future changes. Adjustments, if any, to the Corporation’s estimate of the Asbestos Liability and/or insurance receivables could be material to its operating results for the periods in which the adjustments to the liability or receivable are recorded, and to its liquidity and financial position when such liabilities are paid.
Accounting for income taxes includes the Corporation’s evaluation of the underlying accounts, permanent and temporary differences, its tax filing positions, and interpretations of existing tax law. A valuation allowance is recorded against deferred income tax assets to reduce them to the amount that is “more likely than not” to be realized. In doing so, assumptions are made about the future profitability of the Corporation and the nature of that profitability. Actual results may differ from these assumptions. If the Corporation determined it would not be able to realize all or part of the deferred income tax assets in the future, an adjustment to the valuation allowance would be established resulting in a charge to net (loss) income. Likewise, if the Corporation determined it would be able to realize deferred income tax assets in excess of the net amount recorded, a portion of the existing valuation allowance would be released resulting in a credit to net income (loss). As of December 31, 2025, the valuation allowance approximates $51,110, reducing deferred income tax assets to $3,898, an amount the Corporation believes is “more likely than not” to be realized.
The Corporation does not recognize a tax benefit in the consolidated financial statements related to a tax position taken or expected to be taken in a tax return unless it is “more likely than not” the tax authorities will sustain the tax position solely on the basis of the position’s technical merits. Consideration is primarily given to legislation and statutes, legislative intent, regulations, rulings, and case law as well as their applicability to the facts and circumstances of the tax position when assessing the sustainability of the tax position. In the event a tax position no longer meets the “more likely than not” criteria, the Corporation would reverse the tax benefit by recognizing a liability and recording a charge to earnings. Conversely, if the Corporation subsequently determined a tax position met the “more likely than not” criteria, it would recognize the tax benefit by reducing the liability and recording a credit to earnings. As of December 31, 2025, based on information known to date, the Corporation believes the amount of unrecognized tax benefits for tax positions taken or expected to be taken in a tax return, which may be challenged by the tax authorities, not to be significant.
The Corporation’s tax filings are subject to audits by tax authorities in the various jurisdictions in which it does business. These audits may result in assessments of additional taxes. At December 31, 2025, based on information known to date, the Corporation believes there are no pending or outstanding assessments whose resolution would require recognition in its consolidated financial statements.
See Note 21 , Income Taxes , to the Consolidated Financial Statements.
RECENTLY IMPLEMENTED AND ISSUED ACCOUNTING PRONOUNCEMENTS
See Note 1 , Summary of Significant Accounting Policies , to the Consolidated Financial Statements.
ITEM 7A. QUANTITATIVE AND QUALITAT IVE DISCLOSURES ABOUT MARKET RISK
Not applicable.
ITEM 8. FINANCIAL STATEMEN TS AND SUPPLEMENTARY DATA
CONSOLIDATED BA LANCE SHEETS
December 31,
(in thousands, except par value)
Assets
Current assets:
Cash and cash equivalents
Receivables, less allowance for credit losses of $ 242 in 2025 and $ 906 in 2024
Receivables from related parties
Inventories
Insurance receivable – asbestos
Contract assets
Estimated recovery - UES-UK (Note 2)
Other current assets
Total current assets
Property, plant and equipment, net
Operating lease right-of-use assets, net
Insurance receivable – asbestos, less allowance for credit losses of $ 537 in 2025 and $ 656 in 2024
Deferred income tax assets
Intangible assets, net
Investments in joint ventures
Prepaid pensions
Other noncurrent assets
Total assets
Liabilities and Shareholders’ Equity
Current liabilities:
Accounts payable
Accounts payable to related parties
Accrued payrolls and employee benefits
Debt – current portion
Operating lease liabilities – current portion
Asbestos liability – current portion
Customer-related liabilities
Other current liabilities
Total current liabilities
Employee benefit obligations
Asbestos liability
Long-term debt
Noncurrent operating lease liabilities
Deferred income tax liabilities
Other noncurrent liabilities
Total liabilities
Commitments and contingent liabilities (Note 13)
Shareholders’ equity:
Common stock – par value $ 1 ; authorized 40,000 shares; issued and
outstanding 20,237 shares at December 31, 2025 and 19,980 shares at December 31, 2024
Additional paid-in capital
Retained deficit
Accumulated other comprehensive loss
Total Ampco-Pittsburgh shareholders’ equity
Noncontrolling interest
Total shareholders’ equity
Total liabilities and shareholders’ equity
See Notes to Consolidated Financial Statements.
CONSOLIDATED STATEME NTS OF OPERATIONS
For The Years Ended December 31,
(in thousands, except per share amounts)
Net sales:
Net sales
Net sales to related parties
Total net sales
Operating costs and expenses:
Costs of products sold (excluding depreciation and amortization)
Selling and administrative
Depreciation and amortization
Charge (credit) for asbestos-related costs, net
Deconsolidation Charge (Note 2)
Severance charge (Note 2)
Loss on disposal of assets
Total operating costs and expenses
(Loss) income from operations
Other expense:
Interest expense
Other income – net
Total other expense - net
(Loss) income before income taxes
Income tax provision
Net (loss) income
Less: Net income attributable to noncontrolling interest
Net (loss) income attributable to Ampco-Pittsburgh
Net (loss) income per share attributable to Ampco-Pittsburgh common shareholders:
Basic
Diluted
Weighted-average number of common shares outstanding:
Basic
Diluted
See Notes to Consolidated Financial Statements.
CONSOLIDATED STATEMENTS OF C OMPREHENSIVE LOSS
For The Years Ended December 31,
(in thousands)
Net (loss) income
Other comprehensive income (loss), net of income tax where applicable:
Adjustments for changes in:
Foreign currency translation
Unrecognized employee benefit costs (including effects of foreign currency translation)
Fair value of cash flow hedges
Reclassification adjustments for items included in net (loss) income:
Deconsolidation of UES-UK
Amortization of unrecognized employee benefit costs
Settlement of cash flow hedges
Other comprehensive income (loss)
Comprehensive loss
Less: Comprehensive income attributable to noncontrolling interest
Comprehensive loss attributable to Ampco-Pittsburgh
See Notes to Consolidated Financial Statements.
CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY
(in thousands)
Common
Stock
Additional
Paid-in
Capital
Retained
Deficit
Accumulated
Other
Comprehensive
Loss
Noncontrolling
Interest
Total
Balance January 1, 2024
Stock-based compensation
Comprehensive income (loss):
Net income
Other comprehensive loss
Comprehensive income (loss)
Issuance of common stock including excess tax benefits of $ 0
Balance December 31, 2024
Stock-based compensation
Comprehensive income (loss):
Net (loss) income
Other comprehensive income
Comprehensive income (loss)
Shareholder exercise of warrants
Issuance of common stock including excess tax benefits of $ 0
Balance December 31, 2025
See Notes to Consolidated Financial Statements.
CONSOLIDATED STATEME NTS OF CASH FLOWS
For The Years Ended December 31,
(in thousands)
Cash flows from operating activities:
Net (loss) income
Adjustments to reconcile net (loss) income from operations to net cash flows from operating activities:
Deconsolidation Charge
Non-cash severance charge
Depreciation and amortization
Charge (credit) for asbestos-related costs, net
Deferred income tax (benefit) provision
Difference between net periodic pension and other postretirement costs and contributions
Stock-based compensation
Non-cash (benefit) provisions – net
Sale-leaseback accretion
Loss on disposal of assets
Other – net
Changes in assets/liabilities:
Receivables
Inventories
Contract assets
Other assets
Insurance receivable – asbestos
Asbestos liability
Accounts payable
Accrued payrolls and employee benefits
Customer-related liabilities
Other liabilities
Net cash flows provided by operating activities
Cash flows from investing activities:
Purchases of property, plant and equipment
Proceeds from government grants, for purchase of equipment
Deconsolidation of UES-UK cash on hand
Proceeds from sale of property, plant and equipment
Purchases of long-term marketable securities
Proceeds from sale of long-term marketable securities
Net cash flows used in investing activities
Cash flows from financing activities:
Proceeds from Equipment Term Notes
Proceeds from revolving credit facility
Payments on revolving credit facility
Repayment of debt principal
Proceeds from equipment financing facility
Repayment of related-party debt
Payment of debt issuance costs
Proceeds from shareholder exercise of warrants
Net cash flows provided by (used in) financing activities
Effect of exchange rate changes on cash and cash equivalents
Net (decrease) increase in cash and cash equivalents
Cash and cash equivalents at beginning of year
Cash and cash equivalents at end of year
Supplemental disclosures of cash flow information:
Income tax payments (net of refunds)
Interest payments (net of amounts capitalized)
Non-cash investing and financing activities:
Purchases of property, plant and equipment in accounts payable
Finance lease right-of-use assets exchanged for lease liabilities
Operating lease right-of-use assets exchanged for lease liabilities
See Notes to Consolidated Financial Statements.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(dollars in thousands, except per share amounts)
Description of Business
Ampco-Pittsburgh Corporation and its subsidiaries (collectively, the “Corporation”) manufacture and sell highly engineered, high-performance specialty metal products and customized equipment utilized by industry throughout the world. It operates in two business segments: the Forged and Cast Engineered Products (“FCEP”) segment and the Air and Liquid Processing (“ALP”) segment. This segment presentation is consistent with how the Corporation’s chief operating decision maker evaluates financial performance and makes resource allocation and strategic decisions about the business. See Note 24 .
In February 2025, Union Electric Steel UK Limited (“UES-UK”), an indirect wholly owned subsidiary of the Corporation, entered into a formal consultation process with its unions and staff to evaluate various options to improve its profitability. The U.K. operations had been impacted by unpredictable and high energy costs compared to its foreign competitors, lower demand for its products manufactured in the U.K., and increased imports of rolls and flat rolled steel into Europe from low-cost countries. UES-UK completed its formal consultation process in the second quarter of 2025 and, in light of UES-UK's historical performance and management's outlook for the remainder of 2025 and subsequent years, decided to exit its operations.
On October 14, 2025, (the “Filing Date”), the Directors of UES-UK filed a Notice of Appointment with the High Court of Justice, Business and Property Courts at Leeds (the “Insolvency Court”) formally appointing certain insolvency practitioners of FRP Advisory Trading Limited (“FRP”) as administrators of UES-UK (collectively, the “Administrators”). This action was confined to UES-UK exclusively and did not affect the Corporation or any of its other subsidiaries. As of the Filing Date, UES-UK was in administration and its affairs, business and property were being managed by the Administrators (the “Structured Insolvency”). The Administrators have set out their proposals to UES-UK’s creditors which include an orderly wind-down of UES-UK’s financial affairs and sale of its assets. Through October 13, 2025, the date immediately prior to the Filing Date, the operating results of UES-UK are included in the consolidated operating results of the Corporation. Effective as of the Filing Date, the Corporation no longer consolidates the operating results of UES-UK, as the Corporation no longer has decision-making control over UES-UK.
In addition, during 2025, the Corporation closed its non-core steel distribution facility located in Ohio held by Alloys Unlimited and Processing, LLC (“AUP”).
See Note 2 .
NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
The Corporation’s accounting policies conform to accounting principles generally accepted in the United States of America. The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Significant items subject to estimates and assumptions include assessing the carrying value of long-lived assets, valuing the assets and obligations related to employee benefit plans, accounting for loss contingencies associated with claims and lawsuits, and accounting for income taxes. Actual results could differ from those estimates. A summary of the significant accounting policies followed by the Corporation is presented below.
Basis of Presentation
The financial information included herein reflects the consolidated financial position of the Corporation as of December 31, 2025 and 2024, and the consolidated results of its operations and cash flows for the years then ended. Certain reclassifications of prior year data have been made to conform to the current year presentation. These reclassifications had no impact on the Corporation’s previously reported consolidated financial position, ne t income, cash flows, or shareholders’ equity.
Consolidation
The accompanying consolidated financial statements include the assets, liabilities, revenues, and expenses of all majority-owned subsidiaries and joint ventures over which the Corporation exercises control and, when applicable, entities for which the Corporation has a controlling financial interest or is the primary beneficiary. Investments in joint ventures where the Corporation owns 20 % to 50 % of the voting stock and has the ability to exercise significant influence over the operating and financial policies of the joint venture are accounted for using the equity method of accounting. Investments in joint ventures where the Corporation does not have the ability to exercise significant influence over the operating and financial policies of the joint venture are accounted for using the cost method of accounting. Investments in joint ventures are reviewed for impairment whenever events or circumstances indicate the carrying amount of the investment may not be recoverable. If the estimated fair value of the investment is less than the carrying amount and such decline is determined to be “other than temporary,” then the investment may not be fully recoverable, resulting in a write-down of the investment value. Intercompany accounts and transactions are eliminated.
Cash and Cash Equivalents
Securities with purchased original maturities of three months or less are considered to be cash equivalents. The Corporation maintains cash and cash equivalents at various financial institutions which may exceed federally insured amounts.
Inventories
Inventories are valued at the lower of cost and net realizable value, which is defined as the estimated selling price in the ordinary course of business less reasonably predictable costs of completion, disposal and transportation. Cost includes the cost of raw materials, direct labor and overhead for those items manufactured but not yet sold or for which control has not yet transferred to the customer. Fixed production overhead is allocated to inventories based on normal capacity of the production facilities. In periods of abnormally high production, the amount of fixed overhead allocated to each unit of production is decreased so inventories are not measured above cost. The amount of fixed overhead allocated to inventories is not increased as a consequence of abnormally low production or plant idling. Costs for abnormal amounts of spoilage, handling costs and freight costs are charged to expense when incurred. Cost of inventories is primarily determined by the first-in, first-out (“FIFO”) method.
Property, Plant and Equipment
Property, plant and equipment purchased new is recorded at cost with depreciation computed using the straight-line method over the following estimated useful lives: land improvements – 15 to 20 years; buildings – 25 to 50 years; machinery and equipment – 3 to 25 years; and other (e.g., furniture and fixtures and vehicles) – 5 to 10 years. Property, plant and equipment purchased used is recorded at cost with depreciation computed using the straight-line method over the estimated remaining useful lives of the assets. Assets under finance leases are depreciated on a straight-line basis over the shorter of the estimated useful life of the asset or the lease term. Property, plant and equipment acquired as part of a business combination is recorded at its estimated fair value with depreciation computed using the straight-line method over the estimated remaining useful lives of the assets. Expenditures that extend economic useful lives are capitalized. Routine maintenance is charged to expense. Gains or losses are recognized on retirements or disposals. Proceeds from government grants for capital purchases (to date, machinery and equipment) are recorded as a reduction in the purchase price of the underlying assets and amortized against depreciation over the estimated useful lives of the related assets.
Property, plant and equipment is reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of the asset may not be recoverable. If the undiscounted cash flows generated from the use and eventual disposition of the assets are less than their carrying value, then the asset value may not be fully recoverable, resulting in a write-down of the asset value. Estimates of future cash flows are based on expected market conditions over the remaining useful life of the primary asset(s). In addition, the remaining depreciation period for the impaired asset would be re-assessed and, if necessary, revised.
Right-of-Use Assets
A right-of-use (“ROU”) asset represents the right to use an underlying asset for the term of the lease, and the corresponding liability represents an obligation to make periodic payments arising from the lease. A determination of whether an arrangement includes a lease is made at the inception of the arrangement. ROU assets and liabilities are recognized on the consolidated balance sheet, at the commencement date of the lease, in an amount equal to the present value of the lease payments over the term of the lease calculated using the interest rate implicit in the lease arrangement or, if not known, the Corporation’s incremental borrowing rate. The present value of a ROU asset also includes any lease payments made prior to commencement of the lease and excludes any lease incentives received or to be received under the arrangement. The lease term includes options to extend or terminate the lease when it is reasonably certain that such options will be exercised. Operating leases that have original terms of less than 12 months, inclusive of options to extend that are reasonably certain to be exercised, are classified as short-term leases and are not recognized on the consolidated balance sheet.
ROU assets are recorded as a noncurrent asset on the consolidated balance sheet. The corresponding liabilities are recorded as an operating lease liability, either current or noncurrent, as applicable, on the consolidated balance sheet. Operating lease costs are recognized on a straight-line basis over the lease term within costs of products sold (excluding depreciation and amortization) or selling and administrative expenses based on the use of the related ROU asset.
Intangible Assets
Intangible assets primarily consist of developed technology, customer relationships and trade name. Intangible assets with finite lives are amortized using the straight-line method over their estimated useful life, which is determined by identifying the period over which most of the cash flows are expected to be generated. Intangible assets with indefinite lives are not amortized but reviewed for impairment at least annually, as of October 1. Additionally, intangible assets, both finite- and indefinite-lived, are reviewed for impairment whenever events or changes in circumstances indicate the carrying amount of the asset may not be recoverable. For finite-lived intangible assets, if the undiscounted cash flows attributable to the assets are less than their carrying value, then the asset value may not be fully recoverable, resulting in a write-down of the asset value. For indefinite-lived intangible assets, if the discounted cash
flows attributable to the assets are less than their carrying value, then the asset value may not be fully recoverable, resulting in a write-down of the asset value. If the estimate of an intangible asset’s remaining useful life changes, the remaining carrying value of the intangible asset will be amortized prospectively over the revised remaining useful life.
Debt Issuance Costs
Debt issuance costs are amortized as interest expense over the scheduled maturity period of the debt. The costs related to a line-of-credit arrangement are amortized over the term of the arrangement, regardless of whether there are any outstanding borrowings. Unamortized debt issuance costs are either recognized as a direct deduction from the carrying amount of the related debt or, if related to a line-of-credit facility, as an other noncurrent asset on the consolidated balance sheet.
Product Warranty
A warranty that ensures basic functionality is an assurance-type warranty. A warranty that goes beyond ensuring basic functionality is considered a service-type warranty. The Corporation provides assurance-type warranties; it does not provide service-type warranties. Provisions for assurance-type warranties are recognized at the time the underlying sale is recorded. The provision is based on historical experience as a percentage of sales adjusted for probable and known claims.
Employee Benefit Plans
Funded Status
If the fair value of the plan assets exceeds the projected benefit obligation, the over-funded projected benefit obligation is recognized as an asset (prepaid pensions) on the consolidated balance sheet. Conversely, if the projected benefit obligation exceeds the fair value of the plan assets, the under-funded projected benefit obligation is recognized as a liability (employee benefit obligations) on the consolidated balance sheet. Gains and losses arising from the difference between actuarial assumptions and actual experience and unamortized prior service costs are recorded as a separate component of accumulated other comprehensive loss.
Net Periodic Pension and Other Postretirement Benefit Costs
Net periodic pension and other postretirement benefit costs include service cost, interest cost, expected rate of return on the market-related value of plan assets, amortization of prior service costs, and recognized actuarial gains or losses. When actuarial gains or losses exceed 10 % of the greater of the projected benefit obligation or the market-related value of plan assets, they are amortized to net periodic pension and other postretirement benefit costs over the average remaining service period of the employees expected to receive benefits under the plan or over the remaining life expectancy of the employees expected to receive benefits if “all or almost all” of the plan’s participants are inactive. When actuarial gains or losses are less than 10 % of the greater of the projected benefit obligation or the market-related value of plan assets, they are included in net periodic pension and other postretirement benefit costs indirectly as a result of lower/higher interest costs arising from a decrease/increase in the projected benefit obligation. The market-related value of plan assets is determined using a five-year moving average which recognizes gains or losses in the fair market value of assets at the rate of 20 % per year.
Warrants
Accounting for warrants includes an initial assessment of whether the warrants qualify as debt or equity. The Corporation’s warrants, which expired in 2025 and are no longer exercisable, met the definition of equity instruments and, accordingly, are recorded within shareholders’ equity on the consolidated balance sheet. The fair value of the warrants was determined as of the measurement date. Incremental costs directly attributable to the offering of the securities were deferred and charged against the proceeds of the offering.
Other Comprehensive Income (Loss)
Other comprehensive income (loss) includes changes in assets and liabilities from non-owner sources including foreign currency translation adjustments, unamortized prior service costs and unrecognized actuarial gains and losses associated with employee benefit plans, and changes in the fair value of derivatives designated and effective as cash flow hedges.
Certain components of other comprehensive income (loss) are presented net of income tax. Foreign currency translation adjustments exclude the effect of income tax since earnings of non-U.S. subsidiaries are deemed to be re-invested for an indefinite period of time.
Reclassification adjustments are amounts which are realized during the year and, accordingly, are deducted from other comprehensive income (loss) in the period in which they are included in net (loss) income or when a transaction no longer qualifies as a cash flow hedge. Foreign currency transl ation adjustments are included in net (loss) income upon sale or upon complete or substantially complete liquidation of an investment in a foreign entity. With respect to employee benefit plans, unamortized prior service costs are included in net (loss) income either immediately upon curtailment of the employee benefit plan or over the average remaining service period or life expectancy of the employees expected to receive benefits, and unrecognized actuarial gains and losses are included in
net (loss) income indirectly as a result of lower/higher interest costs arising from a decrease/increase in the projected benefit obligation. Changes in the fair value of derivatives are included in net (loss) income when the projected sale occurs or, if a foreign currency purchase contract, over the estimated useful life of the underlying asset.
Foreign Currency Translation
Assets and liabilities of the Corporation’s foreign operations are translated at year-end exchange rates, and the consolidated statements of operations are translated at the average exchange rates for the year. Gains or losses resulting from translating foreign currency financial statements are accumulated as a separate component of accumulated other comprehensive loss until the entity is sold or substantially liquidated.
Revenue Recognition
Revenue recognition requires determination of the sales price and each performance obligation, allocation of the sales price to each performance obligation, and satisfaction of each performance obligation. The sales price and performance obligations are outlined in a contract with a customer. A contract is deemed to exist when there is persuasive evidence of an arrangement, the rights and obligations of the parties are identified, the sales price is identifiable, payment terms are known, the contract has commercial substance, and collectability of consideration is probable. A contract can be in the form of an executed purchase order from the customer, combined with an order acknowledgment from the Corporation, a sales agreement or a longer-term supply agreement between the customer and the Corporation, or a similar arrangement deemed to be a normal and customary business practice for that particular customer or class of customer.
Contracts are short-term in nature with the time between commencement of production to shipment being a few months. A contract could have a single performance obligation or multiple performance obligations for the manufacturing of product(s). For contracts with a single performance obligation, the obligation is satisfied upon transfer of control of the product to the customer. For contracts with multiple performance obligations, the Corporation accounts for individual performance obligations separately if they are distinct. If the performance obligations are not distinct and the standalone selling price is not directly observable, the standalone selling price is estimated maximizing the use of observable inputs. The sales price is allocated to each performance obligation based on the relative standalone selling price of each performance obligation to the total consideration of the contract. The standalone selling price is determined utilizing observable prices to the extent available.
The sales price required to be paid by the customer is identifiable from the contract. It is not subject to refund or adjustment, except for a variable-index surcharge provision which is known at the time of shipment and increases or decreases, as applicable, the selling price of the product for corresponding changes in the published index of certain raw materials, energy and transportation costs. The variable-index surcharge is recognized as revenue when the corresponding inventory is recognized as revenue.
Likelihood of collectability is assessed prior to acceptance of an order and requires the use of judgment. It considers the customer’s ability and intention to pay based on a variety of factors including the customer’s historical payment experience. In certain circumstances, the Corporation may require a deposit from the customer, a letter of credit or another form of assurance for payment. Customer deposits are accounted for as contract liabilities. Payment terms are standard to the industry and generally require payment 30 days after control transfers to the customer.
Transfer of control is assessed based on the terms of the contract. Transfer of control, and therefore revenue recognition, occurs when title, ownership and risk of loss pass to the customer. Typically, this occurs when the product is shipped to the customer (i.e., FOB shipping point), delivered to the customer (i.e., FOB destination) or, for foreign sales, in accordance with trading guidelines known as Incoterms. Incoterms are standard trade definitions used in international contracts and are developed, maintained and promoted by the ICC Commission on Commercial Law and Practice.
Certain customer contracts may include cancellation-for-convenience clauses that provide either (i) the customer with the right to acquire inventory while in-process or (ii) the Corporation with the right for reimbursement with an element of profit in the event the customer cancels. These cancellation-for-convenience clauses result in the recognition of revenue over time and prior to shipment. The amount of revenue and associated costs recognized at a reporting date is based on the costs incurred as of the reporting date in comparison to the estimated total costs to be incurred, which the Corporation believes is a faithful depiction of the transfer of control to the customer. The Corporation’s right to consideration conditioned on cancellation-for-convenience clauses is recorded at each reporting date as contract assets on the consolidated balance sheet.
Shipping terms vary across the businesses and typically depend on the product, country of origin and type of transportation (truck or vessel). There are no customer-acceptance provisions other than, perhaps, customer inspection and testing prior to shipment. Post-shipment obligations are insignificant.
Amounts billed to the customer for shipping and handling are recorded within net sales and the related costs are recorded within costs of products sold (excluding depreciation and amortization). Amounts billed for taxes assessed by various government authorities (e.g.,
sales tax, value-added tax, etc.) are excluded from the determination of net (loss) income and, instead, are recorded as a liability until remitted to the government authority.
Trade receivables are reported on the consolidated balance sheet at the amount due, adjusted for any allowance for credit losses. The Corporation provides an allowance for credit losses to reduce trade receivables to their estimated net realizable value equal to the amount expected to be collected. The allowance for credit losses is estimated based on historical collection experience, current regional economic and market conditions, aging of accounts receivable, current creditworthiness of customers and, prior to December 31, 2025, forward-looking information. At December 31, 2025, the Corporation adopted Accounting Standards Update (“ASU”) 2025-05, Financial Instruments - Credit Losses - Measurement of Credit Losses for Accounts Receivable and Contract Assets which allows a company to early adopt a practical expedient that assumes current conditions as of the balance sheet date do not change for the remaining life of the asset. Accordingly, the Corporation did not consider forward-looking information at December 31, 2025. The Corporation reviews its allowance for credit losses to ensure its reserves for credit losses reflect regional and end-customer industry risk trends as well as current global operating conditions.
Stock-Based Compensation
Stock-based compensation, such stock options, restricted stock units and performance share units, is recognized over the vesting period based on the fair value of the award at the date of grant. For stock options, the fair value is determined by the Black-Scholes option pricing model, including an estimate for forfeitures, and is expensed over the vesting period of three years . For restricted stock units, the fair value is equal to the closing price of the Corporation’s common stock on the New York Stock Exchange (“NYSE”) on the date of grant and is expensed over the service period, typically three years . For performance share unit awards that vest subject to a performance condition, the fair value is equal to the closing price of the Corporation’s stock on the NYSE on the date of grant. For performance share unit awards that vest subject to a market condition, the fair value is determined using a Monte Carlo simulation model. The fair value of performance share unit awards is expensed over the performance period when it is probable that the performance condition will be achieved. Forfeitures resulting from failure to provide continuous service to the Corporation throughout the service period are recognized as they occur. Forfeitures resulting from failure to achieve the performance or market condition of an award are rec ognized when the performance or market condition is not met.
Asbestos-Related Costs
The amounts recorded for asbestos-related liabilities and asbestos-related insurance receivables rely on assumptions based on currently known facts and strategies. Asbestos-related liabilities are recognized when a liability is probable of occurrence and can be reasonably estimated. The liability includes an estimate of future claims and estimated settlement and defense costs to be incurred to resolve both pending and future unasserted claims over the period which such claims can be reasonably estimated. Asbestos-related insurance receivables are recognized for the estimated amount of probable insurance recoveries attributable to the claims for which an asbestos-related liability has been recognized, including the portion of defense costs expected to be reimbursed. Neither the asbestos-related liabilities nor the asbestos-related insurance receivables are discounted to their present values due to the inability to reliably forecast the timing of future cash flows. The asbestos-related liabilities, asbestos-related insurance receivables, sufficiency of the allowance for expected credit losses, and the underlying assumptions are reviewed on a regular basis to determine whether any adjustments to the estimates are required. If it is determined there is an increase in asbestos-related liabilities net of insurance recoveries, then a charge to net (loss) income would be recorded. Similarly, if it is determined there is a decrease in asbestos-related liabilities net of insurance recoveries, then a credit to net (loss) income would b e recorded.
Derivative Instruments
Derivative instruments which include forward exchange (for foreign currency purchases) and futures contracts are recorded on the consolidated balance sheet as either an asset or a liability measured at their fair value. The accounting for changes in the fair value of a derivative depends on the use of the derivative. To the extent that a derivative is designated and effective as a cash flow hedge of an exposure to future changes in value, the change in the fair value of the derivative is deferred in accumulated other comprehensive loss. Any portion considered to be ineffective, including that arising from the unlikelihood of an anticipated transaction to occur, is reported as a component of earnings (other income/expense) immediately.
Upon occurrence of the anticipated purchase, the foreign currency purchase contract is settled, and the change in fair value deferred in accumulated other comprehensive loss is reclassified to earnings (depreciation and amortization expense) over the life of the underlying asset. Upon settlement of a futures contract, the change in fair value deferred in accumulated other comprehensive loss is reclassified to earnings (costs of products sold, excluding depreciation and amortization) when the corresponding inventory is sold and revenue is recognized. To the extent a derivative is designated and effective as a hedge of an exposure to changes in fair value, the change in the derivative’s fair value will be offset in the consolidated statement of operations by the change in the fair value of the item being hedged and is recorded as a component of earnings (other income/expense). Cash flows associated with the derivative instruments are recorded as a component of operating activities on the consolidated statement of cash flows.
The Corporation does not enter into derivative transactions for speculative purposes and, therefore, holds no derivative instruments for trading purposes.
Fair Value
Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants as of the measurement date. A hierarchy of inputs is used to determine fair value measurements with three levels. Level 1 inputs are quoted prices in active markets for identical assets or liabilities and are considered the most reliable evidence of fair value. Level 2 inputs are observable prices that are not quoted on active exchanges. Level 3 inputs are unobservable inputs used for measuring the fair value of assets or liabilities.
Legal Costs
Legal costs expected to be incurred in connection with loss contingencies are accrued when such costs are probable and estimable.
Income Taxes
Income taxes are recognized during the year in which transactions enter into the determination of financial statement income (loss). Any taxes on foreign income in excess of a deemed return on tangible assets of foreign corporations are accounted for as period costs. Deferred income tax assets and liabilities are recognized for the future tax consequences of temporary differences between the book carrying amount and the tax basis of assets and liabilities including net operating loss carryforwards. A valuation allowance is provided against a deferred income tax asset when it is “more likely than not” the asset will not be realized. Similarly, if a determination is made that it is “more likely than not” the deferred income tax asset will be realized, the related valuation allowance would be reduced and a benefit to earnings would be recorded. Penalties and interest are recognized as a component of the income tax provision.
Tax benefits are recognized in the consolidated financial statements for tax positions taken or expected to be taken in a tax return when it is “more likely than not” the tax authorities will sustain the tax position solely on the basis of the position’s technical merits. Consideration is given primarily to legislation and statutes, legislative intent, regulations, rulings, and case law as well as their applicability to the facts and circumstances of the tax position when assessing the sustainability of the tax position. In the event a tax position no longer meets the “more likely than not” criteria, the tax benefit is reversed by recognizing a liability and recording a charge to earnings. Conversely, if a tax position subsequently meets the “more likely than not” criteria, a tax benefit would be recognized by reducing the liability and recording a credit to earnings.
Earnings Per Common Share
Basic earnings per common share is computed by dividing net (loss) income by the weighted-average number of common shares outstanding for the period. Unvested director shares considered outstanding for voting purposes are excluded from the calculation of the weighted-average number of common shares outstanding for the period. The computation of diluted earnings per common share is similar to basic earnings per common share except the denominator is increased to include the dilutive effect of the net additional common shares that would have been outstanding assuming exercise of outstanding stock awards and warrants, calculated using the treasury stock method. The computation of diluted earnings per share would not assume the exercise of an outstanding stock award or warrant if the effect on earnings per common share would be antidilutive. Similarly, the computation of diluted earnings per share would not assume the exercise of outst anding stock awards and warrants if the Corporation incurred a net loss since the effect on earnings per common share would be antidilutive. The weighted-average number of common shares outstanding assuming exercise of dilutive stock awards and warrants was 20,139,074 for 2025 and 19,887,493 for 2024 . The weighted-average outstanding stock awards and warrants excluded from the diluted earnings per common share calculation, since the effect would have been antidilutive, were 3,188,523 for 2025 and 5,358,408 for 2024 . With respect to amounts attributable to Ampco-Pittsburgh common shareholders, net (loss) income attributable to Ampco-Pittsburgh common shareholders excludes net income attributable to noncontrolling interest.
Recently Adopted Accounting Pronouncements
In December 2023, the Financial Accounting Standards Board (“FASB”) issued ASU 2023-09, Income Taxes - Improvements to Income Tax Disclosures . The guidance requires annual disclosure of specific categories of information within the effective tax rate reconciliation, and income taxes paid and income tax expense disaggregated by jurisdiction. The guidance became effective and the Corporation adopted the guidance retrospectively for the comparative periods ended December 31, 2025 and 2024. See Note 21 .
In July 2025, the FASB issued ASU 2025-05, Financial Instruments - Credit Losses - Measurement of Credit Losses for Accounts Receivable and Contract Assets. The guidance allows a company to adopt a practical expedient that assumes current conditions as of the balance sheet date do not change for the remaining life of the asset. The guidance becomes effective for the Corporation's annual period beginning January 1, 2026, with early adoption permitted. The Corporation adopted the practical expedient at December 31, 2025, which did not have a material impact on its consolidated financial position or results of operations.
Recently Issued Accounting Pronouncements
In December 2025, the FASB issued ASU 2025-10, Accounting for Government Grants Received by Business Entities. ASU 2025-10 provides authoritative guidance about the recognition, measurement, and presentation of a grant received by a business entity from a government, including a grant related to an asset that is conditioned on the purchase, construction, or acquisition of an asset such as a long-lived asset. The guidance becomes effective for the Corporation's annual period beginning January 1, 2029, with early adoption permitted. The Corporation is currently evaluating the impact this new standard will have on its consolidated financial position, results of operations and cash flows.
In September 2025, the FASB issued ASU 2025-6, Intangibles - Goodwill and Other - Internal-Use Software - Targeted Improvements to the Accounting for Internal-Use Software . The guidance modifies when an organization begins capitalizing internal use software costs. The guidance becomes effective for the Corporation’s annual period beginning January 1, 2028, with early adoption permitted as of the beginning of an annual reporting period. The Corporation will adopt the standard January 1, 2026. ASU 2025-6 will not have an immediate effect on the Corporation's consolidated financial statements but may impact its accounting for future internal-use software costs.
In November 2024, the FASB issued ASU 2024-03, Income Statement - Disaggregation of Income Statement Expenses . The guidance requires tabular disclosure of certain expenses included in costs of products sold and selling and administrative expenses, such as purchases of inventory and employee compensation, and qualitative description of certain other costs. The guidance becomes effective for the Corporation’s annual period beginning January 1, 2027 and interim periods beginning January 1, 20 28. The Corporation is currently evaluating the impact this new standard will have on its annual disclosures in its consolidated financial statements for the year ending December 31, 2027 and interim disclosures thereafter. It will not, however, impact the Corporation’s consolidated financial position, results of operations or cash flows.
NOTE 2 – EXIT AND DECONSOLIDATION CHARGES:
In February 2025, UES-UK entered into a formal consultation process with its unions and staff to evaluate various options to improve its profitability. The U.K. operations had been impacted by unpredictable and high energy costs compared to its foreign competitors, lower demand for its products manufactured in the U.K., and increased imports of rolls and flat rolled steel into Europe from low-cost countries. UES-UK completed its formal consultation process in the second quarter of 2025 and, in light of UES-UK's historical performance and management's outlook for the remainder of 2025 and subsequent years, decided to exit its operations.
The Corporation initially recognized charg es approximating $ 10,790 , primarily for employee-related costs payable to the employees of UES-UK under existing benefit plans and accelerated depreciation from reducing the estimated remaining useful lives and revising the estimated residual values of the property, plant and equipment of UES-UK. These charges include similar closure costs approximating $ 800 for the non-core steel distribution facility located in Ohio held by Alloys Unlimited and Processing, LLC. (“AUP”) (collectively, the “Exit Charges”).
The Exit Charges included the following components for the year ended December 31, 2025:
Type of Cost
Location of Cost
in Statement of Operations
For the Year Ended
December 31, 2025
Employee-related costs
Severance charge
Accelerated depreciation
Depreciation and amortization
Professional fees
Selling and administrative
Loss on sale of assets
Loss on disposal of assets
Other
Costs of products sold (excluding depreciation and amortization)
Total Exit Charges
Th e charge for employee-related costs primarily represents statutory severance and other benefits payable to the approximately 168 employees of UES-UK and the 15 employees of AUP under existing benefit plans. Accelerated depreciation is a non-cash charge and represents primarily higher depreciation expense resulting from reducing the estimated remaining useful lives and revising the estimated residual values of the property, plant and equipment of UES-UK and AUP. Professional fees represent direct costs incurred relating to the formal consultation process for and Structured Insolvency of UES-UK and closure of AUP. Loss on sale of assets is a non-cash charge and represents the loss on the sale of the equipment of AUP.
Changes in accrued severance during 2025 consisted of the following:
For the Year Ended
December 31, 2025
Balance at beginning of the period
Provision, net
Paid
Deconsolidation of UES-UK
Other, primarily changes in foreign currency exchange rates
Balance at end of the period
As a result of the Structured Insolvency, no outstanding accrued severance remains as of December 31, 2025. In addition, as of the Filing Date, the Corporation (i) wrote down its investment in UES-UK to its estimated fair value; (ii) recognized the other comprehensive losses of UES-UK deferred in accumulated other comprehensive loss; and (iii) established an estimated recovery for the amount of funds expected to be returned to the lenders under the Corporation's Second Amended and Restated Revolving Credit, Term Loan and Security Agreement (the “Credit Agreement”), if any, after the costs and expenses of the Structured Insolvency (the “Deconsolidation Charge”), since the accounts receivables, inventories, and equipment of UES-UK were held as collateral under the Credit Agreement. See Note 10 .
As of the Filing Date, the Corporation recorded a Deconsolidation Charge of $ 41,424 comprised of the following components:
Component of Deconsolidation Charge
For the Year Ended
December 31, 2025
Write-off investment in UES-UK, including cash on hand
Write-off of other comprehensive losses
Estimated recovery by the lenders under the Credit Agreement
Total Deconsolidation Charge
The estimated recovery was based on the Corporation's assessment of the expected recovery from the insolvency proceedings, including consideration of information provided by the Administrators such as the value and the priority of the claims by various creditors. The Corporation has evaluated, and will continue to evaluate, the collectability of the estimated recovery and will adjust the estimated recovery based on facts and circumstances at each reporting date. If it is determined the estimated recovery is expected to be lower than currently estimated, then the estimated recovery would be reduced and a charge to net (loss) income would be recorded. Similarly, if it is determined the estimated recovery is expected to be higher than currently estimated, then the estimated recovery would be increased and a credit to net (loss) income would be recorded. Any recovery will be distributed in the order of priority set forth in the Insolvency Act 1986.
Of the $ 7,500 estimated recovery, $ 1,255 was distributed in January 2026, which reduced the Corporation's balance outstanding under the Credit Agreement.
As of the Filing Date, the Corporation expects its future cash expenditures associated with the Structured Insolvency to be insignificant .
NOTE 3 – INVENTORIES:
Inventories as of December 31, 2025 and 2024 were comprised of the following :
Raw materials
Work-in-progress
Finished goods
Supplies
Inventories
NOTE 4 - CONTRACT ASSETS:
Changes in contract assets for the years ended December 31, 2025 and 2024 consisted of the following:
Balance at the beginning of the year
Satisfaction of existing contracts
Additional revenue earned on new and existing contracts
Less amount attributable to UES-UK as of the Filing Date
Other, primarily changes in foreign currency exchange rates
Balance at the end of the year
NOTE 5 – PROPERTY, PLANT AND EQUIPMENT:
Property, plant and equipment as of December 31, 2025 and 2024 was comprised of the following:
Land and land improvements
Buildings and leasehold improvements
Machinery and equipment
Construction-in-process
Other
Accumulated depreciation
Property, plant and equipment, net
Certain of the above property, plant and equipment are held as collateral including:
Certain of the machinery and equipment with a book value equal to approximately $ 24,239 at December 31, 2025, purchased with proceeds from the equipment finance facility (see Note 10 ) are held as collateral for the equipment financing facility.
Certain land and land improvements and buildings and leasehold improvements with a book value equal to approximately $ 55,499 a re included in the sale-leaseback financing transactions and Disbursement Agreement (see Note 10 ). Title to these assets lies with the lender; however, since the transactions qualified as financing transactions, versus sales, the assets remain recorded on the Corporation’s consolidated balance sheet.
The remaining assets, other than real property, are pledged as collateral for the Corporation’s revolving credit facility and Equipment Term Notes (see Note 10 ).
The gross value of assets under finance leases and the related accumulated depreciation approximated $ 3,795 and $ 1,966 as of December 31, 2025 , respectively, and $ 2,964 and $ 1,498 as of December 31, 2024, respectively. Depreciation expense approximated $ 21,481 and $ 18,264 , including depreciation of assets under finance leases of approximately $ 318 for each of the years ended December 31, 2025 and 2024 , respectively.
NOTE 6 – OPERATING LEASE RIGHT-OF-USE ASSETS:
The manufacturing facilities of one of the Corporation’s cast roll joint ventures in China (see Note 8 ) are located on land leased by the joint venture from the other partner. The land lease commenced in 2007, the date the joint venture was formed, and continues through 2054, the expected end date of the joint venture, and includes variable lease payment provisions based on the land standard price prevailing in Taiyuan, China, where the joint venture is located. In addition, the Corporation leases certain buildings, including factory and office space, with rent subject to an annual escalation as defined in each of the lease agreements.
The net book value of the right-of-use assets as of December 31, 2025 and 2024 was comprised of the following:
Land
Buildings
Machinery and equipment
Other
Operating lease right-of-use assets, net
NOTE 7 – INTANGIBLE ASSETS:
Intangible assets as of December 31, 2025 and 2024 were comprised of the following:
Customer relationships
Developed technology
Trade name
Accumulated amortization
Intangible assets, net
The trade name is an indefinite-lived asset and, accordingly, is not subject to amortization. The fluctuation between the years is due to changes in foreign currency exchange rates. The following summarizes changes in intangible assets for the years ended December 31:
Balance at the beginning of the year
Amortization of intangible assets
Other, primarily impact from changes in foreign currency exchange rates
Balance at the end of the year
Identifiable intangible assets are expected to be amortized over a weighted-average period of approximately 10 years or $ 224 for 2026 , $ 219 for 2027 , $ 219 for 2028 , $ 219 for 2029 , $ 219 for 2030 , and $ 1,136 thereafter.
NOTE 8 – INVESTMENTS IN JOINT VENTURES:
At December 31, 2025, the Corporation has interests in two joint ventures:
Shanxi Åkers TISCO Roll Co., Ltd. (“ATR”) – a cast roll joint venture in China for which the Corporation accounts using the consolidated method of accounting. ATR principally manufactures and sells cast rolls for hot strip mills, steckel mills and medium plate mills.
Anhui Baochang Roll Co., Ltd. (“Anhui”) – a forged roll joint venture in China for which the Corporation accounts using the cost method of accounting. Anhui principally manufactures and sells large forged backup rolls for hot and cold strip mills.
ATR
In 2007, Åkers AB, an indirect wholly owned subsidiary of the Corporation, entered into an agreement with Taiyuan Iron & Steel Co., Ltd. (“TISCO”) to form ATR, with Åkers AB owning 59.88 % and TISCO owning 40.12 %. Since Åkers AB is the majority shareholder, has voting rights proportional to its ownership interest and exercises control over ATR, Åkers AB is considered the primary beneficiary and, accordingly, accounts for its investment in ATR using the consolidated method of accounting. The net assets and net income attributable to TISCO are reflected as a noncontrolling interest in the consolidated financial statements.
Anhui
The Corporation has a 33 % interest in Anhui, which is recorded at cost, or $ 835 . The Corporation does not participate in the management or daily operation of Anhui, has not guaranteed any of its obligations and has no ongoing responsibilities to it. Dividends may be declared by the Board of Directors of the joint venture after allocation of after-tax profits to various “funds” equal to the minimum amount required under Chinese law. No dividends were declared or received in 2025 or 2024.
Gongchang
The Corporation, through UES-UK, had a 24.03 % interest in Jiangsu Gong-Chang Roll Co., Ltd. (“Gongchang”), a cast roll joint venture in China, which was recorded at cost, or $ 1,340 . In connection with the Structured Insolvency of UES-UK, the interest in Gongchang became an asset of the Administrators and was deconsolidated.
NOTE 9 – CUSTOMER-RELATED LIABILITIES:
Customer-related liabilities as of December 31, 2025 and 2024 primarily include liabilities for product warranty claims and deposits received on future orders. The Corporation provides a limited warranty on its products, known as an “assurance-type” warranty, and may issue credit notes or replace products free of charge for valid claims. A warranty is considered an assurance-type warranty if it
provides the customer with assurance that the product will function as intended. Historically, warranty claims have been insignificant. The Corporation records a provision for estimated product warranties at the time the underlying sale is recorded. The provision is based on historical experience as a percentage of sales adjusted for probable and known claims.
Chan ges in the liability for product warranty claims for the years ended December 31, 2025 and 2024 consisted of the following:
Balance at the beginning of the year
Satisfaction of warranty claims
Provision for warranty claims
Other, primarily impact from changes in foreign currency exchange rates
Balance at the end of the year
Customer deposits represent amounts collected from, or invoiced to, a customer in advance of revenue recognition when necessary to secure the right to a specific product. The liability for customer deposits is reversed when the Corporation satisfies its performance obligations and control of the inventory transfers to the customer, typically when title transfers. Substantially all of performance obligations related to customer deposits are expected to be satisfied in less than one year . Performance obligations related to customer deposits expected to be satisfied beyond one year have been classified as a noncurrent liability on the consolidated balance sheet.
Changes in customer deposits for the years ended December 31, 2025 and 2024 consisted of the following:
Balance at the beginning of the year
Satisfaction of performance obligations
Receipt of additional deposits
Less amount attributable to UES-UK as of the Filing Date
Other, primarily changes in foreign currency exchange rates
Balance at the end of the year
Deposits - Other noncurrent liabilities
Deposits - Other current liabilities
NOTE 10 – DEBT:
Debt as of December 31, 2025 and 2024 was comprised of the following:
Revolving credit facility
Sale-leaseback financing obligations
Equipment financing facility
Equipment Term Notes
Industrial Revenue Bonds
Finance leases
Outstanding borrowings
Debt – current portion
Long-term debt
The current portion of debt includes primarily the Industrial Revenue Bonds (“IRBs” ), swing loans under the revolving credit facility and, effective June 30, 2025, principal payments due under the Equipment Term Notes during the next 12 months . Although the IRBs begin to become due in late 2027, the bonds can be put back to the Corporation on short notice if they are not able to be remarketed; accordingly, the IRBs are classified as a current liability, although the Corporation considers the likelihood of the bonds being put back to the Corporation to be remote. By definition, swing loans are temporary advances under the revolving credit facility and short-term in nature. Accordingly, swing loans are classified as a current liability until the amount is either repaid, as customers remit payments, or, if elected by the Corporation, refinanced as a longer-term loan under the revolving credit facility. The swing loan balance outstanding at December 31, 2025 was $ 1,219 . No swing loans were outstanding as of December 31, 2024. Future principal payments, assuming the IRBs are called in 2026, are $ 15,723 for 2026, $ 5,707 for 2027, $ 5,775 for 2028, $ 6,003 for 2029, $ 57,677 for 2030, and $ 42,741 thereafter.
Revolving Credit Facility
On June 25, 2025, the Corporation entered into the Credit Agreement, amending its previous revolving credit and security agreement. The Credit Agreement provides for a $ 100,000 senior secured asset-based revolving credit facility (the “Revolving Credit Facility”) and $ 13,500 under the Equipment Term Notes (see below).
The Revolving Credit Facility can be increased to $ 125,000 at the option of the Corporation and with the approval of the lenders and provides sublimits for letters of credit not to exceed $ 40,000 and European borrowings not to exceed $ 30,000 . Borrowings under the Revolving Credit Facility will bear interest at the Secured Overnight Financing Rate (“SOFR”) plus an applicable margin ranging between 2.00 % and 2.50 %. The maturity date for the Revolving Credit Facility is June 25, 2030 and, subject to other terms and conditions of the Credit Agreement, would become due on that date.
As of December 31, 2025, the Corporation had outstanding borrowings under the Revolving Credit Facility of $ 52,219 . The average interest rate under the Revolving Credit Facility and the previous revolving credit and security agreement approximated 7.10 % and 8.08 % for 2025 and 2024, respectively. The Corporation also utilizes a portion of the Revolving Credit Facility for letters of credit (see Note 13 ). As of December 31, 2025, the remaining availability under the Revolving Credit Facility approximated $ 25,454 , net of standard availability reserves. Deferred financing fees of $ 891 were incurred in 2025 related to amending the Credit Agreement and are being amortized over the remaining term of the Credit Agreement.
Borrowings outstanding under the Revolving Credit Facility are collateralized by a first priority perfected security interest in substantially all of the accounts receivable and inventories of the Corporation and its subsidiaries, including the accounts receivable and inventories of UES-UK through the Filing Date.
The Credit Agreement contains customary affirmative and negative covenants and limitations, including, but not limited to, investments in certain subsidiaries, payment of dividends, incurrence of additional indebtedness and guaranties, and acquisitions and divestitures. In addition, the Corporation must maintain a certain level of excess availability or otherwise maintain a minimum Fixed Charge Coverage Ratio (as defined in the Credit Agreement) of not less than 1.05 to 1.00. The Cor poration was in compliance with the applicable bank covenants as of December 31, 2025.
See Note 2 for a discussion of the estimated recovery for the estimated amount of funds expected to be returned to the lenders under the Credit Agreement, if any, after the costs and expenses of the Structured Insolvency.
Sale-Leaseback Financing Obligations
In September 2018, Union Electric Steel Corporation (“UES”), a wholly owned subsidiary of the Corporation, completed a sale-leaseback financing transaction with Store Capital Acquisitions, LLC (“STORE”) for certain of its real property, including its manufacturing facilities in Valparaiso, Indiana and Burgettstown, Pennsylvania, and its manufacturing facility and corporate headquarters located in Carnegie, Pennsylvania (the “UES Properties”).
In August 2022, Air & Liquid Systems Corporation (“Air & Liquid”), a wholly owned subsidiary of the Corporation, completed a sale-leaseback financing transaction with STORE for certain of its real property, including its manufacturing facilities in Lynchburg, Virginia and Amherst, Virginia. In October 2022, Air & Liquid completed a sale-leaseback financing transaction with STORE for its real property, including its manufacturing facility, located in North Tonawanda, New York (collectively with the Virginia properties, the “ALP Properties”).
In connection with the August 2022 sale-leaseback financing transaction, and as modified by the October 2022 sale-leaseback financing transaction, UES and STORE entered into a Second Amended and Restated Master Lease Agreement (the “Restated Lease”), which amended and restated the existing lease agreement between UES and STORE. Pursuant to the Restated Lease, UES will lease the ALP Properties and the UES Properties (collectively, the “Properties” ), subject to the terms and conditions of the Restated Lease, and UES will sublease the ALP Properties to Air & Liquid on the same terms as the Restated Lease. The Restated Lease provides for an initial term of 20 years ; however, UES may extend the lease for the Properties for four successive periods of five years each. If fully extended, the Restated Lease would expire in August 2062 . UES also has the option to repurchase the Properties, which it may, and intends to, exercise in 2032, for a price equal to the greater of (i) the Fair Market Value of the Properties, or (ii) 115 % of Lessor’s Total Investment, with such terms defined in the Restated Lease.
In August 2022, in connection with the Restated Lease, UES and STORE entered into a Disbursement Agreement pursuant to which STORE agreed to provide up to $ 2,500 to UES towards certain leasehold improvements in the Carnegie, Pennsylvania manufacturing facility. In June 2023, UES received $ 2,500 of proceeds from the Disbursement Agreement. The annual payments for the Properties (the “Base Annual Rent” ) have been adjusted to repay the $ 2,500 o ver the balance of the initial term of the Restated Lease of 20 years. Advances under the Disbursement Agreement are secured by a first priority security interest in the leasehold improvements.
At December 31, 2025 , the Base Annual Rent, including amounts due under the Disbursement Agreement, equaled $ 3,795 , payable in equal monthly installments. Each October through 2052, the Base Annual Rent will increase by an amount equal to the lesser of 2.04 % or 1.25 times the change in the consumer price index, as defined in the Restated Lease. In October 2025 , the Base Annual Rate
increase was 2.04 %. The Base Annual Rent during the remaining ten years of the Restated Lease will be equal to the Fair Market Rent, as defined in the Restated Lease.
The Restated Lease and the Disbursement Agreement contain certain representations, warranties, covenants, obligations, conditions, indemnification provisions and termination provisions customary for those types of agreements. The Corporation was in compliance with the applicable covenants as of December 31, 2025.
The effective interest rates approximate d 8.31 % and 8.24 % for 2025 and 2024, respectively.
Equipment Financing Facility
In September 2022, UES and Clarus Capital Funding I, LLC (“Clarus”) entered into a Master Loan and Security Agreement, pursuant to which UES can borrow up to $ 20,000 to finance certain equipment purchases associated with a capital program at certain of its locations. Each borrowing constitutes a secured loan transaction (each, a “Term Note”). Each Term Note has a term of 84 months. As of December 31, 2025 , monthly payments of principal and interest approximate $ 293 , which continue through mid- 2031 .
Interest on each Term Note accrues at an annual fixed rate ranging between 8.40 % and 9.22 %. The effective interest rates approximated 8.67 % and 8.75 % for 2025 and 2024, respectively. Each Term Note is secured by a first priority security interest in and to all of UES’ rights, title and interests in the underlying equipment.
Equipment Term Notes
Under the Credit Agreement, the Corporation may borrow up to $ 13,500 pursuant to senior secured term notes (the “Equipment Term Notes”). On June 25, 2025, the Corporation borrowed $ 13,500 with such proceeds used to paydown borrowings under the Revolving Credit Facility. The Equipment Term Notes are payable in equal monthly installments of principal of $ 161 commencing August 1, 2025, and continuing on the first day of each month through June 2030, followed by the sixtieth payment of all unpaid principal, accrued and unpaid interest and all unpaid fees, unless otherwise refinanced.
Borrowings under the Equipment Term Notes bear interest at SOFR plus an applicable margin ranging between 3.00 % and 3.50 %. The effective interest rate approximated 7.80 % at December 31, 2025. The Equipment Term Notes are secured by certain equipment of the Corporation that secured the previous revolving credit facility.
In October 2025, as a result of the Structured Insolvency of UES-UK and the sale of the AUP equipment, approximately $ 2,798 of the Equipment Term Notes were repaid, an amount equal to the estimated collateral value of the UES-UK and AUP equipment.
Industrial Revenue Bonds
At December 31, 2025, the Corporation had the following IRBs outstanding: (i) $ 7,116 taxable IRB maturing November 1, 2027 , interest at a floating rate which averaged 4.36 % and 5.37 % for 2025 and 2024 , respectively; and (ii) $ 2,075 tax-exempt IRB maturing March 1, 2029 , interest at a floating rate which averaged 2.55 % and 3.68 % for 2025 and 2024, respectively. The IRBs are secured by letters of credit of equivalent amounts and are remarketed periodically at which time the interest rates are reset. If the IRBs are not able to be remarketed, although considered a remote possibility by the Corporation, the bondholders can seek reimbursement immediately from the letters of credit; accordingly, the IRBs are recorded as current debt on the consolidated balance sheets.
Finance Leases
The Corporation leases equipment under various noncancelable lease agreements, which end between 2026 and 2030. Effective interest rates ranged between approxima tely 5 % and 10 % for 2025 and between approximately 6 % and 9 % for 2024. The weighted-average remaining lease term approximat ed 3 years a t December 31, 2025 and 2024. Cash paid for amounts included in the measurement of finance lease liabilities totaled $ 470 and $ 467 for the years ended December 31, 2025 and 2024 , respectively, of which $ 61 and $ 87 were classified as operating c ash flows a nd $ 409 and $ 380 were classified as financing cash flows in the consolidated statements of cash flows for each of the respective years.
Minority Shareholder Loan
ATR periodically has loans outstanding with its minority shareholder (see Note 23 ) . Amounts repaid approximated $ 664 (RMB 4,713 ) in 2024 . No loans were outstanding at December 31, 2025 or 2024.
Interest on the borrowings equals the three -to- five-year loan interest rate set by the People’s Bank of China in effect at the time of the borrowing, which approximated 4.35 % for 2024. Interest paid in 2024 approximated $ 2 (RMB 17 ). No interest was outstanding as of December 31, 2025 or 2024 .
NOTE 11 – OPERATING LEASE LIABILITIES:
The current and noncurrent portions of the Corporation’s operating lease arrangements as of December 31, 2025 and 2024 were as follows:
Operating lease liabilities – current portion
Noncurrent operating lease liabilities
Total operating lease liabilities
Future operating lease payments as of December 31, 2025 were as follows:
2031 and thereafter
Total undiscounted payments
Less: amount representing interest
Present value of net minimum lease payments
At December 31, 2025 and 2024, the weighted-average remaining lease term approximated 5.50 years and 6.18 years, respectively, and the weighted-average discount rate approxi mated 5.89 % and 5.84 % , respectively.
Short-term lease costs for leases with an original maturity of less than one year wer e $ 478 and $ 564 for the years ended December 31, 2025 and 2024 , respectively. In addition, operating lease costs with an original maturity of one year or more were $ 1,362 and $ 1,105 for the years ended December 31, 2025 and 2024, respectively, and were classified as operating cash flows in the consolidated statements of cash flows.
NOTE 12 – PENSION AND OTHER POSTRETIREMENT BENEFITS:
U.S. Pension Benefits
The Corporation has a qualified domestic defined benefit pension plan that covers substantially all of the Corporation’s U.S. employees. For all locations except one, benefit accruals and participation in the plan have been curtailed and replaced with a defined contribution pension plan. The defined benefit pension plan is covered by the Employee Retirement Income Security Act of 1974 (“ERISA”); accordingly, the Corporation’s policy is to fund at least the minimum actuarially determined annual contribution required under ERISA. Minimum contributions for 2025 and 2024 approximat ed $ 3,086 an d $ 5,438 , respectively. Minimum contributions for 2026 are expected to approximat e $ 2,200 . The fair value of the plan assets as of December 31, 2025 and 2024 approximated $ 161,931 and $ 158,704 , respectively, in comparison to accumulated benefit obligati ons of $ 165,398 a nd $ 168,139 , respectively, for the same periods. Employer contributions to the defined contribution plan to taled $ 2,900 an d $ 3,200 for 2025 and 2024, respectively, and are expected to approxima te $ 3,100 in 2026.
The Corporation also maintained nonqualified defined benefit pension plans for selected executive officers in addition to the benefits provided under the Corporation’s qualified defined benefit pension plan. Benefit accruals and participation in the plans have been curtailed. The objectives of the nonqualified plans were to provide supplemental retirement benefits or restore benefits lost due to limitations set by the Internal Revenue Service. The assets of the nonqualified plans are held in a grantor tax trust known as a “Rabbi” trust and are subject to claims of the Corporation’s creditors but otherwise must be used only for purposes of providing benefits under the plans. The fair market value of the trust at December 31, 2025 and 2024, which is included in other noncurrent assets on the consolidated balance sheets, was $ 2,802 and $ 3,026 , respectively (see Note 17 ). The plans are treated as non-funded pension plans for financial reporting purposes. Accordingly, benefit payments would represent employer contributions. Accumulated benefit obligations approxima ted $ 7,377 a nd $ 8,022 at December 31, 2025 and 2024, respectively.
Employees at one location participate in a multi-employer plan, I.A.M. National Pension Fund (employer identification number 51-6031295, plan number 002), in lieu of the Corporation’s defined benefit pension plan. A multi-employer plan generally receives contributions from two or more unrelated employers pursuant to one or more collective bargaining agreements. The assets contributed by one employer may be used to fund the benefits provided to employees of other employers in the plan because the plan assets, once
contributed, are not restricted to individual employers. The latest report of summary plan information (for the 2024 plan year) provided by I.A.M. National Pension Fund indicates:
Approximatel y 845 employers were obligated to contribute to the plan;
Approxima tely 100,000 active emp loyees participate in the plan; and
Assets of approxim ately $ 14.9 billion and a funded status of approximately 88.0 % .
Less than 100 of the Corporation’s employees participate in the plan and contributions are based on a rate per hour. The Corporation’s contributions to the plan were less th an $ 300 f or 2025 and 2024 and represent le ss than five percent of tot al contributions to the plan by all contributing employers. Contributions are expected to be less tha n $ 300 i n 2026.
Foreign Pension Benefits
Employees of UES-UK participated in a defined benefit pension plan that was curtailedeffective December 31, 2004, and replaced with a defined contribution pension plan. As of the Filing Date, the plans are no longer obligations of the Corporation and, therefore, were deconsolidated. The plans were non-U.S. plans and not covered by ERISA. Employer contributions to the defined benefit pension plan, when necessary, were agreed to by the Trustees and UES-UK, based on U.K. regulations, with the objective of maintaining the self-sufficiency of the plan. Accordingly, estimated contributions were subject to change based on the future investment performance of the plan’s assets. As of the Filing Date, the plan was fully funded. No contributions were required in 2025 or 2024 . As of December 31, 2024, the fair value of the plan’s assets approximated $ 36,101 (£ 28,800 ) in comparison to accumulated benefit obligations of $ 32,449 (£ 25,887 ). Contributions to the defined contribution pension plan approximated $ 212 and $ 267 in 2025 and 2024, respectively.
The Corporation has two additional foreign defined benefit pension plans, which are not funded. Accordingly, benefit payments would represent employer contributions. Projected and accumulated benefit obligations appr oximated $ 5,312 and $ 5,169 at December 31, 2025 and 2024, respectively.
Other Postretirement Benefits
The Corporation provides a monthly reimbursement of postretirement health care benefits for up to a 6 -year period principally to the bargaining groups of two subsidiaries. The plans cover participants and their spouses who retire under an existing pension plan on other than a deferred vested basis and at the time of retirement also have rendered 10 or more years of continuous service irrespective of age. Retiree life insurance is provided to those who meet applicable eligibility requirements. The Corporation’s postretirement health care and life insurance plans are not funded or subject to any minimum regulatory funding requirements. Instead, benefit payments are made from the general assets of the Corporation at the time they are due.
Significant Activity
Actua rial losses (gains) included in projected benefit obligations for each of the years were comprised of the following components:
U.S. Pension
Benefits
Foreign Pension
Benefits
Other Postretirement
Benefits
Changes in assumptions
Impact from lump-sum window, net
Other
Total actuarial losses (gains)
Changes in actuarial assumptions principally include the effect of changes in discount rates which are used to estimate plan liabilities. A 25 -basis point decrease in the discount rate would increase projected and accumulated benefit obligations by approximately $ 3,800 . Conversely, a 25 -basis point increase in the discount rate would decrease projected and accumulated benefit obligations by approximately $ 3,800 . Discount rates decreased by approximat ely 25 -basis p oints at December 31, 2025 from December 31, 2024 where as discount rates increased by approximately 55 -basis points at December 31, 2024 from December 31, 2023.
During 2024, the U.S. pension benefit plan was amended to add a lump-sum window for certain eligible deferred vested participants or their beneficiaries to receive a single sum payment or commence an immediate annuity. As a result of this lump-sum window, total lump sum paid from plan assets was $ 3,880 and the plan’s benefit obligation decreased by $ 4,857 as measured prior to changes in assumptions resulting in an actuarial gain of $ 977 .
Reconciliations
The following tables provide a reconciliation of projected benefit obligations (“PBO”), plan assets and the funded status of the plans for the Corporation’s defined benefit plans calculated using a measurement date as of the end of the respective years.
U.S. Pension
Benefits (a)
Foreign Pension
Benefits (b)
Other Postretirement
Benefits
Change in projected benefit obligations:
PBO at January 1
Service cost
Interest cost
Foreign currency exchange rate changes
Deconsolidation of UES-UK
Actuarial losses (gains)
Participant contributions
Benefits paid from plan assets
Benefits paid by the Corporation
PBO at December 31
Change in plan assets:
Fair value of plan assets at January 1
Actual return on plan assets
Foreign currency exchange rate changes
Deconsolidation of UES-UK
Corporate contributions
Participant contributions
Gross benefits paid
Fair value of plan assets at December 31
Funded status of the plans:
Fair value of plan assets
Less benefit obligations
Funded status at December 31
Includes the nonqualified defined benefit pension plan.
Includes the over-funded defined benefit pension plan of UES-UK until the Filing Date and two smaller unfunded defined benefit pension plans.
The following tables provide a summary of amounts recognized in the consolidated balance sheets at December 31, 2025 and 2024.
U.S. Pension
Benefits
Foreign Pension
Benefits
Other Postretirement
Benefits
Employee benefit obligations:
Prepaid pensions (a)
Accrued payrolls and employee benefits (b)
Employee benefit obligations (c)
Total employee benefit obligations
Accumulated other comprehensive loss: (d)
Net actuarial loss (gain)
Prior service credit
Total accumulated other comprehensive loss
Represents the over-funded U.K. defined benefit pension plan which was recorded as a noncurrent asset in the prior year consolidated balance sheet.
Recorded as a current liability in the consolidated balance sheets.
Recorded as a noncurrent liability in the consolidated balance sheets.
Amounts are pre-tax.
As of December 31, 2025, estimated benefit payments for subsequent years are as follows:
U.S. Pension
Benefits
Foreign Pension
Benefits
Other Postretirement
Benefits
Total benefit payments
Investment Policies and Strategies
As of December 31, 2025, only the U.S. defined benefit plan is funded. The investment policies and strategies of the U.S. defined benefit plan are determined by the Ampco-Pittsburgh Corporation Retirement Committee (the “Retirement Committee”) and monitored by the Audit Committee of the Board of Directors (the “Audit Committee”). The U.S. defined benefit pension plan follows a glide-path strategy whereby target asset allocations are rebalanced based on projected payment obligations and the funded status of the plan. Attempts to minimize risk include allowing temporary changes to the allocation mix in response to market conditions, diversifying investments among asset categories (e.g., equity securities, fixed-income securities, alternative investments, cash and cash equivalents) and within these asset categories (e.g., economic sector, industry, geographic distribution, size) and consulting with independent financial and legal counsels to assure the investments and their expected returns and risks are consistent with the goals of the Retirement and Audit Committees.
Investments in equity securities are primarily in common stocks of publicly traded U.S. and international companies across a broad spectrum of industry sectors. Investments in fixed-income securities are principally A-rated or better bonds with maturities of less than ten years , preferred stocks and convertible bonds. Investments in equity and fixed-income securities are either direct or through designated mutual funds. The Corporation believes there are no significant concentrations of risk associated with the plan's assets. The following investments are prohibited unless otherwise approved by the Board of Directors: stock of the Corporation, futures and options except for hedging purposes, unregistered or restricted stock, warrants, margin trading, short-selling, real estate excluding public or real estate partnerships, and commodities including art, jewelry and gold.
The following table summarizes target asset allocations for 2025 (within +/-5% considered acceptable) and major asset categories. Certain investments are classified differently for target asset allocation purposes and external reporting purposes. The Corporation intends to continue to liquidate the alternative investments to provide additional flexibility with investment allocation.
Target Allocation
Percentage of Plan Assets
December 31,2025
Equity securities
Fixed-income securities
Alternative investments
Other (primarily cash and cash equivalents)
Fair Value Measurement of Plan Assets
Equity securities, exchange-traded funds (“ETFs”), mutual funds, and treasury bonds are actively traded on exchanges or broker networks and price quotes for these investments are readily available. While not quoted on active exchanges, price quotes for corporate bonds are readily available. Similarly, certain commingled funds are not traded publicly, but the underlying assets (such as stocks and bonds) held in the funds are traded on active markets and the prices for the underlying assets are readily observable. For securities not actively traded, the fair value may be based on third-party appraisals, discounted cash flow analysis, benchmark yields, and inputs that are currently observable in markets for similar securities.
Investment Strategies
The significant investment strategies of the various funds are summarized below.
Fund
Investment Strategy
Primary Investment Objective
Various Equity Funds
Each fund maintains a diversified holding in common stock of applicable companies (e.g., common stock of small capitalization companies if a small-cap fund, common stock of medium capitalization companies if a mid-cap fund, common stock of foreign corporations if an international fund, etc.).
Outperform the fund’s related index.
Various Fixed- Income Funds
Invests primarily in a diversified portfolio of fixed-income securities of varying maturities or in commingled funds which invest in a diversified portfolio of fixed-income securities of varying maturities.
Achieve a rate of return that matches or exceeds the expected growth in plan liabilities.
Alternative Investments – Managed Funds
Invests in equities and equity-like asset classes and strategies (such as public equities, venture capital, private equity, real estate, natural resources, and
hedged strate gies) and fixed-income securities approved by the Retirement and Audit Committees.
Generate a minimum annual inflation adjusted return of 5% and outperform a traditional 70/30 equities/bond portfolio.
Temporary Investment Fund
Invests primarily in a diversified portfolio of investment grade money market instruments.
Achieve a market level of current income while maintaining stability of principal and liquidity.
Categories of Plan Assets
Asset categories based on the nature and risks of the U.S. pension benefit plan’s assets as of December 31, 2025 are summarized below.
Quoted Prices in
Active Markets for
Identical Inputs
(Level 1)
Significant Other
Observable Inputs
(Level 2)
Significant
Unobservable
Inputs
(Level 3)
Total
Equity Securities:
United States
Consumer discretionary
Consumer staples
Energy
Financial
Healthcare
Industrials
Information technology
Materials
Mutual funds and ETFs
Real estate
Telecommunications
Utilities
International
Materials
Total Equity Securities
Fixed-Income Securities:
United States
Corporate bonds
Treasury bonds
Mutual funds and ETFs
International
Corporate bonds
Total Fixed-Income Securities
Alternative Investments:
Managed funds (a)
Total Alternative Investments
Other:
Cash and cash equivalents (b)
Total Other
Total assets
Substantially all investments are in real assets, commodities and resources, and absolute return funds.
Includes investments in temporary funds.
Asset categories based on the nature and risks of the U.S. pension benefit plan’s assets as of December 31, 2024 are summarized below.
Quoted Prices in
Active Markets for
Identical Inputs
(Level 1)
Significant Other
Observable Inputs
(Level 2)
Significant
Unobservable
Inputs
(Level 3)
Total
Equity Securities:
United States
Consumer discretionary
Consumer staples
Energy
Financial
Healthcare
Industrials
Information technology
Materials
Mutual funds and ETFs
Real estate
Telecommunications
Utilities
International
Financial
Industrials
Information technology
Materials
Total Equity Securities
Fixed-Income Securities:
United States
Corporate bonds
Treasury bonds
Mutual funds and ETFs
International
Corporate bonds
Total Fixed-Income Securities
Alternative Investments:
Managed funds (a)
Total Alternative Investments
Other:
Cash and cash equivalents (b)
Total Other
Total assets
Substantially all investments are in real assets, commodities and resources, and absolute return funds.
Includes investments in temporary funds.
Asset categories based on the nature and risks of the foreign pension benefit plan’s assets as of December 31, 2024 are summarized below.
Quoted Prices in
Active Markets for
Identical Inputs
(Level 1)
Significant Other
Observable
Inputs
(Level 2)
Significant
Unobservable
Inputs
(Level 3)
Total
Fixed-Income Securities:
Commingled funds (U.K.)
Commingled funds (International)
Total Fixed-Income Securities
Cash and cash equivalents
Total assets
The following table sets forth a summary of changes in the fair value of the Level 3 plan assets for the U.S. and foreign pension benefit plans for the years ended December 31, 2025 and 2024.
U.S. Pension Benefits
Foreign Pension Benefits
Fair value as of January 1
Transfers to other plan assets
Realized gains
Change in net unrealized (losses) gains
Other, primarily impact from changes in foreign currency
exchange rates
Fair value as of December 31
Net Periodic Pension and Other Postretirement Benefit Costs
The actual return on the fair value of the plan assets is included in determining the funded status of the plans. In determining net periodic pension benefit costs, the expected long-term rate of return on the market-related value of the plan assets is used. Differences between the actual return on the fair value of the plan assets and the expected long-term rate of return on the market-related value of the plan assets are classified as part of unrecognized actuarial gains or losses and are recorded as a component of accumulated other comprehensive loss on the consolidated balance sheet. When these gains or losses exceed 10 % of the greater of the projected benefit obligation or the market-related value of plan assets, they are amortized to net periodic pension and other postretirement benefit costs over the average remaining service period or life expectancy of the employees expected to receive benefits under the plans. When the gains or losses are less than 10 % of the greater of the projected benefit obligation or the market-related value of plan assets, they are included in net periodic pension and other postretirement benefit costs indirectly as a result of lower/higher interest costs arising from a decrease/increase in the projected benefit obligation.
Net periodic pension and other postretirement benefit costs include the following components for each of the years.
U.S. Pension
Benefits
Foreign Pension
Benefits
Other Postretirement
Benefits
Service cost
Inte r est cost
Expected return on plan assets
Amortization of:
Prior service cost ( credit )
Actuarial loss (gain)
Total net periodic pension and other postretirement benefit costs
Assumptions
Assumptions are reviewed on an annual basis. Assumptions about wage increases are not relevant since substantially all the benefits available under the defined benefit pension plans are either frozen or based on a multiplier, versus wages.
The discount rates used to determine the benefit obligations for each of the plans as of December 31, 2025 and 2024 are summarized below.
U.S. Pension
Benefits
Foreign Pension
Benefits
Other Postretirement
Benefits
Discount rate
The discount rates used in determining benefit obligations are based on rates of return on high-quality fixed-income investments currently available, and expected to be available, during the period to maturity of the pension and other postretirement benefits. High-quality fixed-income investments are defined as those investments which have received one of the two highest ratings given by a recognized rating agency with maturities of 10 + years. A 25 -basis point decrease in the discount rate would increase projected and accumulated benefit obligations by approximately $ 3,800 . Conversely, a 25 -basis point increase in the discount rate would decrease projected and accumulated benefit obligations by approximately $ 3,800 .
The following assumptions were used to determine net periodic pension and other postretirement benefit costs for the years ended December 31, 2025 and 2024.
U.S. Pension
Benefits
Foreign Pension
Benefits
Other Postretirement
Benefits
Discount rate
Expected long-term rate of return
Discount rates used in determining future pension obligations and other postretirement benefits in a given year are used to determine net periodic pension and other postretirement benefit costs in the following year. The expected long-term rate of return on plan assets is an estimate of average rates of earnings expected to be earned on funds invested, or to be invested, to provide for the benefits included in the projected benefit obligation. Since these benefits will be paid over many years, the expected long-term rate of return is reflective of current investment returns and investment returns over a longer period. Consideration is also given to target and actual asset allocations, inflation and real risk-free return. A percentage point decrease in the expected long-term rate of return would increase net periodic pension benefit costs by approximately $ 1,800 . Conversely, a percentage point increase in the expected long-term rate of return would decrease net periodic pension benefit costs by approximately $ 1,800 .
In addition, the assumed health care cost trend rate at December 31, 2025 for other postretirement benefits is 8.80 % for 2025 gradually decreasing to 4.75 % in 2031 . I n selecting rates for current and long-term health care assumptions, the Corporation considers known health care cost increases, the design of the benefit programs, the demographics of its active and retiree populations, and expectations of inflation rates in the future.
NOTE 13 – COMMITMENTS AND CONTINGENT LIABILITIES:
As of December 31, 2025:
Outstanding standby and commercial letters of credit and bank guarantees e qualed $ 13,800 , of which more than half s erves as collateral for the IRB debt,
Outstanding surety bonds approximate d $ 3,700 (SEK 33,900 ), which guarantee certain pension commitments of certain of the Corporation's foreign subsidiaries under a credit insurance arrangement, and
Outstanding Corporate guarantees approximated $ 1,700 (SEK 16,000 ), which guarantee certain obligations of one of the Corporation's foreign subsidiaries with its local banking partner.
At December 31, 2025, commitments for future capital expenditures approximated $ 7,500 , which is expected to be spent over the next 12 - 24 months.
Approximately 24 % of the Corporation’s employees are covered by collective bargaining agreements that have expiration dates rangin g from May 2026 to October 2028 . Collectiv e bargaining agreements expiring in 2026 (representing approximatel y 33 % o f the covered employees) will be negotiated with the intent to secure mutually beneficial arrangements.
See Note 16 regarding derivative instruments, Note 20 regarding litigation and Note 22 for environmental matters.
NOTE 14 – EQUITY RIGHTS OFFERING:
In September 2020, the Corporation completed an equity rights offering, issuing 5,507,889 shares of its common stock and 12,339,256 Series A warrants to existing shareholders. The shares of common stock and warrants are classified as equity instruments in the consolidated statements of shareholders’ equity. Outstanding Series A warrants equaling 10,934,756 expired August 1, 2025 and are no longer exercisable, in accordance with the warrant agreement. Each Series A warrant provided the holder with the right to purchase 0.4464 shares of common stock at an exercise price of $ 2.5668 , or $ 5.75 per whole share of common stock. During 2025, 7,113 warrants were exercised.
The Corporation received $ 18 of proceeds from shareholders from the exercise of warrants in 2025 . No proceeds from shareholders from the exercise of warrants were received in 2024.
The following summarizes outstanding warrants as of December 31, 2025 and 2024 and activity for the years then ended.
Number of Warrants
Outstanding as of January 1, 2024
Converted to common stock
Outstanding as of December 31, 2024
Converted to common stock
Expired on August 1, 2025
Outstanding as of December 31, 2025
NOTE 15 – ACCUMULATED OTHER COMPREHENSIVE LOSS:
Net changes and ending balances for the various components of accumulated other comprehensive loss as of and for the years ended December 31, 2025 and 2024 are summarized below. All amounts are net of tax where applicable.
Foreign
Currency
Translation
Adjustments
Unrecognized
Components
of Employee
Benefit Plans
Derivatives
Total Accumulated
Other
Comprehensive
Loss
Noncontrolling Interest
Accumulated
Other
Comprehensive
Loss Attributable to Ampco-Pittsburgh
January 1, 2024
Net change
December 31, 2024
Net change
December 31, 2025
The net change for 2025 includes foreign currency translation adjustments and unrecognized components of employees benefit plans of approximately $ 17,973 and $ 13,515 , respectively, associated with the deconsolidation of UES-UK and is included in the Deconsolidation Charge in the consolidated statement of operations.
The following summarizes the line items affected on the consolidated statements of operations for components reclassified from accumulated other comprehensive loss for the years ended December 31, 2025 and 2024. Amounts in parentheses represent credits to net (loss) income.
Deconsolidation of UES-UK:
Deconsolidation Charge
Income tax provision
Net of income tax
Amortization of unrecognized employee benefit costs:
Other – net
Income tax provision
Net of income tax
Settlement of cash flow hedges:
Depreciation and amortization (foreign currency purchase contracts)
Costs of products sold (excluding depreciation and amortization)
(futures contracts – copper and aluminum)
Total before income tax
Income tax provision
Net of income tax
The income tax effect associated with the various components of other comprehensive loss for the years ended December 31, 2025 and 2024 is summarized below. Amounts in parentheses represent credits to net (loss) income when reclassified to earnings. Certain amounts have no income tax effect due to the Corporation having a valuation allowance recorded against the deferred income tax assets for the jurisdiction where the income or expense is recognized. Foreign currency translation adjustments exclude the effect of income taxes since earnings of non-U.S. subsidiaries are deemed to be re-invested for an indefinite period of time.
Income tax effect associated with changes in:
Unrecognized employee benefit costs
Fair value of cash flow hedges
Income tax effect associated with reclassification adjustments:
Deconsolidation of UES-UK
Amortization of unrecognized employee benefit costs
Settlement of cash flow hedges
NOTE 16 – DERIVATIVE INSTRUMENTS:
Certain divisions of the ALP segment are subject to risk from increases in the price of commodities (aluminum and copper) used in the production of inventory. To minimize this risk, futures contracts are entered into which are designated as cash flow hedges. In March 2025, given the dramatic escalation in the price of copper futures and sufficient supply of copper, the Corporation terminated its existing futures contracts for copper resulting in a pre-tax terminationgain of approximately $ 559 . The terminationgain was reclassified to earnings throughout 2025 as the projected sales occurred. At December 31, 2025, approxima tely 58 % or $ 967 of anticipated aluminum purchases over the next eig ht months are hedged. At December 31, 2024 , approximately 49 % or $ 3,301 of anticipated copper purchases over the next nine months and 40 % or $ 373 of anticipated aluminum purchases over the next five months were hedged.
The Corporation periodically enters into purchase commitments to cover a portion of its anticipated natural gas and electricity usage. The commitments qualify as normal purchases and, accordingly, are not reflected on the consolidated balance sheets. At December 31, 2025, the Corporation has purchase commitments covering approximatel y 25 % or $ 935 of anticipated natural gas usage through December 31, 2026 for one of its subsidiaries and approximately 24 % or $ 1,388 of anticipated electricity usage through December 2027 for one of its subsidiaries . At December 31, 2024 , the Corporation had purchase commitments covering approximately 26 % or $ 1,096 of anticipated natural gas usage through December 31, 2025 for one of its subsidiaries and approximately 25 % or $ 766 of anticipated electricity usage through December 2025 for two of its subsidiaries . Purchases of natural gas and electricity under previously existing commitments appro ximated $ 3,316 a nd $ 3,267 for 2025 and 2024, respectively.
The Corporation previously entered into foreign currency purchase contracts to manage the volatility associated with euro-denominated progress payments to be made for certain machinery and equipment. Upon occurrence of an anticipated purchase and placement of the underlying fixed asset in service, the foreign currency purchase contract was settled and the change in fair value of the foreign currency purchase contract was deferred in accumulated other comprehensive loss and is being reclassified to earnings (depreciation and amortization expense) over the life of the underlying asset (approximately 15 years, through 2026).
No portion of the existing cash flow hedges is considered to be ineffective, including any ineffectiveness arising from the unlikelihood of an anticipated transaction to occur. Additionally, no amounts have been excluded from assessing the effectiveness of a hedge. The Corporation does not enter into derivative transactions for speculative purposes and, therefore, holds no derivative instruments for trading purposes.
T he change in the fair value of the cash flow contracts is recorded as a component of accumulated other comprehensive loss. Amounts recognized as and reclassified from accumulated other comprehensive loss are recorded as a component of other comprehensive loss and are summarized below. Amounts are after-tax, where applicable. Certain amounts recognized as or reclassified from
comprehensive loss for 2025 and 2024 have no tax effect due to the Corporation having a valuation allowance recorded against the deferred income tax assets for the jurisdiction where the income or expense is recognized.
For the Year Ended December 31, 2025
Beginning of
the Year
Recognized
Reclassified
End of
the Year
Foreign currency purchase contracts
Future contracts – copper and aluminum
Change in fair value
For the Year Ended December 31, 2024
Foreign currency purchase contracts
Future contracts – copper and aluminum
Change in fair value
The change in fair value reclassified or expected to be reclassified from accumulated other comprehensive loss to earnings is summarized below. All amounts are pre-tax.
Location of Gain (Loss) in
Estimated to be
Reclassified in
the Next
Years Ended December 31,
Consolidated Statements of Operations
12 Months
Foreign currency purchase contracts
Depreciation and amortization
Futures contracts – copper and
aluminum
Costs of products sold (excluding depreciation and amortization)
Losses on foreign exchange transactions included in other expense approximated $ 851 and $ 483 for 2025 and 2024 , respectively.
NOTE 17 – FAIR VALUE:
The following summarizes financial assets and liabilities reported at fair value on a recurring basis in the consolidated balance sheets at December 31:
Quoted Prices
in Active
Markets for
Identical Inputs
(Level 1)
Significant
Other
Observable
Inputs
(Level 2)
Significant
Unobservable
Inputs
(Level 3)
Total
Investments
Other noncurrent assets
Investments
Other noncurrent assets
The investments held as other noncurrent assets represent assets held in the “Rabbi” trust for the purpose of providing benefits under the non-qualified defined benefit pension plan. The fair value of the investments is based on quoted prices of the investments in active markets. The fair value of futures contracts is based on market quotations. The fair values of the variable-rate IRB debt and borrowings under the revolving credit facility and other debt facilities approximate their carrying values. Additionally, the fair values of trade receivables and trade payables approximate their carrying values.
NOTE 18 – STOCK-BASED COMPENSATION:
At December 31, 2025 , the Ampco-Pittsburgh Corporation 2016 Omnibus Incentive Plan, as amended (the “Incentive Plan”), authorizes the issuance of up to 4,200,000 shares of the Corporation’s common stock for awards under the Incentive Plan. Awards under the Incentive Plan may include incentive stock options and non-qualified stock options, stock appreciation rights, restricted shares and restricted stock units, performance awards, other stock-based awards, or short-term cash incentive awards. If any award is canceled, terminates, expires, or lapses for any reason prior to the issuance of the shares, or if the shares are issued under the Incentive Plan and thereafter are forfeited to the Corporation, the shares subject to such awards and the forfeited shares will not count against the aggregate number of shares available under the Incentive Plan. Shares tendered or withheld to pay the option exercise price or tax withholding will continue to count against the aggregate number of shares of common stock available for grant under the Incentive Plan. Any shares repurchased by the Corporation with cash proceeds from the exercise of options will not be added back to the pool of shares available for grant under the Incentive Plan.
The Incentive Plan may be administered by the Board of Directors or the Compensation Committee of the Board of Directors (“Compensation Committee”). The Compensation Committee has the authority to determine, within the limits of the express provisions of the Incentive Plan, the individuals to whom the awards will be granted and the nature, amount and terms of such awards.
The Compensation Committee has granted stock options, time-vesting restricted stock units (“RSUs”) and performance-vesting restricted stock units (“PSUs”) to select individuals. All stock options, which were fully vested, expired by December 31, 2024. Each RSU represents the right to receive one share of common stock of the Corporation at a future date after the RSU has become earned and vested, subject to the terms and conditions of the RSU award agreement. The RSUs typically vest over a three-year period. The PSUs can be earned depending upon the achievement of a performance or market condition and a time-vesting condition as follows: (i) achievement of a targeted return on invested capital over a three-year performance period; (ii) achievement of a three-year cumulative relative total shareholder return as ranked against other companies included in the Corporation’s peer group; (iii) achievement of a targeted share price for the Corporation's common stock for a prescribed period during the four-year period commencing on the date of grant; (iv) achievement of an absolute stock price for Corporation’s common stock for a prescribed period during the three-year period commencing on the date of grant; and (v) remaining continuously employed with the Corporation through either the end of the third year following the date of grant or, for the share-price performance awards, the end of the fourth year following the date of grant. Earlier vesting of the stock units is permitted under certain conditions, such as upon a change of control of the Corporation, or as approved by the Board of Directors.
The grant date fair values for the RSUs and PSUs subject to a performance condition are equal to the closing price of the Corporation’s common stock on the NYSE on the date of grant. The grant date fair value for PSUs subject to a market condition is determined using a Monte Carlo simulation model. The determination of the fair value of these awards takes into consideration the likelihood of achievement of the market condition . Unrecognized compensation expense associated with the RSUs and PSUs equaled $ 1,728 at December 31, 2025 , and is expected to be recognized over a weighted-average period of approximately 2 years.
Outstanding RSUs and PSUs, which would represent non-vested awards, as of December 31, 2025 and 2024, and activity for the years then ended, are summarized below. Forfeitures resulting from failure to provide continuous service to the Corporation throughout the service period are recognized as they occur. Forfeitures resulting from failure to achieve the performance or market condition of an award are recognized when the performance or market condition is not met.
Number of
RSUs
Weighted-
Average
Fair
Value
Number of
PSUs
Weighted-
Average
Fair
Value
Outstanding at January 1, 2024
Granted
Converted to common stock
Forfeited
Outstanding at December 31, 2024
Granted
Converted to common stock
Forfeited
Outstanding at December 31, 2025
The Incentive Plan also provides for restricted stock awards during any one year to non-employee members of the Board of Directors, based on the grant date fair value, not to exceed $ 200 . The limit does not apply to shares received by a non-employee director at his or her election in lieu of all or a portion of the director’s retainer for board service. The restricted stock awards vest on the one-year anniversary of the grant date. Outstanding restricted stock awards granted to non-employee members of the Board of Directors as of December 31, 2025 and 2024, and activity for the years then ended, are as follows:
Number of
Restricted Stock Awards
Weighted-
Average
Fair
Value
Outstanding at January 1, 2024
Granted
Converted to common stock
Outstanding at December 31, 2024
Granted
Converted to common stock
Outstanding at December 31, 2025
Stock-based compensation expense for all awards, including expense associated with the equity-based awards granted to non-employee members of the Board of Directors, approxima ted $ 1,351 and $ 1,478 for 2025 and 2024 , respectively. The income tax benefit recognized in the consolidated statements of operations was not significant due to the Corporation having a valuation allowance recorded against its deferred income tax assets for the jurisdiction where the expense was recognized.
NOTE 19 – RESEARCH AND DEVELOPMENT COSTS:
Expenditures relating to the development of new products, identification of products or process alternatives and modifications and improvements to existing products and processes are expensed as incurred. These expenses approximated $ 494 f or 2025 and $ 441 for 2024 .
NOTE 20 – LITIGATION:
The Corporation and its subsidiaries are involved in various claims and lawsuits incidental to their businesses from time to time and are also subject to asbestos litigation as described below.
Asbestos Litigation
Claims have been asserted alleging personal injury from exposure to asbestos-containing components historically used in some products manufactured by predecessors of Air & Liquid (the “Asbestos Liability”). Air & Liquid and, in some cases, the Corporation, are defendants (among a number of defendants, often in excess of 50 defendants) in cases filed in various state and federal courts.
Asbestos Claims
The following table reflects approximate information about the claims for the Asbestos Liability against Air & Liquid and the Corporation for the years ended December 31, 2025 and 2024 (number of claims not in thousands). The majority of the settlement and defense costs were reported and paid by insurance carriers. Because claims are often filed and can be settled or dismissed in large groups, the amount and timing of settlements, as well as the number of open claims, can fluctuate significantly from period to period.
Total claims pending at the beginning of the period
New claims served
Claimsdismissed
Claims settled
Total claims pending at the end of the period (1)
Administrative closures (2)
Total active claims pending at the end of the period
Gross settlement and defense costs paid (in 000’s)
Average gross settlement and defense costs per claim resolved (in 000’s) (3)
Included as “ open claims ” are approximat ely 1,643 an d 1,638 claims in 2025 and 2024, respectively, classified in various jurisdictions as “ inactive ” or transferred to a state or federal judicial panel on multi-district litigation.
Administrative closures include (i) mesothelioma claims filed five or more years ago; (ii) non-mesothelioma claims filed six or more years ago; (iii) claims previously classified in various jurisdictions as “ inactive; ” and (iv) claims transferred to a state or federal judicial panel on multi-district litigation.
Claims resolved do not include claims that were administratively closed.
Asbestos Insurance
The Corporation and Air & Liquid are parties to a series of settlement agreements (“Settlement Agreements”) with insurance carriers that have coverage obligations for the Asbestos Liability (the “Settling Insurers”). Under the Settlement Agreements, the Settling Insurers accept financial responsibility, subject to the terms and conditions of the respective agreements, including overall coverage limits, for pending and future claims for the Asbestos Liability. The Settlement Agreements encompass the majority of insurance policies that provide coverage for claims for the Asbestos Liability.
The Settlement Agreements acknowledge Howden North America, Inc. (“Howden”) is entitled to coverage under policies covering the Asbestos Liability for claims arising out of the historical products manufactured or distributed by Buffalo Forge, a former subsidiary of the Corporation (the “Products”), which was acquired by Howden. The Settlement Agreements do not provide for any prioritization on access to the applicable policies or any sub-limits of liability as to Howden or the Corporation and Air & Liquid and, accordingly, Howden may access the coverage afforded by the Settling Insurers for any covered claim arising out of the Products. In general, access by Howden to the coverage afforded by the Settling Insurers for the Products will erode coverage under the Settlement Agreements available to the Corporation and Air & Liquid for the Asbestos Liability.
Asbestos Valuations
The Corporation, with the assistance of a nationally recognized expert in the valuation of asbestos liabilities, reviews the Asbestos Liability and the underlying assumptions on a regular basis to determine whether any adjustments to the Asbestos Liability or the underlying assumptions are necessary. When warranted, the Asbestos Liability is adjusted to consider current trends and new information that becomes available. In conjunction with the regular updates of the estimated Asbestos Liability, the Corporation also develops an estimate of defense costs expected to be incurred with settling the Asbestos Liability and probable insurance recoveries for the Asbestos Liability and defense costs.
In developing the estimate of probable defense costs, the Corporation considers several factors including, but not limited to, current and historical defense-to-indemnity cost ratios and expected defense-to-indemnity cost ratios. In developing the estimate of probable insurance recoveries, the Corporation considers the expert’s projection of settlement costs for the Asbestos Liability and management’s projection of associated defense costs. In addition, the Corporation consults with its outside legal counsel on insurance matters and a nationally recognized insurance consulting firm it retains to assist with certain policy allocation matters. The Corporation also considers a number of other factors including the Settlement Agreements in effect, policy exclusions, policy limits, policy provisions regarding coverage for defense costs, attachment points, gaps in the coverage, policy exhaustion, the nature of the underlying claims for the Asbestos Liability, estimated erosion of insurance limits on account of claimsagainst Howden arising out of the Products, prior impairment of policies, insolvencies among certain of the insurance carriers, and creditworthiness of the remaining insurance carriers based on publicly available information. Based on these factors, the Corporation estimates the probable insurance recoveries for the Asbestos Liability and defense costs for the corresponding time frame of the Asbestos Liability.
In 2025, the Corporation updated its estimated Asbestos Liability. The methodology used to update the projection was substantially the same methodology employed previously, which has been accepted by numerous courts, and included the following factors:
interpretation of a widely accepted forecast of the population likely to have been exposed to asbestos;
epidemiological studies estimating the number of people likely to develop asbestos-related diseases;
analysis of the number of people likely to file an asbestos-related injury claim against Air & Liquid and the Corporation based on such epidemiological data and relevant claims history from January 1, 2022 to October 31, 2025;
analysis of pending cases, by type of injury claimed and jurisdiction where the claim is filed; and
analysis of claims resolution history from January 1, 2022 to October 31, 2025, to determine the average settlement value of claims, by type of injury claimed and jurisdiction of filing.
Based on these analyses, the Corporation recorded an undiscounted increase to its estimated Asbestos Liability of $ 25,096 for claims pending or projected to be asserted through the estimated final date by which the Corporation expects to have settled all asbestos-related claims and estimated defense costs associated with such claims. The increase is attributable to current year experience which is expected to continue including a higher resolved settlement value. The Corporation also recorded an undiscounted increase to its insurance receivable of $ 10,571 for the estimated insurance recoveries attributable to the claims for which the Asbestos Liability reserve has been established and for the portion of defense costs covered by the Settlement Agreements.
In connection with the Corporation’s review of the Asbestos Liability and the underlying assumptions in 2025, the Corporation revised its estimated defense-to-indemnity cost ratio from 55 % to 50 % . This change reduced the Asbestos Liability by $ 6,102 and insurance receivable by $ 3,929 . Similarly, in connection with its review of the Asbestos Liability and the underlying assumptions in 2024 , the Corporation revised its estimated defense-to-indemnity cost ratio from 60 % to 55 % . This change reduced the Asbestos Liability by $ 6,470 and the insurance receivable by $ 2,735 .
The following table summarizes activity relating to the Asbestos Liability for the years ended December 31, 2025 and 2024.
Asbestos Liability, beginning of the year
Settlement and defense costs paid
Effect from a lower defense-to-indemnity cost ratio
Change in estimated liability
Asbestos Liability, end of the year
The following table summarizes activity relating to insurance recoveries for the years ended December 31, 2025 and 2024.
Insurance receivable – asbestos, beginning of the year
Settlement and defense costs paid by insurance carriers
Effect from a lower defense-to-indemnity cost ratio
Change in estimated coverage
Insurance receivable – asbestos, end of the year
The Corporation establishes an allowance for expected credit losses based on historical insolvency experience, expected time frame until collection of insurance claim and assessments of current creditworthiness of insurers. The insurance receivable does not assume any recovery from insolvent carriers. A substantial majority of the insurance recoveries deemed probable is from insurance companies rated A – (excellent) or better by A.M. Best Corporation. There can be no assurance, however, there will not be insolvencies among the relevant insurance carriers, or the assumed percentage recoveries for certain carriers will prove correct. At December 31, 2025 and 2024, the allowance for expected credit losses approximat ed $ 537 a nd $ 656 , respectively.
The Corporation recognized asbestos-related cos ts of $ 12,352 and $ ( 4,184 ) for 2025 and 2024, respectively, comprised of the following:
Impact from changes in estimated Asbestos Liability, net of estimated insurance recoveries
Benefit from a lower defense-to-indemnity cost ratio
Proceeds from insolvent asbestos-related insurance carrier
Charge (credit) for asbestos-related costs
The amounts recorded for the Asbestos Liability and insurance receivable rely on assumptions based on currently known facts and strategy. The Corporation’s actual expenses or insurance recoveries could be significantly higher or lower than those recorded if assumptions used in the Corporation’s or the experts’ calculations vary significantly from actual results. Key variables in these assumptions include the forecast of the population likely to have been exposed to asbestos; the number of people likely to develop an asbestos-related disease; the estimated number of people likely to file an asbestos-related injury claim against the Corporation or its subsidiaries; an analysis of pending cases, by type of injury claimed and jurisdiction where the claim is filed; average settlement value of claims, by type of injury claimed and jurisdiction of filing; the number and nature of new claims to be filed each year; the average cost of disposing of each new claim; the average annual defense costs; compliance by relevant parties with the terms of the Settlement Agreements; ability to reach acceptable agreements with insurance carriers currently not a party to a Settlement Agreement or at a coverage amount less than anticipated; and the solvency risk with respect to the relevant insurance carriers. Other factors that may affect the Asbestos Liability and ability to recover under the Corporation’s insurance policies include uncertainties surrounding the litigation process from jurisdiction to jurisdiction and from case to case, reforms that may be made by state and federal courts, and the passage of state or federal tort reform legislation.
The Corporation intends to continue to evaluate the Asbestos Liability, related insurance receivable, the sufficiency of its allowance for expected credit losses, and the underlying assumptions on a regular basis to determine whether any adjustments to the estimates are required. Due to the uncertainties surrounding asbestos litigation and insurance recovery, these regular reviews may result in the Corporation adjusting its current reserve; however, the Corporation is currently unable to estimate such future adjustments. Adjustments, if any, to the Corporation’s estimate of the Asbestos Liability, insurance receivable and/or allowance for expected credit losses could be material to the operating results for the period in which the adjustments to the liability, receivable or allowance are recorded and to the Corporation’s consolidated financial position, results of operations and liquidity.
NOTE 21 – INCOME TAXES:
(Loss) income from operations before income taxes for the years ended December 31, 2025 and 2024 is summarized below. (Loss) income from operations before income taxes for certain foreign entities is classified differently for book reporting and income tax reporting purposes.
Domestic
Foreign
(Loss) income from operations before income taxes
The income tax provision for the years ended December 31, 2025 and 2024 consisted of the following:
Current:
Federal
State
Foreign
Current income tax provision
Deferred:
Federal
State
Foreign
Increase in valuation allowance, net
Deferred income tax (benefit) provision
Total income tax provision
The foreign income tax provision for 2025 benefited from a lower statutory income tax rate on the earnings of the Corporation's majority-owned Chines e joint venture as a result of the joint venture qualifying as a high-tech enterprise (“HTE”). As an HTE, the earnings of the Chinese joint venture are taxed at a rate of 15 % (versus 25 %). The effect on the income tax provision was a benefit of $ 1,000 for 2025 when compared to the income tax provision for 2024.
The state income tax provision for 2025 consisted primarily of Georgia, North Carolina, Pennsylvania, and Virginia. The state income provision for 2024 consisted primarily of Pennsylvania and Virginia.
The difference between statutory U.S. federal income tax and the Corporation’s effective income tax for the years ended December 31, 2025 and 2024 was as follows:
Amount
Percent
Amount
Percent
U.S. federal income tax, computed at the statutory rate
State and local income taxes, net of federal tax benefit
Foreign tax effects:
China
Statutory tax rate difference from non-U.S. earnings
Research and development
Changes in valuation allowance
Enacted changes in tax laws or rates
Other
United Kingdom
Statutory tax rate difference from non-U.S. earnings
Changes in valuation allowance
Deconsolidation of UES-UK
Other
Sweden
Statutory tax rate difference from non-U.S. earnings
Changes in valuation allowance
Return-to-provision adjustments
Other
Other foreign jurisdictions
Changes in valuation allowances
Nontaxable or nondeductible items:
Stock-based compensation
Deductible compensation limitation
Worthless stock deduction of UES-UK
Deconsolidation of UES-UK
Other
Other – net
Total income tax provision
Income taxes paid, net of refunds, by jurisdiction as of December 31, 2025 and 2024 were as follows:
U.S. Federal
U.S. State
Non-U.S.
Slovenia
China
Income tax payments, net of refunds
Deferred income tax assets and liabilities as of December 31, 2025 and 2024 are summarized in the following table. Unremitted earnings of the Corporation’s non-U.S. subsidiaries and affiliates are deemed to be permanently re-invested and, accordingly, no deferred income tax liability has been recorded. If the Corporation were to remit any foreign earnings to the U.S., the estimated tax impact would be insignificant.
Assets:
Net operating loss – domestic
Net operating loss – foreign
Net operating loss – state
Asbestos-related liability
Sale-leaseback
Employment – related liabilities
Interest expense limitation
Pension liability – foreign
Pension liability – domestic
Unearned revenue
Inventory related
Impairment charge associated with investment in Anhui
Operating lease right-of-use liabilities
Capital loss carryforwards
Other
Gross deferred income tax assets
Valuation allowance
Liabilities:
Depreciation
Operating lease assets
Intangible assets – finite life
Intangible assets – indefinite life
Estimated recovery - UES-UK
Other
Gross deferred income tax liabilities
Net deferred income tax assets
At December 31, 2025 , the Corporation has U.S. federal net operating loss carryforwards of $ 111,952 , which can be carried forward indefinitely but will be limited to 80% of the Corporation’s taxable income in any given year. Additionally, at December 31, 2025 , the Corporation had state net operating loss carryforwards of $ 93,393 , which begin to expire in 2026 , and foreign net operating loss carryforwards of $ 30,328 , which do not expire.
Valuation allowances are recorded against the majority of the Corporation’s deferred income tax assets. The Corporation will maintain the valuation allowances until there is sufficient evidence to support the reversal of all or some portion of the allowances. Given the Corporation’s anticipated future earnings in Sweden and the United States, the Corporation believes there is a reasonable possibility within the next 12 months , sufficient positive evidence may become available to allow the Corporation to conclude some portion of the valuation allowance will no longer be needed. Release of any portion of the valuation allowance would result in the recognition of deferred income tax assets on the consolidated balance sheet and a decrease to income tax expense in the period the release is recorded. The exact timing and the amount of the valuation allowance released are subject to, among many items, the level of profitabilityachieved. Once the valuation allowance is completely reversed, a tax provision would be recognized on future earnings.
Unrecognized tax benefits and changes in unrecognized tax benefits for the years ended December 31, 2025 and 2024 are insignificant. If the unrecognized tax benefits were recognized, the effect on the Corporation’s effective income tax rate would also be insignificant. The amount of penalties and interest recognized in the consolidated balance sheets as of December 31, 2025 and 2024 and in the consolidated statements of operations for 2025 and 2024 is insignificant.
On July 4, 2025, the One Big Beautiful Bill Act (“OBBBA”) was enacted in the United States. OBBBA introduces multiple tax law and legislative changes, including modifications to income tax provisions such as business interest expense limitations, domestic research and development expenses and U.S. taxation of international earnings. It also reinstates 100% bonus depreciation for property acquired and placed into service on or after January 19, 2025. The Corporation has recognized the effects of the OBBBA provisions in its financial results to the extent they are applicable for the year ended December 31, 2025. Certain provisions of the OBBBA have effective dates after December 31, 2025. The Corporation will continue to evaluate the impact of these provisions on its future consolidated financial statements.
The Corporation is subject to taxation and fi les income tax returns in the United States, various states and foreign jurisdictions, and remains subject to examination by tax authorities for tax years 2022 – 2025.
NOTE 22 – ENVIRONMENTAL MATTERS:
The Corporation is currently performing certain remedial actions in connection with the sale of real estate previously owned and periodically incurs costs to maintain compliance with enviro nmental laws and regulations. Environmental exposures are difficult to assess and estimate for numerous reasons, including lack of reliable data, the multiplicity of possible solutions, the years of remedial and monitoring activity required, and identification of new sites. The undiscounted potential liability for remedial actions and environmental compliance measures approximated $ 100 as o f December 31, 2025 and 2024 .
NOTE 23 – RELATED PARTIES:
ATR periodically has loans outstanding with its minority shareholder. During 2025, no loans were outstanding. During 2024, $ 664 (RMB 4,713 ) of outstanding loans were repaid by December 31, 2024. Interest on borrowings accrued at the three -to- five-year loan interest rate set by the People’s Bank of China, which approximated 4.35 % for the year ended December 31, 2024. Interest paid in 2024 approximated $ 2 (RMB 17 ). No interest was outstanding as of December 31, 2024.
ATR has sales to and purchases from ATR’s minority shareholder and its affiliates and sales to a shareholder of one of the Corporation’s other joint ventures in China and its affiliates. These sales and purchases, which were in the ordinary course of business, for the years ended December 31, 2025 and 2024, were as follows:
USD
RMB
USD
RMB
Purchases from related parties
Sales to related parties
Balances outstanding with ATR’s minority shareholder including its affiliates and the other joint venture's shareholder and its affiliates, as of December 31, 2025 and 2024, were as follows:
USD
RMB
USD
RMB
Accounts receivable from related parties
Accounts payable to related parties
The manufacturing facilities of ATR are located on land leased by ATR from the other partner. The land lease commenced in 2007 , the date the joint venture was formed, and continues through 2054 , the expected end date of the joint venture, and includes variable lease payment provisions based on the land standard price prevailing in Taiyuan, China, where the joint venture is located. Rent paid by ATR to the other partner approximated $ 122 (RMB 892 ) for each of the years ended December 31, 2025 and 2024, which is included in purchases from related parties.
Subsequent to the Filing Date, the Corporation had sales to and purchases from UES-UK to fulfill orders on existing customer contracts. These sales and purchases, which were in the ordinary course of business, for the post-deconsolidation period ended December 31, 2025, were follows:
Accounts receivable from UES-UK as of December 31, 2025
Sales to UES-UK from the Filing Date to December 31, 2025
Accounts payable to UES-UK as of December 31, 2025
Purchases from UES-UK from the Filing Date to December 31, 2025
NOTE 24 – BUSINESS SEGMENTS:
The Corporation organizes its business into two operating segments: FCEP and ALP.
The FCEP segment produces forged hardened steel rolls, cast rolls and forged engineered products (“FEP”). Forged hardened steel rolls are used primarily in hot and cold rolling mills by producers of steel, aluminum and other metals. Cast rolls, which are produced in a variety of iron and steel qualities, are used mainly in hot strip mills, medium/heavy section mills, roughing mills, and plate mills. FEP principally are sold to customers in the steel distribution market, the oil and gas industry, and the aluminum and plastic extrusion industries. The segment has operations in the United States, Sweden, and Slovenia and equity interests in two joint venture companies in China. Collectively, the segment primarily competes with European, Asian, North American and South American companies in both domestic and foreign markets and distributes a significant portion of its products through sales offices located throughout the world.
The ALP segment includes Aerofin, Buffalo Air Handling and Buffalo Pumps, all divisions of Air & Liquid. Aerofin produces custom-engineered finned tube heat exchange coils and related heat transfer products for a variety of industries including original equipment manufacturers and commercial, nuclear power generation and industrial manufacturing. Buffalo Air Handling produces large custom-designed air handling systems for institutional (e.g., hospital, university), pharmaceutical and general industrial building markets. Buffalo Pumps manufactures centrifugal pumps for the fossil-fueled power generation, marine defense and industrial refrigeration industries. The segment has operations in Virginia and New York with headquarters in Carnegie, Pennsylvania. The segment utilizes an independent group of sales offices located throughout the United States and Canada.
Net sales by product line for the years ended December 31, 2025 and 2024 are outlined below.
Net Sales by Product Line
Forged and Cast Engineered Products:
Forged and cast mill rolls
Forged engineered products
Total
Air and Liquid Processing:
Air handling systems
Heat exchange coils
Centrifugal pumps
Total
Consolidated total
The accounting policies for each segment are the same as those described in Note 1 , Summary of Significant Accounting Policies . The Chief Executive Officer is the Corporation’s chief operating decision maker (“CODM”).
The Corporation measure s each segment’s profitability based on (loss) income from operations, which excludes interest expense, other income and expense items and Corporate costs. Along with other measures, t he CODM uses segment (loss) income from operations when assessing segment performance and when making decisions to allocate financial resources between segments, primarily through periodic budgeting and segment performance reviews.
Summarized financial information concerning the Corporation’s reportable segments is shown in the following tables.
For the Year Ended December 31, 2025
For the Year Ended December 31, 2024
FCEP
ALP
Total
FCEP
ALP
Total
Net sales (1)
Less: (2)
Cost of products sold (excluding depreciation and amortization) (3)
Selling and administrative
Depreciation and amortization
Charge (credit) for asbestos-related costs, net (4)
Deconsolidation Charge
Severance charge
Loss on disposal of assets
Segment (loss) income from operations (5)
Reconciliation to (loss) income before income taxes
Other income - net (6)
Interest expense
Unallocated corporate costs (7)
(Loss) income before income taxes
For the FCEP segment, one customer accounted for approximately 10 % of its net sales in 2025 and another customer accounted for approximately 11 % of its net sales in 2024. For the ALP segment, one customer accounted for approximately 12 % of its net sales in 2025 and no customers exceeded 10 % of its net sales in 2024.
The significant expense categories and amounts align with the segment-level information regularly provided to the CODM.
Costs of products sold (excluding depreciation and amortization) for 2025 includes employee-retention credits, which are refundable employer payroll taxes for certain eligible businesses affected by the COVID-19 pandemic received from the Internal Revenue Service (the “ Employee-Retention Credits ” ) of $ 735 for the FCEP ($ 456 ) and ALP ($ 279 ) segments.
For 2025, the charge for asbestos-related costs represents primarily an increase in the estimated settlement costs of pending and future asbestos claims, net of additional insurance recoveries, and a benefit from the reduction in the estimated defense-to-indemnity cost ratio from 55 % to 50 % . For 2024, the credit for asbestos-related costs represents primarily a decrease in the estimated settlement costs of pending and future asbestos claims, net of additional insurance recoveries, and a benefit from the reduction in the estimated defense-to-indemnity cost ratio from 60 % to 55 % .
FCEP segment loss from operations for 2025 includes the Exit Charges of $ 10,790 associated with exiting UES-UK and closing AUP.
Other income, net includes investment-related income, net pension and other postretirement income, losses on foreign exchange transactions, unrealized gains on Rabbi trust investments, and other items not included in the definition of segment (loss) income from operations.
Unallocated corporate costs represent the operating expenses of the corporate office and other costs not allocated to the segments.
Capital Expenditures
Depreciation and
Amortization Expense
Identifiable Assets (2)
Forged and Cast Engineered Products (1)
Air and Liquid Processing
Corporate
Consolidated total
Long-lived Assets (3)
Net Sales by
Geographic Area (4)
(Loss) Income
Before Income Taxes
Geographic Areas:
United States (5)
Foreign (6)
Consolidated total
Depreciation and amortization expense for 2025 includes accelerated depreciation of $ 3,327 associated with exiting UES-UK and closing AUP.
Identifiable assets for the FCEP segment include investments in joint ventures of $ 835 at December 31, 2025 and $ 2,175 at December 31, 2024. The decrease represents the Corporation's interest, through UES-UK, in Gongchang which became as asset of the Administrators as of the Filing Date. Identifiable assets for the ALP segment include asbestos-related insurance receivables of $ 126,838 and $ 139,295 at December 31, 2025 and 2024, respectively. Identifiable assets for Corporate represent primarily cash and cash equivalents and other items not allocated to reportable segments.
Long-lived assets exclude deferred income tax assets. Long-lived assets in the United States include noncurrent asbestos-related insurance receivables of $ 107,838 and $ 124,295 at December 31, 2025 and 2024, respectively. Foreign long-lived assets primarily represent assets of the foreign operations.
Net sales are attributed to the geographic areas based on the location of the customer. Sales to individual foreign countries were less than 10 % of consolidated net sales for each of the years. The majority of foreign sales are attributable to the FCEP segment.
In 2025, loss before income taxes for the United States includes a charge for asbestos-related costs of $ 12,352 and Exit Charges of $ 1,480 o ffset by the estimated recovery by the lenders under the Credit Agreement, if any, after the costs and expenses of the Structured Insolvency of $ 7,500 , and t he Employee-Retention credits of $ 735 . In 2024, income before income taxes for the United States includes a credit for asbestos-related costs of $ ( 4,184 ) .
Loss before income taxes for foreign for 2025 includes a portion of the Deconsolidation Charge approximating $ 48,924 (representing the write-off of the investment in UES-UK, including cash on hand, and the other comprehensive losses) and Exit Charges of $ 9,310 .
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
Shareholders and Board of Directors
Ampco-Pittsburgh Corporation
Carnegie, Pennsylvania
Opinion on the Consolidated Financial Statements
We have audited the accompanying consolidated balance sheets of Ampco-Pittsburgh Corporation (the “Corporation”) as of December 31, 2025 and 2024, the related consolidated statements of operations, comprehensive loss, shareholders’ equity, and cash flows for each of the years then ended, and the related notes (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Corporation at December 31, 2025 and 2024, and the results of its operations and its cash flows for each of the years then ended, in conformity with accounting principles generally accepted in the United States of America.
Basis for Opinion
These consolidated financial statements are the responsibility of the Corporation’s management. Our responsibility is to express an opinion on the Corporation’s consolidated financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Corporation in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. The Corporation is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Corporation’s internal control over financial reporting. Accordingly, we express no such opinion.
Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.
Critical Audit Matter
The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.
Asbestos Liabilities and Related Insurance Receivables
As described in Notes 1 and 20 to the Corporation’s consolidated financial statements, the Corporation has accrued asbestos liabilities of $198.3 million ($28.0 million current and $170.3 million long term) and recorded asbestos-related insurance receivables of $126.8 million ($19.0 million current and $107.8 million noncurrent) as of December 31, 2025. These liabilities and insurance receivables relate to claims that have been asserted alleging personal injury from exposure to asbestos-containing components historically used in certain products manufactured by predecessors of the Corporation’s Air & Liquid Systems Corporation. The Corporation utilizes third-party experts to assist in developing (i) an estimate of the asbestos liability for the probable pending and future claims over the period that the Corporation believes it can reasonably estimate such claims and (ii) an estimate of the insurance receivable for the insurance proceeds expected to be received under existing policies associated with the asbestos liabilities.
We identified the valuation of asbestos liabilities and insurance receivables as a critical audit matter. The principal considerations for our determination are: (i) the subjectivity of estimating projected claims including the period for which the Corporation can reasonably estimate the asbestos liabilities, (ii) the estimation process for projected settlement values of reported and unreportedclaims including the number of claims expected to be filed and adjudicated, the disease type, and the settlement and defense costs to estimate the asbestos liabilities, and (iii) the complexity of determining the associated insurance receivables including the estimated settlement costs for the asbestos liabilities and the associated defense costs, the continued financial solvency of the insurance carriers, and legal interpretation of rights for recovery under the insurance policies and the related settlement agreements. Auditing these elements involved especially
challenging auditor judgment due to the nature and extent of audit effort required to address these matters, including the extent of specialized skill or knowledge needed.
The primary procedures we performed to address this critical audit matter included:
Assessing the qualifications, experience, and objectivity of the Corporation’s third-party experts;
Testing the underlying historical data that served as a basis for the valuation of the asbestos liabilities for completeness and accuracy through the examination of relevant source documents;
Testing the insurance policies for existence and coverage amounts including independent confirmation of new and amended policies and the related settlement agreements directly with insurance carriers;
Evaluating the ongoing financial solvency of a selection of insurance carriers utilizing publicly available financial information; and
Utilizing personnel with specialized knowledge and skill in actuarial science to assist in: (i) evaluating the valuation methodology utilized by the Corporation to estimate the asbestos liabilities, (ii) testing the computation of the asbestos liability estimate performed by the Corporation’s third-party experts, (iii) evaluating the period utilized by the Corporation to project probable pending and future claims for reasonableness, and (iv) evaluating the reasonableness of assumptions utilized to develop the estimates of future indemnification costs for the asbestos liabilities.
/s/ BDO USA, P.C.
We have served as the Corporation’s auditor since 2020.
