UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q


☒	QUARTERLY REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, ~~2022~~2023


☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number 1-898

AMPCO-PITTSBURGH ~~CORPORATION~~CORPORATION



Pennsylvania	25-1117717
(State of Incorporation)	(I.R.S. Employer Identification No.)

726 Bell Avenue, Suite 301

Carnegie, Pennsylvania15106

(Address of principal executive offices)

~~(412)~~ (412) 456-4400

(Registrant’s telephone number)

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, $1 par value	AP	New York Stock Exchange
Series A Warrants to purchase shares of Common Stock	AP WS	NYSE American Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter periods that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§(§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


~~Large accelerated filer~~	☐	~~Accelerated filer~~	☐	~~Emerging growth company~~	☐

~~Non-accelerated~~Large accelerated filer	☒☐	Accelerated filer	☐	Emerging growth company	☐

Non-accelerated filer	☒	Smaller reporting company	☒

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

On November 9, ~~2022, 19,403,519~~2023, 19,865,749 common shares were outstanding.

AMPCO-PITTSBURGH CORPORATION

INDEX


			Page No.
Part I –	Financial Information:

	Item 1 –	Financial Statements (Unaudited)

		Condensed Consolidated Balance Sheets – S~~eptember~~September 30,~~, 2022,~~ 2023 and December 31, ~~202~~12022	3

		Condensed Consolidated Statements of Operations – Three and Nine ~~Months~~months Ended September 30, ~~2022,~~2023 and ~~2021~~2022	4

		Condensed Consolidated Statements of Comprehensive Loss – Three and Nine ~~Months~~months Ended September 30, ~~2022,~~2023 and ~~2021~~2022	5
		Condensed Consolidated Statements of Shareholders’ Equity – Three and Nine ~~Months~~months Ended September 30, ~~2022,~~2023 and ~~2021~~2022	6

		Condensed Consolidated Statements of Cash Flows – Nine ~~Months~~months Ended September 30, ~~2022,~~2023 and ~~2021~~2022	7

		Notes to Condensed Consolidated Financial Statements	8

	Item 2 –	Management’s Discussion and Analysis of Financial Condition and Results of Operations	2123

	Item 3 –	Quantitative and Qualitative Disclosures About Market Risk	2832

	Item 4 –	Controls and Procedures	2832

Part II –	Other Information:

	Item 1 –	Legal Proceedings	2934

	Item 1A –	Risk Factors	2934

	Item 6 5 –	Other Information	34

	Item 6 –	Exhibits	2935

Signatures			3036

PART I – FINANCIAL INFORMATION

AMPCO-PITTSBURGH CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS

(UNAUDITED)

(in thousands, except par value)


	September 30, 2022			December 31, 2021			September 30, 2023			December 31, 2022
Assets
Current assets:
Cash and cash equivalents	$	12,190		$	10,337		$	6,070		$	8,735
Receivables, less allowance for doubtful accounts of $906 as of September 30, 2022, and $1,240 as of December 31, 2021		76,341			68,829
Receivables from related parties (Note 17)		1,881			0
Trade receivables								83,148			77,426
Trade receivables from related parties								133			1,066
Inventories		92,511			88,198			130,748			121,739
Insurance receivable – asbestos		16,000			16,000			15,000			15,000
Other current assets		5,775			4,933			7,437			7,442
Total current assets		204,698			188,297			242,536			231,408
Property, plant and equipment, net		153,028			158,563			156,088			154,998
Operating lease right-of-use assets		3,547			4,056			4,868			3,522
Insurance receivable – asbestos		97,549			105,297			81,393			90,910
Deferred income tax assets		2,622			2,176			2,141			2,141
Intangible assets, net		4,970			6,204			4,727			5,194
Investments in joint ventures		2,175			2,175			2,175			2,175
Prepaid pensions		10,516			11,963			7,490			7,242
Other noncurrent assets		5,260			6,901			4,696			5,184
Total assets	$	484,365		$	485,632		$	506,114		$	502,774
Liabilities and Shareholders’ Equity
Current liabilities:
Accounts payable	$	37,584		$	43,105		$	42,613		$	43,209
Accounts payable to related parties (Note 17)		891			1,125
Accounts payable to related parties								876			412
Accrued payrolls and employee benefits		12,628			15,954			14,534			11,796
Debt – current portion		15,376			20,007			13,608			12,410
Operating lease liabilities – current portion		630			641			946			635
Asbestos liability – current portion		23,000			23,000			23,000			23,000
Other current liabilities		29,174			21,210			23,181			24,763
Total current liabilities		119,283			125,042			118,758			116,225
Employee benefit obligations		54,167			62,114			39,034			43,431
Asbestos liability		142,631			157,314			114,354			130,575
Long-term debt		82,914			40,912			114,182			93,061
Noncurrent operating lease liabilities		2,917			3,415			3,922			2,886
Deferred income tax liabilities		3,626			3,858			1,343			2,518
Other noncurrent liabilities		808			1,171			236			682
Total liabilities		406,346			393,826			391,829			389,378
Commitments and contingent liabilities (Note 8)
Commitments and contingent liabilities (Note 9)
Shareholders’ equity:
Common stock – par value $1; authorized 40,000 shares; issued and outstanding 19,403 shares as of September 30, 2022, and 19,184 shares as of December 31, 2021		19,403			19,184
Common stock – par value $1; authorized 40,000 shares; issued and outstanding 19,729 shares as of September 30, 2023 and 19,404 shares as of December 31, 2022								19,729			19,404
Additional paid-in capital		175,504			174,561			176,680			175,656
Retained deficit		(53,172	)		(56,066	)		(31,161	)		(32,322	)
Accumulated other comprehensive loss		(72,324	)		(55,106	)		(60,804	)		(58,412	)
Total Ampco-Pittsburgh shareholders’ equity		69,411			82,573			104,444			104,326
Noncontrolling interest		8,608			9,233			9,841			9,070
Total shareholders’ equity		78,019			91,806			114,285			113,396
Total liabilities and shareholders’ equity	$	484,365		$	485,632		$	506,114		$	502,774

See Notes to Condensed Consolidated Financial Statements.

AMPCO-PITTSBURGH CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(UNAUDITED)

(in thousands, except per share amounts)


	Three Months Ended September 30,						Nine Months Ended September 30,						Three Months Ended September 30,						Nine Months Ended September 30,
	2022			2021			2022			2021			2023			2022			2023			2022
Net sales:
Net sales	$	97,228		$	78,624		$	289,696		$	253,727		$	102,200		$	97,228		$	311,491		$	289,696
Net sales to related parties (Note 17)		2,419			2,561			6,959			6,686
Net sales to related parties														18			2,419			2,741			6,959
Total net sales		99,647			81,185			296,655			260,413			102,218			99,647			314,232			296,655
Operating costs and expenses:
Costs of products sold (excluding depreciation and amortization)		84,378			67,990			250,685			213,011			84,490			84,101			256,333			249,700
Selling and administrative		11,089			10,910			31,941			34,538			11,821			11,089			38,101			31,941
Depreciation and amortization		4,206			4,279			13,133			13,515			4,382			4,206			13,110			13,133
Loss on disposal of assets		48			367			47			334
Credit for asbestos litigation														(191	)		-			(191	)		-
(Gain) loss on disposal of assets														(6	)		48			(124	)		47
Total operating costs and expenses		99,721			83,546			295,806			261,398			100,496			99,444			307,229			294,821
(Loss) income from operations		(74	)		(2,361	)		849			(985	)
Other income (expense):
Income from operations														1,722			203			7,003			1,834
Other (expense) income:
Investment-related income		507			14			513			1,079			98			507			114			513
Interest expense		(1,486	)		(834	)		(3,684	)		(2,672	)		(2,468	)		(1,486	)		(6,784	)		(3,684	)
Other income – net		3,174			2,006			7,019			4,694			1,959			3,174			3,424			7,019
Total other income		2,195			1,186			3,848			3,101
Income (loss) before income taxes		2,121			(1,175	)		4,697			2,116
Total other (expense) income														(411	)		2,195			(3,246	)		3,848
Income before income taxes														1,311			2,398			3,757			5,682
Income tax provision		(987	)		(291	)		(1,432	)		(2,044	)		(76	)		(987	)		(541	)		(1,432	)
Net income (loss)		1,134			(1,466	)		3,265			72
Net income														1,235			1,411			3,216			4,250
Less: Net income attributable to noncontrolling interest		288			123			371			431			426			288			1,308			371
Net income (loss) attributable to Ampco-Pittsburgh	$	846		$	(1,589	)	$	2,894		$	(359	)
Net income attributable to Ampco-Pittsburgh													$	809		$	1,123		$	1,908		$	3,879

Net income (loss) per share attributable to Ampco- Pittsburgh common shareholders:
Net income per share attributable to Ampco- Pittsburgh common shareholders:
Basic	$	0.04		$	(0.08	)	$	0.15		$	(0.02	)	$	0.04		$	0.06		$	0.10		$	0.20
Diluted	$	0.04		$	(0.08	)	$	0.15		$	(0.02	)	$	0.04		$	0.06		$	0.10		$	0.20

Weighted average number of common shares outstanding:
Weighted-average number of common shares outstanding:
Basic		19,396			19,093			19,291			18,905			19,729			19,396			19,580			19,291
Diluted		19,522			19,093			19,473			18,905			19,729			19,522			19,633			19,473

See Notes to Condensed Consolidated Financial Statements.

AMPCO-PITTSBURGH CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

(UNAUDITED)

(in thousands)

	Three Months Ended September 30,						Nine Months Ended September 30,
	2022			2021			2022			2021			Three Months Ended September 30,						Nine Months Ended September 30,
Net income (loss)	$	1,134		$	(1,466	)	$	3,265		$	72
													2023			2022			2023			2022
Net income													$	1,235		$	1,411		$	3,216		$	4,250
Other comprehensive loss, net of income tax where applicable:
Adjustments for changes in:
Foreign currency translation		(8,745	)		(2,499	)		(19,787	)		(2,041	)		(3,150	)		(8,745	)		(2,113	)		(19,787	)
Unrecognized employee benefit costs (including effects of foreign currency translation)		891			275			1,441			247			181			891			45			1,441
Fair value of cash flow hedges		(251	)		(8	)		(809	)		547			19			(251	)		(81	)		(809	)
Reclassification adjustments for items included in net income (loss):
Reclassification adjustments for items included in net income:
Amortization of unrecognized employee benefit costs		281			457			833			1,371			(235	)		281			(728	)		833
Settlements of cash flow hedges		367			(304	)		108			(1,024	)		135			367			(52	)		108
Other comprehensive loss		(7,457	)		(2,079	)		(18,214	)		(900	)		(3,050	)		(7,457	)		(2,929	)		(18,214	)
Comprehensive loss		(6,323	)		(3,545	)		(14,949	)		(828	)
Less: Comprehensive (loss) income attributable to noncontrolling interest		(269	)		124			(625	)		534
Comprehensive (loss) income														(1,815	)		(6,046	)		287			(13,964	)
Less: Comprehensive income (loss) attributable to noncontrolling interest														367			(269	)		771			(625	)
Comprehensive loss attributable to Ampco-Pittsburgh	$	(6,054	)	$	(3,669	)	$	(14,324	)	$	(1,362	)	$	(2,182	)	$	(5,777	)	$	(484	)	$	(13,339	)

See Notes to Condensed Consolidated Financial Statements.

AMPCO-PITTSBURGH CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY

(UNAUDITED)

(in thousands)


Three Months Ended September 30, 2023																		Common Stock		Additional Paid-in Capital			Retained Deficit			Accumulated Other Comprehensive Loss			Noncontrolling Interest			Total
Balance at July 1, 2023																		$	19,729	$	176,160		$	(31,970	)	$	(57,813	)	$	9,474		$	115,580
Stock-based compensation																					520												520
Comprehensive income (loss):
Net income																								809						426			1,235
Other comprehensive loss																											(2,991	)		(59	)		(3,050	)
Comprehensive income (loss)																														367			(1,815	)
Balance at September 30, 2023																		$	19,729	$	176,680		$	(31,161	)	$	(60,804	)	$	9,841		$	114,285

Three Months Ended September 30, 2022	Common Stock		Additional Paid-in Capital			Retained Deficit			Accumulated Other Comprehensive Loss			Noncontrolling Interest			Total
Balance at July 1, 2022	$	19,355	$	174,868		$	(54,018	)	$	(65,424	)	$	8,877		$	83,658		$	19,355	$	174,868		$	(32,982	)	$	(65,424	)	$	8,877		$	104,694
Stock-based compensation				684												684					684												684
Comprehensive loss:
Net income							846						288			1,134								1,123						288			1,411
Other comprehensive loss										(6,900	)		(557	)		(7,457	)										(6,900	)		(557	)		(7,457	)
Comprehensive loss													(269	)		(6,323	)													(269	)		(6,046	)
Shareholder exercise of warrants (Note 9)		48		(48	)											0
Issuance of common stock excluding excess tax benefits of $0		0		0												0
Shareholder exercise of warrants (Note 10)																			48		(48	)											-
Balance at September 30, 2022	$	19,403	$	175,504		$	(53,172	)	$	(72,324	)	$	8,608		$	78,019		$	19,403	$	175,504		$	(31,859	)	$	(72,324	)	$	8,608		$	99,332

Three Months Ended September 30, 2021
Balance at July 1, 2021	$	19,076	$	173,446		$	(42,141	)	$	(67,618	)	$	8,845		$	91,608
Nine Months Ended September 30, 2023
Balance at January 1, 2023, as reported																		$	19,404	$	175,656		$	(32,322	)	$	(58,412	)	$	9,070		$	113,396
Impact of new accounting standard (Note 1)																								(747	)								(747	)
Balance at January 1, 2023, as adjusted																			19,404		175,656			(33,069	)		(58,412	)		9,070			112,649
Stock-based compensation				515												515					1,630												1,630
Comprehensive income (loss):
Net (loss) income							(1,589	)					123			(1,466	)
Other comprehensive (loss) income										(2,080	)		1			(2,079	)
Comprehensive income (loss):													124			(3,545	)
Shareholder exercise of warrants (Note 9)		16		75												91
Issuance of common stock excluding excess tax benefits of $0		2		(10	)											(8	)
Balance at September 30, 2021	$	19,094	$	174,026		$	(43,730	)	$	(69,698	)	$	8,969		$	88,661
Comprehensive income:
Net income																								1,908						1,308			3,216
Other comprehensive loss																											(2,392	)		(537	)		(2,929	)
Comprehensive income																														771			287
Issuance of common stock excluding excess tax benefits of $0																			325		(606	)											(281	)
Balance at September 30, 2023																		$	19,729	$	176,680		$	(31,161	)	$	(60,804	)	$	9,841		$	114,285

Nine Months Ended September 30, 2022
Balance at January 1, 2022	$	19,184	$	174,561		$	(56,066	)	$	(55,106	)	$	9,233		$	91,806		$	19,184	$	174,561		$	(35,738	)	$	(55,106	)	$	9,233		$	112,134
Stock-based compensation				1,512												1,512					1,512												1,512
Comprehensive loss:
Net income							2,894						371			3,265								3,879						371			4,250
Other comprehensive loss										(17,218	)		(996	)		(18,214	)										(17,218	)		(996	)		(18,214	)
Comprehensive loss													(625	)		(14,949	)													(625	)		(13,964	)
Shareholder exercise of warrants (Note 9)		48		(48	)											0
Issuance of common stock excluding excess tax benefits of $0		171		(521	)											(350	)
Shareholder exercise of warrants (Note 10)																			48		(48	)											-
Issuance of common stock excluding excess tax benefits of $0																			171		(521	)											(350	)
Balance at September 30, 2022	$	19,403	$	175,504		$	(53,172	)	$	(72,324	)	$	8,608		$	78,019		$	19,403	$	175,504		$	(31,859	)	$	(72,324	)	$	8,608		$	99,332

Nine Months Ended September 30, 2021
Balance at January 1, 2021	$	18,312	$	170,318		$	(43,371	)	$	(68,695	)	$	8,435		$	84,999
Stock-based compensation				1,543												1,543
Comprehensive income (loss):
Net (loss) income							(359	)					431			72
Other comprehensive (loss) income										(1,003	)		103			(900	)
Comprehensive income (loss)													534			(828	)
Shareholder exercise of warrants (Note 9)		575		2,733												3,308
Issuance of common stock excluding excess tax benefits of $0		207		(568	)											(361	)
Balance at September 30, 2021	$	19,094	$	174,026		$	(43,730	)	$	(69,698	)	$	8,969		$	88,661

See Notes to Condensed Consolidated Financial Statements.

AMPCO-PITTSBURGH CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)

(in thousands)


	Nine Months Ended September 30,						Nine Months Ended September 30,
	2022			2021			2023			2022
Net cash flows used in operating activities	$	(20,405	)	$	(4,398	)	$	(10,327	)	$	(20,405	)

Cash flows from investing activities:
Cash flows used in investing activities:
Purchases of property, plant and equipment		(13,003	)		(11,982	)		(14,134	)		(13,003	)
Proceeds from sale of property, plant and equipment		3			249			128			3
Purchases of long-term marketable securities		(496	)		(31	)		(70	)		(496	)
Proceeds from sale of long-term marketable securities		980			243			561			980
Net cash flows used in investing activities		(12,516	)		(11,521	)		(13,515	)		(12,516	)

Cash flows from financing activities:
Proceeds from revolving credit facility		43,000			19,016			28,205			43,000
Payments on revolving credit facility		(27,283	)		(8,500	)		(15,693	)		(27,283	)
Proceeds from sale and leaseback financing arrangement		15,500			0
Proceeds from sale and leaseback financing arrangements								2,500			15,500
Payments on sale and leaseback financing arrangements		(264	)		(176	)		(180	)		(264	)
Proceeds from equipment financing facility		4,014			0			6,822			4,014
Proceeds from related party debt (Note 17)		5,776			0
Repayments of related party debt (Note 17)		(4,251	)		(1,065	)
Proceeds from related party debt (Note 18)								1,099			5,776
Repayment of related party debt (Note 18)								(1,096	)		(4,251	)
Repayments of debt		(480	)		(489	)		(334	)		(480	)
Proceeds from shareholder exercise of warrants (Note 9)		0			3,308
Debt issuance costs		(104	)		(485	)		-			(104	)
Net cash flows provided by financing activities		35,908			11,609			21,323			35,908

Effect of exchange rate changes on cash and cash equivalents		(1,134	)		(281	)		(146	)		(1,134	)

Net increase (decrease) in cash and cash equivalents		1,853			(4,591	)
Net (decrease) increase in cash and cash equivalents								(2,665	)		1,853
Cash and cash equivalents at beginning of period		10,337			16,842			8,735			10,337
Cash and cash equivalents at end of period	$	12,190		$	12,251		$	6,070		$	12,190

Supplemental information:
Income tax payments	$	959		$	1,344
Income tax payments, net of refunds							$	1,787		$	959
Interest payments	$	3,896		$	1,810		$	5,739		$	3,896

Non-cash investing and financing activities:
Purchases of property, plant and equipment in current liabilities	$	1,009		$	1,339		$	2,365		$	1,009
Finance lease right-of-use assets exchanged for lease liabilities	$	1,105		$	1,250		$	144		$	1,105
Operating lease right-of-use assets exchanged for lease liabilities	$	191		$	53		$	1,953		$	191

See Notes to Condensed Consolidated Financial Statements.

AMPCO-PITTSBURGH CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

(in thousands, except per share amounts)

Overview of the Business

Ampco-Pittsburgh Corporation (the “Corporation”) manufactures and sells 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~~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 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 and cold strip mills, medium/heavy section mills and plate mills. FEP principally are sold to customers in the steel distribution market, oil and gas industry and the aluminum and plastic extrusion industries. The segment has operations in the United States, England, Sweden, and Slovenia and equity interests in three joint venture companies in China. Collectively, the segment primarily competes with European, Asian and 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 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 ~~OEM/~~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~~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 distributes a significant portion of its products through ~~a common~~an independent group of sales offices located throughout the United States and Canada.

While the Corporation is currently operating at ~~more~~ normal levels, ~~following the emergence~~it continues to be challenged by lingering global economic effects of ~~the coronavirus (“COVID-19”) pandemic in 2020, lingering effects continue, some of which are being exacerbated by~~a post-pandemic environment and repercussions from the Russia-Ukraine conflict, ~~including periodic~~among other events, including:

•

Periodic disruptions to the global supply chain ~~global~~for the Corporation, its vendors and its customers,

•

Global inflationary pressures,

•

Depressed business activity in Europe and ~~delays in receiving~~Asia (specifically China), and ~~shipping product due to the lack of transportation.~~

•

Global economic uncertainty.

The Corporation is actively monitoring, and will continue to actively monitor, the ~~pandemic~~geopolitical and economic consequence of these conditions and any other developments relevant to the ~~Russia-Ukraine conflict and~~Corporation's business including the potential impact on its operations, financial condition, liquidity, suppliers, industry, and workforce.

Note 1 – Unaudited Condensed Consolidated Financial Statements

The unaudited condensed consolidated balance sheet as of September 30, ~~2022,~~2023, the unaudited condensed consolidated statements of operations, comprehensive loss and shareholders’ equity for the three and nine months ended September 30, ~~2022,~~2023 and ~~2021,~~2022, and cash flows for the nine months ended September 30, ~~2022,~~2023 and ~~2021,~~2022 have been prepared by the Corporation. In the opinion of management, all adjustments, consisting of only normal and recurring adjustments necessary to present fairly the financial position, results of operations and cash flows for the periods presented, have been made. The results of operations for the three and nine months ended September 30, ~~2022,~~2023 are not necessarily indicative of the operating results expected for the full year.

Certain information and footnote disclosures normally included in the annual financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) have been condensed or omitted. Effective December 31, 2022, the Corporation changed its method of accounting for the cost of its domestic inventories from the last in, first out (“LIFO”) method to the first in first out (“FIFO”) method. Accordingly, 2022 financial information herein has been restated as if the Corporation had accounted for its domestic inventories on the FIFO method for the entire year. These unaudited condensed consolidated financial statements should be read in conjunction with the Corporation's latest Annual Report on Form 10-K.

Recently ~~Issued~~Adopted Accounting Pronouncements

In September ~~2022,~~2016, the Financial Accounting Standards Board ~~(the “FASB”~~(“FASB”) issued ASU ~~2022-04,~~ ~~Liabilities – Supplier Finance Programs~~, which requires certain disclosures related to supplier finance programs including the nature of the program, activity during the period, changes from period to period, and potential magnitude. The guidance becomes effective for the Corporation on January 1, 2023, including interim periods. The Corporation is currently evaluating the impact the guidance will have on its disclosures in its periodic filings.

~~In September 2016, the FASB issued ASU~~ 2016-13, Financial Instruments – Credit Losses, which adds a new impairment model, known as the current expected credit loss (“CECL”) model, ~~that is~~ based on expected losses rather than incurred losses. Under the new guidance, an entity recognizes an allowance for its estimate of expected credit losses and applies it to most debt instruments, trade receivables, lease receivables, financial guarantee contracts, and other loan commitments. The CECL model does not have a minimum threshold for recognition of impairment losses and entities will need to measure expected credit losses on assets ~~that have~~having a low risk of loss. The guidance ~~originally~~ became effective for the Corporation, onand the Corporation adopted the guidance, effective January 1, ~~2020; however, since~~2023 and recorded an adjustment to opening retained deficit of $747 for the ~~Corporation meets~~expected losses on trade receivables of $271 (Note 2) and insurance receivable - asbestos of $476 (Note 16).

Note 2 - Allowance for Credit Losses (Trade Receivables)

Trade receivables are reported on the ~~definition of a Smaller Reporting Company, as defined by~~condensed consolidated balance sheet at the ~~Securities and Exchange Commission (“SEC”), the effective date was subsequently revised to fiscal years beginning after December 15, 2022.~~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 ~~currently evaluating the impact the guidance will have~~estimated based on ~~its financial position~~historical collection experience, current regional economic and ~~operating results. It will~~market conditions, aging of accounts receivable, current creditworthiness of customers, and forward-looking information. The use of forward-looking information is based on certain macroeconomic and microeconomic indicators including, but not ~~however, affect the Corporation’s liquidity.~~limited to, regional business environment risk, political risk, and commercial and financing risks.

The Corporation reviews its allowance for credit losses on a quarterly basis to ensure its reserves for credit losses reflect regional and end-customer industry risk trends as well as current and future global operating conditions.8

The allowance for credit losses on trade receivables was $918 and $763 as of September 30, 2023 and December 31, 2022, respectively.

Note 23 – Inventories

At September 30, ~~2022,~~2023 and December 31, ~~2021, approximately 39% and 35%, respectively, of the~~2022, substantially all inventories were valued using the ~~LIFO method with the remaining inventories valued using the~~ FIFO method. Inventories were comprised of the following:

September 30,
2022

December 31,
2021

Raw materials

$
30,720

$
22,332

Work-in-process

37,946

37,447

Finished goods

16,591

18,093

Supplies

7,254

10,326

Inventories

$
92,511

$
88,198


	September 30, 2023		December 31, 2022
Raw materials	$	49,871	$	42,736
Work-in-process		55,610		48,809
Finished goods		18,026		23,231
Supplies		7,241		6,963
Inventories	$	130,748	$	121,739

Note 34 – Property, Plant and Equipment

Property, plant and equipment were comprised of the following:


	September 30, 2022			December 31, 2021			September 30, 2023			December 31, 2022
Land and land improvements	$	9,687		$	10,377		$	9,711		$	9,887
Buildings		60,635			63,166
Buildings and leasehold improvements								64,346			62,102
Machinery and equipment		342,973			345,118			351,480			339,134
Construction-in-process		16,100			11,019			23,350			16,005
Other		6,763			6,798			6,840			6,706
		436,158			436,478			455,727			433,834
Accumulated depreciation and amortization		(283,130	)		(277,915	)		(299,639	)		(278,836	)
Property, plant and equipment, net	$	153,028		$	158,563		$	156,088		$	154,998

The land and building of Union Electric Steel UK Limited, an indirect subsidiary of the Corporation (“UES-UK”), with a book value equal to ~~$2,362~~$2,589 (£~~2,122)~~2,122) at September 30, ~~2022,~~2023, are held as collateral by the trustees of the UES-UK defined benefit pension plan (Note 78). Machinery and equipment purchased with proceeds from the equipment finance facility, (~~Note 6~~),with a book value equal to ~~$4,014~~$13,210 at September 30, ~~2022,~~2023, are included in construction-in-process and pledged as collateral for the ~~facility.~~facility (Note 7). The remaining assets, other than real property, of the Corporation are pledged as collateral for the Corporation’s revolving credit facility (Note 67).

Certain land and land improvements and buildings ~~were~~and leasehold improvements are included in the sale and leaseback financing transactions and disbursement agreement (Note 67). Title to these assets ~~lie~~lies with the lender; however, since the transactions qualified as financing transactions, versus sales, the assets remain recorded on the Corporation’s condensed consolidated balance sheet.

The gross value of assets under finance leases and the related accumulated amortization approximated ~~$4,188~~$3,953 and ~~$1,287,~~$1,777, respectively, as of September 30, ~~2022,~~2023 and ~~$3,882~~$3,917 and ~~$1,263,~~$1,577, respectively, at December 31, ~~2021.~~2022. Depreciation expense approximated ~~$4,117~~$4,295 and ~~$4,210,~~$4,117, including depreciation of assets under finance leases of approximately ~~$77~~$115 and ~~$124,~~$77, for the three months ended September 30, ~~2022,~~2023 and ~~2021,~~2022, respectively. Depreciation expense approximated ~~$12,854~~$12,844 and ~~$13,071,~~$12,854, including depreciation of assets under finance leases of approximately ~~$337~~$252 and ~~$342,~~$337, for the nine months ended September 30, 2023 and 2022, ~~and 2021,~~ respectively.

Note 45 – Intangible Assets

Intangible assets were comprised of the following:


	September 30, 2023			December 31, 2022
Customer relationships	$	5,194		$	5,375
Developed technology		3,727			3,847
Trade name		2,075			2,167
		10,996			11,389
Accumulated amortization		(6,269	)		(6,195	)
Intangible assets, net	$	4,727		$	5,194

September 30,
2022

December 31,
2021

Customer relationships

$
5,138

$
5,850

Developed technology

3,662

4,201

Trade name

2,028

2,442

10,828

12,493

Accumulated amortization

(5,858
)

(6,289
)
Intangible assets, net

$
4,970

$
6,204

Changes in intangible assets consisted of the following:


	Three Months Ended September 30,						Nine Months Ended September 30,
	2023			2022			2023			2022
Balance at beginning of the period	$	4,859		$	5,431		$	5,194		$	6,204
Amortization of intangible assets		(87	)		(89	)		(266	)		(279	)
Other, primarily impact from changes in foreign currency exchange rates		(45	)		(372	)		(201	)		(955	)
Balance at end of the period	$	4,727		$	4,970		$	4,727		$	4,970

Three Months Ended September 30,

Nine Months Ended September 30,

2022

2021

2022

2021

Balance at beginning of the period
$
5,431

$
6,654

$
6,204

$
7,217

Amortization of intangible assets

(89
)

(69
)

(279
)

(444
)
Other, primarily impact from changes in foreign currency exchange rates

(372
)

(148
)

(955
)

(336
)
Balance at end of the period
$
4,970

$
6,437

$
4,970

$
6,437

Note 56 – Other Current Liabilities

Other current liabilities were comprised of the following:


	September 30, 2022		December 31, 2021		September 30, 2023		December 31, 2022
Customer-related liabilities	$	18,245	$	12,548	$	15,763	$	16,771
Accrued interest payable		829		1,772
Accrued utilities						1,706		2,484
Accrued sales commissions		1,683		1,864		1,422		1,681
Other		8,417		5,026		4,290		3,827
Other current liabilities	$	29,174	$	21,210	$	23,181	$	24,763

Customer-related liabilities primarily include liabilities for product warranty claims and deposits received on future orders. The Corporation provides a limited warranty on its products, known as assurance-type warranties, 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 known claims.

Changes in the liability for product warranty claims consisted of the following:


	Three Months Ended September 30,						Nine Months Ended September 30,						Three Months Ended September 30,						Nine Months Ended September 30,
	2022			2021			2022			2021			2023			2022			2023			2022
Balance at beginning of the period	$	6,759		$	7,840		$	7,331		$	8,105		$	5,639		$	6,759		$	5,193		$	7,331
Satisfaction of warranty claims		(1,100	)		(923	)		(2,226	)		(2,668	)		(304	)		(1,100	)		(1,280	)		(2,226	)
Provision for warranty claims, net		(22	)		632			1,078			2,141			62			(22	)		1,439			1,078
Other, primarily impact from changes in foreign currency exchange rates		(357	)		(135	)		(903	)		(164	)		(110	)		(357	)		(65	)		(903	)
Balance at end of the period	$	5,280		$	7,414		$	5,280		$	7,414		$	5,287		$	5,280		$	5,287		$	5,280

Customer deposits represent amounts collected from, or invoiced to, a customer in advance of revenue recognition. 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. Performance obligations related to customer deposits are expected to be satisfied in less than one ~~year.~~year.

Changes in customer deposits consisted of the following:

Three Months Ended September 30,

Nine Months Ended September 30,

2022

2021

2022

2021

Balance at beginning of the period
$
11,626

$
6,068

$
4,328

$
6,507

Satisfaction of performance obligations

(673
)

(3,601
)

(6,375
)

(10,360
)
Receipt of additional deposits

602

1,622

13,831

7,956

Other, primarily impact from changes in foreign currency exchange rates

(78
)

(23
)

(307
)

(37
)
Balance at end of the period
$
11,477

$
4,066

$
11,477

$
4,066


	Three Months Ended September 30,						Nine Months Ended September 30,
	2023			2022			2023			2022
Balance at beginning of the period	$	11,506		$	11,626		$	10,453		$	4,328
Satisfaction of performance obligations		(7,602	)		(673	)		(17,182	)		(6,375	)
Receipt of additional deposits		5,266			602			15,886			13,831
Other, primarily impact from changes in foreign currency exchange rates		(22	)		(78	)		(9	)		(307	)
Balance at end of the period	$	9,148		$	11,477		$	9,148		$	11,477

Note 67 – Debt

Borrowings were comprised of the following:


	September 30, 2022			December 31, 2021			September 30, 2023			December 31, 2022
Revolving credit facility	$	45,461		$	29,744		$	59,590		$	47,078
Sale and leaseback financing obligations		36,303			20,546			44,242			41,011
Industrial Revenue Bonds		9,191			9,191			9,191			9,191
Equipment financing facility		4,014			0			13,210			6,388
Minority shareholder loan (see Note 17)		1,525			0
Finance lease liabilities		1,796			1,438			1,557			1,803
Outstanding borrowings		98,290			60,919			127,790			105,471
Debt – current portion		(15,376	)		(20,007	)		(13,608	)		(12,410	)
Long-term debt	$	82,914		$	40,912		$	114,182		$	93,061

The current portion of debt includes primarily a swing ~~loan~~loans under the revolving credit facility and the Industrial Revenue Bonds (“IRBs”). 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 loans equaled ~~$1,461~~$3,590 and ~~$8,744~~$2,078 at September 30, ~~2022,~~2023 and December 31, ~~2021,~~2022, respectively. Although the IRBs begin to become due in 2027, the bonds can be put back to the Corporation on short notice if they are not able to be ~~remarketed, which is considered remote by the Corporation;~~remarketed; accordingly, the IRBs are classified as a current ~~liability.~~liability, although the Corporation considers the likelihood of the bonds being put back to the Corporation to be remote.

Revolving Credit Facility

The Corporation is a party to a revolving credit security agreement with a syndicate of banks that was amended on June 29, 2021 (the “First Amended and Restated Security Agreement”), and subsequently amended on December 17, 2021 and May 26, 2022. The First Amended and Restated Security Agreement ~~as subsequently amended,~~ provides for a senior secured asset-based revolving credit facility of ~~$100,000,~~$100,000, that can be increased to ~~$130,000~~$130,000 at the option of the Corporation and with the approval of the lenders, and an allowance of ~~$20,000~~$20,000 for new equipment financing (see "Equipment Financing Facility" below) but, otherwise, restricts the Corporation from incurring additional indebtedness outside of the agreement, unless approved by the banks. The revolving credit facility includes sub-limits for letters of credit not to exceed ~~$40,000~~$40,000 and European borrowings not to exceed ~~$30,000,~~$30,000, of which up to ~~$7,500~~$7,500 may be allocated for Swedish

borrowings. The maturity date for the revolving credit facility is June 29, 2026 and, subject to other terms and conditions of the agreement, would become due on that date.

Availability under the revolving credit facility is based on eligible accounts receivable, inventory and fixed assets. ~~Domestic borrowings from~~Effective July 1, 2023, the Corporation migrated London Inter-Bank Offered Rate (“LIBOR”)-based loans to Secured Overnight Financing Rate (“SOFR”)-based loans, in accordance with the provisions specified in the revolving credit facility, ~~bear interest, at~~coinciding with the Corporation’s option, at either (i) LIBOR plus an applicable margin ranging between 2.00% to 2.50% based on the quarterly average excess availability or (ii) the alternate base rate plus an applicable margin ranging between 1.00% to 1.50% based on the quarterly average excess availability.discontinuation of LIBOR. European borrowings denominated in euros, pound sterling or krona bear interest at the Successor Rate as defined in the First Amended and Restated Security ~~Agreement.~~Agreement, as amended. Domestic borrowings from the credit facility bear interest, at the Corporation’s option, at either (i) SOFR, as adjusted, plus an applicable margin ranging between 2.00% to 2.50% based on the quarterly average excess availability or (ii) the alternate base rate plus an applicable margin ranging between 1.00% to 1.50% based on the quarterly average excess availability. As of September 30, ~~2022,~~2023 and December 31, ~~2021,~~2022, there were no European borrowings outstanding. Additionally, the Corporation is required to pay a commitment fee of ~~0.25%~~0.25% based on the daily unused portion of the credit facility.

As of September 30, ~~2022,~~2023, the Corporation had outstanding borrowings under the revolving credit facility of ~~$45,461.~~$59,590. The average interest rate approximated 4%8.32% and 7.97% for the three and nine months ended September 30, 2023, respectively, and 3.99% for each of the three and nine months ended September 30, ~~2022, and 2021.~~2022. The Corporation also utilizes a portion of the credit facility for letters of credit (Note 89). As of September 30, ~~2022,~~2023, remaining availability under the revolving credit facility approximated ~~$35,622,~~$21,724, net of standard availability reserves. ~~At September 30, 2021, deferred~~Deferred financing fees of ~~$485~~$485 were incurred in 2021 related to the First Amended and Restated Security Agreement and are being amortized over the remaining term of the agreement.

Borrowings outstanding under the revolving credit facility are collateralized by a first priority perfected security interest in substantially all assets of the Corporation and its subsidiaries (other than real property). Additionally, the revolving credit facility contains customary affirmative and negative covenants and limitations including, but not limited to, investments in certain of its subsidiaries, payment of dividends, incurrence of additional indebtedness and guaranties, and acquisitions and ~~divestures.~~divestitures. In addition, the Corporation must maintain a certain level of excess availability or otherwise maintain a minimum fixed charge coverage ratio of not less than 1.05 to 1.00. The Corporation was in compliance with the applicable bank covenants as of September 30, ~~2022.~~2023.

Sale and Leaseback Financing Obligations

~~On August 30, 2022, Air & Liquid~~In September 2018, Union Electric Steel Corporation (“UES”), a wholly owned subsidiary of the Corporation, completed a sale and leaseback financing transaction with Store Capital Acquisitions, LLC (“STORE”), valued at approximately $15,500, for certain of its real property, including its manufacturing facilities in Lynchburg, Virginia and Amherst, Virginia (collectively, the “ALS Properties”). Previously, in September 2018, Union Electric Steel Corporation (“UES”), an indirect subsidiary of the Corporation, completed a sale and leaseback financing transaction with 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 completed a sale and leaseback financing transaction with STORE, valued at $1115,500, for certain of its real property, including its manufacturing facilities in Lynchburg, Virginia and Amherst, Virginia. Net proceeds, after transaction-related costs, approximated $15,396. In October 2022, Air & Liquid completed a sale and leaseback financing transaction with STORE, valued at $4,500 for its real property, including its manufacturing facility, located in North Tonawanda, New York (collectively with the Virginia properties, the “ALP Properties”). Net proceeds, after transaction-related costs, approximated $4,460.

In connection with the August 2022 sale and leaseback financing transaction, and as modified by the October 2022 sale and leaseback financing transaction, UES and STORE entered into ana 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 ~~ALS~~ALP Properties and the UES Properties (collectively, the ~~Properties)~~“Properties”), subject to the terms and conditions of the Restated Lease, and UES will sublease the ~~ALS~~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.~~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%~~115% of Lessor’s Total Investment, with such terms defined in the Restated Lease.

~~Annual~~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 over 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 September 30, 2023, the Base Annual Rent, including the Disbursement Agreement adjustment, is equal to ~~$2,939 (the “Base Annual Rent”)~~$3,572, payable in equal monthly installments. OnEach October ~~1, 2022, and each anniversary date~~ through ~~August~~ 2052, the Base Annual Rent will increase ~~each anniversary date~~ by an amount equal to the lesser of ~~2.2%~~2.04% or ~~1.25% of~~1.25 times the change in the consumer price index, as defined in the Restated Lease. 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.

~~In connection with~~ Effective October 1, 2023, the execution of the Restated Lease, UES and STORE entered into a Disbursement Agreement dated August 30, 2022 (the “Disbursement Agreement”), pursuant to which STORE agreed to provide up to $2,500 to UES towards certain improvements in the Carnegie, Pennsylvania manufacturing facility. As of September 30, 2022, no amounts were outstanding under the Disbursement Agreement. Thenew Base Annual Rent ~~under the Restated Lease will be adjusted to repay any amounts advanced under the Disbursement Agreement, at the time~~is $3,645, an increase of ~~the advance, with such advances to be repaid over the initial term of the Restated Lease of 20 years. Advances under the Disbursement Agreement will be secured by the capital improvements.~~2.04%.

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 effective interest rate approximated 8%8.89% and 8.36% for the three and nine months ended September 30, 2023, respectively, and approximated 7.90% for each of the three and nine months ended September 30, ~~2022, and 2021.~~2022. Deferred financing fees of ~~$104~~$104 were incurred during the nine months ended September 30, 2022, related to the sale and leaseback ~~of the ALS Properties~~transaction completed in August 2022, and are being amortized over the initial term of the Restated Lease of 20 years.

~~See~~ ~~Note 19~~ for completion of a sale and leaseback financing transaction between Air & Liquid and STORE for certain of its real property, including its manufacturing facility in North Tonawanda, New York, in October 2022.

Industrial Revenue Bonds (“IRBs”)

The Corporation has two IRBs outstanding: (i) ~~$7,116~~$7,116 taxable IRB maturing in 2027 and (ii) ~~$2,075~~$2,075 tax-exempt IRB maturing in 2029. Interest accrues on the IRBs at a floating rate which approximated ~~2.4%~~5.12% and ~~1.4%~~4.72% for the three and nine months ended September 30, 2023, respectively, and 2.43% and 1.40% for the three and nine months ended September 30, 2022, ~~and 1% for the three and nine months ended September 30, 2021.~~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 condensed consolidated balance sheets.

Equipment Financing Facility

OnIn September ~~29,~~ 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~~$20,000 to finance certain equipment purchases associated with ~~the FCEP~~a capital program at certain of the Corporation's FCEP locations (Note 9), including progress payments and reimbursement of deposits made to date. Each borrowing will constitute a secured loan transaction (each, a “Term Loan”). Each Term Loan will convert to a Term Note on the earlier of (i) the date in which the associated equipment is placed in service or (ii) December ~~31,~~29, 2023. Each Term Note will have a term of 84 months in arrears fully amortizing and will commence on the date of the Term Note.

~~Interest~~Effective July 1, 2023, UES and Clarus amended the Master Loan and Security Agreement increasing the interest rate on each Term Loan ~~will accrue at~~from an annual fixed rate of ~~8%, payable monthly. Interest on each~~8% to an annual fixed rate of 10.25%. Once converted from a Term Loan to a Term Note, interest will accrue on the Term Note at a fixed rate to be calculated by Clarus as the like-term swap rate, as reported in ICE Benchmark, or such other information service available to Clarus, for the week ending immediately prior to the commencement date for such Term Note, plus ~~4.5%~~4.5%.

The Term Loans and Term Notes will be secured by a first priority security interest in and to all of UES’s rights, title and interests in the underlying equipment.

At September 30, ~~2022, $4,014~~2023, $13,210 was outstanding as Term Loans.

Note 78 – Pension and Other Postretirement Benefits

Contributions to the Corporation’s employee benefit plans were as follows:


	Nine Months Ended September 30,
	2023		2022
U.S. defined benefit pension plans	$	207	$	236
Foreign defined benefit pension plans		377		388
Other postretirement benefits (e.g., net payments)		325		359
U.K. defined contribution pension plan		175		193
U.S. defined contribution plan		2,002		2,778

Nine Months Ended September 30,

2022

2021

U.S. defined benefit pension plans

$
236

$
0

Foreign defined benefit pension plans

388

483

Other postretirement benefits (e.g., net payments)

359

469

U.K. defined contribution pension plan

193

248

U.S. defined contribution plan

2,778

2,320

Net periodic pension and other postretirement benefit costs included the following components:


	Three Months Ended September 30,						Nine Months Ended September 30,
U.S. Defined Benefit Pension Plans	2023			2022			2023			2022
Service cost	$	10		$	13		$	29		$	38
Interest cost		2,483			1,546			7,450			4,639
Expected return on plan assets		(3,596	)		(3,302	)		(10,788	)		(9,905	)
Amortization of prior service cost		2			2			5			5
Amortization of actuarial loss		30			558			91			1,674
Net benefit income	$	(1,071	)	$	(1,183	)	$	(3,213	)	$	(3,549	)


	Three Months Ended September 30,						Nine Months Ended September 30,
Foreign Defined Benefit Pension Plans	2023			2022			2023			2022
Service cost	$	87		$	85		$	225		$	223
Interest cost		468			256			1,391			821
Expected return on plan assets		(487	)		(463	)		(1,446	)		(1,484	)
Amortization of prior service credit		(70	)		(65	)		(207	)		(210	)
Amortization of actuarial loss		152			75			451			242
Net benefit expense (income)	$	150		$	(112	)	$	414		$	(408	)


	Three Months Ended September 30,						Nine Months Ended September 30,
Other Postretirement Benefit Plans	2023			2022			2023			2022
Service cost	$	43		$	59		$	128		$	176
Interest cost		98			55			293			165
Amortization of prior service credit		(256	)		(299	)		(768	)		(897	)
Amortization of actuarial (gain) loss		(81	)		6			(242	)		19
Net benefit income	$	(196	)	$	(179	)	$	(589	)	$	(537	)

Three Months Ended September 30,

Nine Months Ended September 30,

U.S. Defined Benefit Pension Plans

2022

2021

2022

2021

Service cost

$
13

$
60

$
38

$
182

Interest cost

1,546

1,337

4,639

4,012

Expected return on plan assets

(3,302
)

(3,248
)

(9,905
)

(9,746
)
Amortization of prior service cost

2

6

5

17

Amortization of actuarial loss

558

658

1,674

1,974

Net benefit income

$
(1,183
)

$
(1,187
)

$
(3,549
)

$
(3,561
)

Three Months Ended September 30,

Nine Months Ended September 30,

Foreign Defined Benefit Pension Plans

2022

2021

2022

2021

Service cost

$
85

$
111

$
223

$
285

Interest cost

256

207

821

626

Expected return on plan assets

(463
)

(485
)

(1,484
)

(1,461
)
Amortization of prior service credit

(65
)

(77
)

(210
)

(231
)
Amortization of actuarial loss

75

162

242

489

Net benefit income

$
(112
)

$
(82
)

$
(408
)

$
(292
)

Three Months Ended September 30,

Nine Months Ended September 30,

Other Postretirement Benefit Plans

2022

2021

2022

2021

Service cost

$
59

$
61

$
176

$
183

Interest cost

55

45

165

136

Amortization of prior service credit

(299
)

(258
)

(897
)

(773
)
Amortization of actuarial loss (gain)

6

(19
)

19

(58
)
Net benefit income

$
(179
)

$
(171
)

$
(537
)

$
(512
)

Note 89 – Commitments and Contingent Liabilities

Outstanding standby and commercial letters of credit and bank guarantees as of September 30, ~~2022,~~2023 equaled ~~$18,664,~~$19,398, of which approximately one-half serves as collateral for the IRB debt. Outstanding surety bonds as of September 30, ~~2022,~~2023 approximated ~~$3,000~~$3,111 (SEK ~~33,900)~~33,900), which guarantee certain obligations under a credit insurance arrangement for certain of the Corporation’s foreign pension commitments.

The Corporation has undertaken a ~~$27,000~~$26,000 capital program to upgrade existing equipment at certain of its FCEP locations. The capital program is anticipated to be ~~completed~~substantially complete by December 31, 2023. At September 30, ~~2022,~~2023, commitments for future capital expenditures, including those associated with the FCEP capital program, approximated ~~$19,300.~~$7,300.

See Note 1112 for derivative instruments, Note 1516 for litigation and Note 1617 for environmental matters.

Note 910 – 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 condensed consolidated statements of shareholders’ equity. Each Series A warrant provides the holder with the right to purchase 0.4464 shares of common stock at an exercise price of ~~$2.5668,~~$2.5668, or ~~$5.75~~$5.75 per whole share of common stock, and expires on August 1, ~~2025.~~2025. For the three and nine months ended September 30, ~~2021,~~2023, the Corporation received noproceeds ~~of $3,308~~ from shareholders ~~who exercised 1,288,910~~from the exercise of Series A ~~warrants, equating to the issuance of 575,361 common shares.~~warrants.

In May 2022, the Corporation filed a Tender Offer and Prospectus Supplement (the “Offer”) withtheSEC pursuant to which the exercise price of each tendered Series A warrant was temporarily reduced. DuringtheOffer period, the holdersof Series A warrants were given the opportunity to exercise their Series A warrants at a temporarily reduced cash exercise price of ~~$1.7856~~$1.7856 per Series A warrant (or ~~$4.00~~$4.00 per whole share of common stock).The Offer expired on July 15, ~~2022.~~2022. The Corporation raised ~~$193~~$193 in gross proceeds resulting from 108,375 Series A warrants tendered. Series A warrants that were not exercised during the Offer period reverted to their original terms including the right to purchase 0.4464 shares of common stock at an exercise price of ~~$2.5668,~~$2.5668, or ~~$5.75~~$5.75 per whole share of common stock. Stock issuance costs approximated ~~$193~~$193 through September 30, 2022, and were recorded against the proceeds in additional paid in capital.

Note 1011 – Accumulated Other Comprehensive Loss

Net change and ending balances for the various components of accumulated other comprehensive loss as of and for the nine months ended September 30, ~~2022,~~2023 and ~~2021,~~2022 are summarized below. All amounts are net of tax where applicable.


	Foreign Currency Translation			Unrecognized Employee Benefit Costs			Cash Flow Hedges			Total Accumulated Other Comprehensive Loss			Less: Noncontrolling Interest			Accumulated Other Comprehensive Loss Attributable to Ampco-Pittsburgh
Balance at January 1, 2023	$	(26,170	)	$	(32,623	)	$	152		$	(58,641	)	$	(229	)	$	(58,412	)
Net change		(2,113	)		(683	)		(133	)		(2,929	)		(537	)		(2,392	)
Balance at September 30, 2023	$	(28,283	)	$	(33,306	)	$	19		$	(61,570	)	$	(766	)	$	(60,804	)

Balance at January 1, 2022	$	(14,322	)	$	(40,563	)	$	277		$	(54,608	)	$	498		$	(55,106	)
Net change		(19,787	)		2,274			(701	)		(18,214	)		(996	)		(17,218	)
Balance at September 30, 2022	$	(34,109	)	$	(38,289	)	$	(424	)	$	(72,822	)	$	(498	)	$	(72,324	)

Foreign
Currency
Translation

Unrecognized
Employee
Benefit Costs

Cash Flow
Hedges

Total
Accumulated Other
Comprehensive Loss

Less:
Noncontrolling
Interest

Accumulated Other
Comprehensive Loss
Attributable to Ampco-Pittsburgh

Balance at January 1, 2022

$
(14,322
)

$
(40,563
)

$
277

$
(54,608
)

$
498

$
(55,106
)
Net change

(19,787
)

2,274

(701
)

(18,214
)

(996
)

(17,218
)
Balance at September 30, 2022

$
(34,109
)

$
(38,289
)

$
(424
)

$
(72,822
)

$
(498
)

$
(72,324
)

Balance at January 1, 2021

$
(11,371
)

$
(57,652
)

$
589

$
(68,434
)

$
261

$
(68,695
)
Net change

(2,041
)

1,618

(477
)

(900
)

103

(1,003
)
Balance at September 30, 2021

$
(13,412
)

$
(56,034
)

$
112

$
(69,334
)

$
364

$
(69,698
)

The following summarizes the line items affected on the condensed consolidated statements of operations for components reclassified from accumulated other comprehensive loss. Amounts in ~~parenthesis~~parentheses represent credits to net income.


	Three Months Ended September 30,						Nine Months Ended September 30,
	2023			2022			2023			2022
Amortization of unrecognized employee benefit costs:
Other (loss) income – net	$	(223	)	$	277		$	(670	)	$	833
Income tax (provision) benefit		(12	)		4			(58	)		-
Net of tax	$	(235	)	$	281		$	(728	)	$	833
Settlements of cash flow hedges:
Depreciation and amortization (foreign currency purchase contracts)	$	(6	)	$	(7	)	$	(20	)	$	(20	)
Costs of products sold (excluding depreciation and amortization) (futures contracts – copper and aluminum)		146			386			(33	)		132
Total before income tax		140			379			(53	)		112
Income tax (provision) benefit		(5	)		(12	)		1			(4	)
Net of tax	$	135		$	367		$	(52	)	$	108

Three Months Ended September 30,

Nine Months Ended September 30,

2022

2021

2022

2021

Amortization of unrecognized employee benefit costs:

Other income – net
$
277

$
472

$
833

$
1,418

Income tax provision

4

(15
)

0

(47
)
Net of tax
$
281

$
457

$
833

$
1,371

Settlements of cash flow hedges:

Depreciation and amortization (foreign currency purchase contracts)
$
(7
)

$
(6
)

$
(20
)

$
(20
)
Costs of products sold (excluding depreciation and
amortization) (futures contracts – copper and aluminum)

386

(298
)

132

(1,004
)
Total before income tax

379

(304
)

112

(1,024
)
Income tax benefit

(12
)

0

(4
)

0

Net of tax
$
367

$
(304
)

$
108

$
(1,024
)

The income tax effect associated with the various components of other comprehensive loss for the three and nine months ended September 30, ~~2022,~~2023 and ~~2021,~~2022 is summarized below. Amounts in parentheses represent credits to net income when reclassified to earnings. Certain amounts 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. Foreign currency translation adjustments exclude the effect of income taxes since earnings of non-U.S. subsidiaries are deemed to be reinvested for an indefinite period of time.


	Three Months Ended September 30,						Nine Months Ended September 30,
	2023			2022			2023			2022
Income tax effect associated with changes in:
Unrecognized employee benefit costs	$	-		$	-		$	-		$	-
Fair value of cash flow hedges		-			(7	)		3			(25	)
Income tax effect associated with reclassification adjustments:
Amortization of unrecognized employee benefit costs		(12	)		4			(58	)		-
Settlement of cash flow hedges		(5	)		(12	)		1			(4	)

Three Months Ended September 30,

Nine Months Ended September 30,

2022

2021

2022

2021

Income tax effect associated with changes in:

Unrecognized employee benefit costs

$
0

$
0

$
0

$
0

Fair value of cash flow hedges

$
(7
)

$
0

$
(25
)

$
0

Income tax effect associated with reclassification adjustments:

Amortization of unrecognized employee benefit costs

$
4

$
(15
)

$
0

$
(47
)
Settlement of cash flow hedges

$
(12
)

$
0

$
(4
)

$
0

Note 1112 – Derivative Instruments

Certain divisions of the ALP segment are subject to risk from increases in the price of commodities (copper and aluminum) used in the production of inventory. To minimize this risk, futures contracts are entered into which are designated as cash flow hedges. At September 30, ~~2022,~~2023, approximately ~~33%~~46%, or ~~$2,196,~~$2,771, of anticipated copper purchases over the next 10ten months and ~~40%~~56%, or ~~$812,~~$565, of

anticipated aluminum purchases over the next six months are hedged. At September 30, 2022, approximately 33%, or $2,196, of anticipated copper purchases over the next 10 months and 40%, or $812, of anticipated aluminum purchases over the next 10 months ~~are hedged. At September 30, 2021, approximately 43%, or $2,593, of anticipated copper purchases over the next eight months and 56%, or $637, of anticipated aluminum purchases over the next six 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 condensed consolidated balance sheets. At September 30, ~~2022,~~2023, the Corporation has purchase commitments covering approximately ~~25%~~32%, or ~~$941,~~$2,942, of anticipated natural gas usage through December 31, ~~2023,~~ 2025for one of its subsidiaries and approximately ~~28%~~21%, or ~~$1,674,~~$1,116, of anticipated electricity usage through December 31, 2025for ~~two~~one of its subsidiaries.Purchases of natural gas and electricity under previously existing commitments equaled ~~$438~~$812 and ~~$2,676~~$2,249 for the three and nine months ended September 30, 2023, respectively. Purchases of natural gas and electricity under previously existing commitments equaled $438 and $2,676 for the three and nine months ended September 30, 2022, respectively. ~~There were no purchases of natural gas or electricity under previously existing commitments for the three and nine months ended September 30, 2021.~~

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. As of December 31, 2010, all contracts were settled, the underlying fixed assets were placed in service and the change in fair value of the foreign currency purchase ~~contract~~contracts deferred in accumulated other comprehensive loss began being amortized to earnings (depreciation and amortization) over the life of the underlying assets.

No portion of the existing cash flow ~~or fair value~~ 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.

~~Gains (losses)~~Gain (loss) on foreign exchange transactions included in other income – net equaled ~~$1,809~~$892 and ~~$3,368~~$(267) for the three and nine months ended September 30, 2023, respectively, and $1,809 and $3,368 for the three and nine months ended September 30, 2022, ~~respectively, and $369 and $(705) for the three and nine months ended September 30, 2021,~~ respectively.

The change in the fair value of the cash flow contracts is recorded as a component of accumulated other comprehensive loss. The balances as of September 30, ~~2022,~~2023 and ~~2021,~~2022 and the amounts recognized as and reclassified from accumulated other comprehensive loss for each of the periods are summarized below. Amounts are after tax where applicable. Certain amounts recognized as comprehensive income (loss) or reclassified from accumulated other comprehensive loss 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.


Three Months Ended September 30, 2023	Beginning of the Period			Recognized			Reclassified			End of the Period
Foreign currency purchase contracts	$	94		$	-		$	6		$	88
Futures contracts – copper and aluminum		(229	)		19			(141	)		(69	)
	$	(135	)	$	19		$	(135	)	$	19
Three Months Ended September 30, 2022
Foreign currency purchase contracts	$	122		$	-		$	7		$	115
Futures contracts – copper and aluminum		(662	)		(251	)		(374	)		(539	)
	$	(540	)	$	(251	)	$	(367	)	$	(424	)
Nine Months Ended September 30, 2023
Foreign currency purchase contracts	$	108		$	-		$	20		$	88
Futures contracts – copper and aluminum		44			(81	)		32			(69	)
	$	152		$	(81	)	$	52		$	19
Nine Months Ended September 30, 2022
Foreign currency purchase contracts	$	135		$	-		$	20		$	115
Futures contracts – copper and aluminum		142			(809	)		(128	)		(539	)
	$	277		$	(809	)	$	(108	)	$	(424	)

Three Months Ended September 30, 2022

Beginning of
the Period

Recognized

Reclassified

End of
the Period

Foreign currency purchase contracts

$
122

$
0

$
7

$
115

Futures contracts – copper and aluminum

(662
)

(251
)

(374
)

(539
)

$
(540
)

$
(251
)

$
(367
)

$
(424
)
Three Months Ended September 30, 2021

Foreign currency purchase contracts

$
148

$
0

$
6

$
142

Futures contracts – copper and aluminum

276

(8
)

298

(30
)

$
424

$
(8
)

$
304

$
112

Nine Months Ended September 30, 2022

Foreign currency purchase contracts

$
135

$
0

$
20

$
115

Futures contracts – copper and aluminum

142

(809
)

(128
)

(539
)

$
277

$
(809
)

$
(108
)

$
(424
)
Nine Months Ended September 30, 2021

Foreign currency purchase contracts

$
162

$
0

$
20

$
142

Futures contracts – copper and aluminum

427

547

1,004

(30
)

$
589

$
547

$
1,024

$
112

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 Statements	Estimated to be Reclassified in the Next 12 Months			Three Months Ended September 30,						Nine Months Ended September 30,
	of Operations				2023			2022			2023		2022
Foreign currency purchase contracts	Depreciation and amortization	$	28		$	6		$	7		$	20	$	20
Futures contracts – copper and aluminum	Costs of products sold (excluding depreciation and amortization)	$	(72	)	$	(146	)	$	(386	)	$	33	$	(132	)

Location of Gain (Loss)
in Statements

Estimated to
be Reclassified
in the Next Twelve Months

Three Months Ended September 30,

Nine Months Ended September 30,

of Operations

12 Months

2022

2021

2022

2021

Foreign currency purchase contracts

Depreciation and amortization

$
28

$
7

$
6

$
20

$
20

Futures contracts – copper and aluminum

Costs of products sold
(excluding depreciation and amortization)

$
(557
)

$
(386
)

$
298

$
(132
)

$
1,004

Note 1213 – Fair Value

The Corporation’s financial assets and liabilities ~~that are~~ reported at fair value in the condensed consolidated balance sheets as of September 30, ~~2022,~~2023 and December 31, ~~2021,~~2022 were as follows:

	Quoted Prices in Active Markets for Identical Inputs (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total
As of September 30, 2022
									Quoted Prices in Active Markets for Identical Inputs (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total
As of September 30, 2023
Investments
Other noncurrent assets	$	3,276	$	0	$	0	$	3,276	$	3,098	$	-	$	-	$	3,098
As of December 31, 2021
As of December 31, 2022
Investments
Other noncurrent assets	$	4,860	$	0	$	0	$	4,860	$	3,353	$	-	$	-	$	3,353

The investments held as other noncurrent assets represent assets held in the “Rabbi” trust for the purpose of providing benefits under ~~the~~a 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 debt and borrowings approximate their carrying values. Additionally, the fair values of trade receivables and ~~trade payables~~accounts payable approximate their carrying values.

Note 1314 – Net Sales and Income ~~(Loss)~~ Before Income Taxes

Net sales and income ~~(loss)~~ before income taxes by geographic area for the three and nine months ended September 30, ~~2022,~~2023 and ~~2021,~~2022 are outlined below. When disaggregating revenue, consideration is given to information regularly reviewed by the chief operating ~~decision maker~~decision-maker to evaluate the financial performance of the operating segments and make resource allocation decisions. Substantially all foreign net sales for each of the periods isare attributable to the FCEP segment.



	Three Months Ended September 30,				Nine Months Ended September 30,
Net Sales	2023		2022		2023		2022
United States	$	63,118	$	56,535	$	182,247	$	164,167
Foreign		39,100		43,112		131,985		132,488
	$	102,218	$	99,647	$	314,232	$	296,655



	Three Months Ended September 30,					Nine Months Ended September 30,
Income Before Income Taxes	2023		2022			2023			2022
United States (1)	$	350	$	(857	)	$	(3,119	)	$	1,422
Foreign		961		3,255			6,876			4,260
	$	1,311	$	2,398		$	3,757		$	5,682

Three Months Ended September 30,

Nine Months Ended September 30,

Net Sales
2022

2021

2022

2021

United States

$
56,535

$
44,859

$
164,167

$
133,233

Foreign

43,112

36,326

132,488

127,180

$
99,647

$
81,185

$
296,655

$
260,413

(1)

Includes Corporate costs of $3,182 and $2,929 for the three months ended September 30, 2023 and 2022, respectively, and $9,959 and $8,435 for the nine months ended September 30, 2023 and 2022, respectively, which represent operating costs of the corporate office not allocated to the segments.

Three Months Ended September 30,

Nine Months Ended September 30,

Income (Loss) Before Income Taxes

2022

2021

2022

2021

United States ⁽¹⁾

$
(1,134
)

$
(2,201
)

$
437

$
(3,472
)
Foreign

3,255

1,026

4,260

5,588

$
2,121

$
(1,175
)

$
4,697

$
2,116

~~(1)~~

Includes Corporate costs of $2,929 and $2,420 for the three months ended September 30, 2022, and 2021, respectively, and $8,435 and $8,938 for the nine months ended September 30, 2022, and 2021, respectively, which represent operating costs of the corporate office not allocated to the segments.

Net sales by product line for the three and nine months ended September 30, ~~2022,~~2023 and ~~2021,~~2022 were as follows:


	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
Forged and cast mill rolls	$	68,325	$	66,653	$	213,027	$	193,946
FEP		5,300		8,858		14,977		35,902
Heat exchange coils		10,068		8,532		31,808		22,483
Air handling systems		9,357		8,457		27,453		22,133
Centrifugal pumps		9,168		7,147		26,967		22,191
	$	102,218	$	99,647	$	314,232	$	296,655

Three Months Ended September 30,

Nine Months Ended September 30,

2022

2021

2022

2021

Forged and cast mill rolls
$
66,653

$
53,778

$
193,946

$
177,918

FEP

8,858

7,401

35,902

17,640

Heat exchange coils

8,532

6,527

22,483

18,482

Air handling systems

8,457

6,383

22,133

21,235

Centrifugal pumps

7,147

7,096

22,191

25,138

$
99,647

$
81,185

$
296,655

$
260,413

Note 1415 – Stock-Based Compensation

The Ampco-Pittsburgh Corporation 2016 Omnibus Incentive Plan, as amended (the “Incentive Plan”), authorizes the issuance of up to ~~2,700,000~~3,700,000 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. 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 Incentive Plan also provides for equity-based 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.~~$200. The limit does not apply to shares received by a non-employee director at his or her election in lieu of the director’s retainer for board service.

Stock-based compensation expense, including expense associated with equity-based awards granted to non-employee members of the Board of Directors, for the three and nine months ended September 30, ~~2022,~~2023 equaled ~~$684~~$520 and ~~$1,512,~~$1,630, respectively, and for the three and nine months ended September 30, ~~2021,~~2022, equaled ~~$515~~$684 and ~~$1,543,~~$1,512, respectively. The income tax benefit recognized in the condensed consolidated statements of operations was not significant due to the Corporation having a valuation allowance recorded against its deferred income tax assets for the majority of the jurisdictions where the expense was recognized.

Note 1516 – 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.~~litigation.

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 claims filed in various state and federal courts.

Asbestos Claims

The following table reflects approximate information about the number of claims for Asbestos Liability against Air & Liquid and the Corporation for the nine months ended September 30, ~~2022,~~2023 and ~~2021~~2022 (number of claims not in thousands). The majority of the settlement and defense costs were reported and paid by insurers. 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.


	Nine Months Ended September 30,
	2023			2022
Total claims pending at the beginning of the period		6,259			6,097
New claims served		984			978
Claims dismissed		(647	)		(220	)
Claims settled		(305	)		(288	)
Total claims pending at the end of period (1)		6,291			6,567
Administrative closures (2)		(2,903	)		(2,908	)
Total active claims at the end of the period		3,388			3,659
Gross settlement and defense costs paid in period (in 000’s)	$	16,221		$	14,683
Avg. gross settlement and defense costs per claim resolved (in 000’s) (3)	$	17.04		$	28.90

Nine Months Ended September 30,

2022

2021

Total claims pending at the beginning of the period

6,097

5,891

New claims served

978

943

Claims dismissed

(220
)

(525
)
Claims settled

(288
)

(301
)
Total claims pending at the end of period ⁽¹⁾

6,567

6,008

Administrative closures ⁽²⁾

(2,908
)

(2,914
)
Total active claims at the end of the period

3,659

3,094

Gross settlement and defense costs paid in period (in 000’s)

$
14,683

$
14,329

Avg. gross settlement and defense costs per claim resolved (in 000’s) ⁽³⁾

$
28.90

$
17.35

(1)

Included as “total claims pending” are approximately 1,642 and 658 claims at September 30, 2023 and 2022, respectively, classified in various jurisdictions as “inactive” or transferred to a state or federal judicial panel on multi-district litigation.

~~(1)~~

Included as “total claims pending” are approximately 658 and 661 claims at September 30, 2022, and 2021, respectively, classified in various jurisdictions as “inactive” or transferred to a state or federal judicial panel on multi-district litigation.

(2)

Administrative closures include (i) those claims filed six or more years ago, (ii) claims previously classified in various jurisdictions as “inactive,” and (iii) claims transferred to a state or federal judicial panel on multi-district litigation. Collectively, these claims are unlikely to result in any liability to the Corporation.

~~(2)~~

Administrative closures include (i) those claims that were filed six or more years ago, (ii) claims that were previously classified in various jurisdictions as “inactive,” and (iii) claims that were transferred to a state or federal judicial panel on multi-district litigation. Collectively, these claims are unlikely to result in any liability to the Corporation.

(3)

Claims resolved do not include claims administratively closed.

~~(3)~~

~~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 insurers ~~that have~~having 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~~providing coverage for claims for the Asbestos Liability.

The Settlement Agreements ~~include acknowledgements that~~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

At December 31, 2006, with the assistance of a nationally recognized expert in the valuation of asbestos liabilities, the Corporation recorded its initial reserve for the Asbestos Liability. Since then, the Corporation and the nationally recognized expert in the valuation of asbestos liabilities have reviewed the Asbestos Liability and the underlying assumptions on a regular basis to determine whether any adjustment to the Asbestos Liability or the underlying assumptions were necessary. When warranted, the Asbestos Liability was adjusted to consider the current trends and new information ~~that became~~becoming available and, if reasonably estimable, to extend the valuation of asbestos liabilities further into the future. In 2018, the valuation was extended to include claims projected to be asserted through ~~2052,~~ the estimated final date by which the Corporation expects to have settled all asbestos-related claims.

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 costs 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 ~~that~~ 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 ~~exhaustions,~~exhaustion, the nature of the underlying claims for the Asbestos Liability, estimated erosion of insurance limits on account of claims against Howden ~~associated with~~arising out of the Products, prior impairment of policies, insolvencies among certain of the insurance carriers, and creditworthiness of the remaining

insurers 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 ~~timeframe~~time frame of the Asbestos Liability.

In the fourth quarter of 2021, primarily as a result of identified changes in claim data and availability of new information, the Corporation engaged GNARUS Advisors LLC (“GNARUS”) to update the estimated Asbestos Liability. The methodology used by GNARUS in its updated 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 the subsidiaries and the Corporation based on such epidemiological data and relevant claims history from January 1, 2018, to July 31, 2021;

•

~~an analysis of pending cases, by type of injury claimed and jurisdiction where the claim is filed; and~~

•

~~an analysis of claims resolution history from January 1, 2018, to July 31, 2021, to determine the average settlement value of claims, by type of injury claimed and jurisdiction of filing.~~

Based on this analysis, the Corporation recorded an increase to its estimated Asbestos Liability of $23,333 for claims pending or projected to be asserted through 2052 bringing the Corporation’s reserve for Asbestos Liability to $180,314 at December 31, 2021. The increase was primarily attributable to recent claim experience, including a higher expected proportion of mesothelioma claims which typically have a higher settlement value, offset by a lower defense-to-indemnity cost ratio (reduced to 70% from 80% based on experience over the past five years) and elimination of an inflationary factor based on historical experience over the past 10+ years which provided no evidence that inflationary pressures influenced settlement averages. In addition, the Corporation increased its estimated insurance receivable at December 31, 2021, by $16,672 for the estimated insurance recoveries attributable to the claims for which the Asbestos Liability reserve had been established and the portion of defense costs covered by the Settlement Agreements bringing the insurance receivable to $121,297 at December 31, 2021.

The following table summarizes activity relating to Asbestos Liability for the nine months ended September 30, ~~2022,~~2023 and ~~2021.~~2022.


	Nine Months Ended September 30,
	2023			2022
Asbestos liability, beginning of the year	$	153,575		$	180,314
Settlement and defense costs paid		(16,221	)		(14,683	)
Asbestos liability, end of the period	$	137,354		$	165,631

Nine Months Ended September 30,

2022

2021

Asbestos liability, beginning of the year

$
180,314

$
180,196

Settlement and defense costs paid

(14,683
)

(14,329
)
Asbestos liability, end of the period

$
165,631

$
165,867

The following table summarizes activity relating to insurance recoveries for the nine months ended September 30, ~~2022,~~2023 and ~~2021.~~2022.

	Nine Months Ended September 30,
	2022			2021			Nine Months Ended September 30,
Insurance receivable – asbestos, beginning of the year	$	121,297		$	117,937
							2023			2022
Insurance receivable – asbestos, beginning of the year, as reported							$	105,910		$	121,297
Impact of adoption of new accounting standard								(476	)		-
Insurance receivable – asbestos, beginning of the year, as adjusted								105,434			121,297
Settlement and defense costs paid by insurance carriers		(7,748	)		(8,224	)		(9,041	)		(7,748	)
Insurance receivable – asbestos, end of the period	$	113,549		$	109,713		$	96,393		$	113,549

In conjunction with the adoption of the CECL accounting standard as of January 1, 2023, the Corporation established an allowance for expected credit losses of $476 reducing the insurance receivable to its estimated net realizable value. The allowance for expected credit losses is estimated based on historical insolvency experience, expected time frame until collection of insurance claim and assessments of current creditworthiness of insurers. The balance of 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, ~~that~~ there will not be insolvencies among the relevant insurance carriers, or ~~that~~ the assumed percentage recoveries for certain carriers will prove correct. During the third quarter of 2023, the Corporation received $191 of proceeds from an insolvent asbestos-related insurance carrier, which is recorded as Credit for Asbestos Litigation in the accompanying condensed consolidated statements of operations.

Asbestos Assumptions

The amounts recorded for the Asbestos Liability and insurance receivable rely on assumptions ~~that are~~ 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 ~~are identified above~~include forecast of the population likely to have been exposed to asbestos; the number of people likely to develop an asbestos-related disease; 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 ~~also include~~jurisdiction where the claim is filed; average settlement value of claims, by type of injury claimed and jurisdiction of filing; number and nature of new claims to be filed each ~~year, the~~year; average cost of disposing of each new ~~claim,~~claim; average annual defense ~~costs,~~costs; compliance by relevant parties with the terms of the Settlement ~~Agreements,~~Agreements; 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, ~~and~~ related insurance receivable, ~~as well as~~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, 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 ~~insurance receivable~~allowance for expected credit losses could be material to the operating results for the ~~periods~~period in which the adjustments to the liability, receivable or ~~receivable~~allowance are recorded and to the Corporation’s consolidated financial position and liquidity.

Note 1617 – 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 environmental 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~~$100 at September 30, ~~2022,~~2023 and December 31, ~~2021.~~2022.

Note 1718 – Related Parties

Shanxi Åkers TISCO Roll Co., Ltd. (“ATR”) periodically has loans outstanding with its minority shareholder. At September 30, 2022, ATR’s outstanding loan balance with its minority shareholder approximated $1,525 (RMB 10,852). At December 31, 2021, no loans were outstanding. For the nine months ended September 30, 2022, borrowings approximated $5,776 (RMB 38,470) and repayments approximate $4,251 (RMB 27,618). For the nine months ended September 30, 2021, no additional amounts were borrowed and repayments on previously existing loans approximated $1,065 (RMB 6,901).

Interest on borrowings accrues at the ~~three-to-~~three-to-five-year loan interest rate set by the People’s Bank of China, which approximated 5%4.35% and 5.00% for each of the three and nine months ended September 30, 2023 and 2022, ~~and 2021.~~respectively. For the nine months ended September 30, 2023, ATR paid $5 (RMB 35) of interest. For the nine months ended September 30, 2022, ATR paid ~~$943~~$943 (RMB ~~6,241)~~6,241) of interest. ~~For~~No interest was outstanding as of September 30, 2023 or December 31, 2022.

Loan activity for the nine months ended September 30, ~~2021, no interest~~2023 and 2022 was ~~paid. Accrued interest approximated $696 (RMB 4,950)~~as follows:


	Nine Months Ended September 30,
	2023			2023			2022			2022
	USD			RMB			USD			RMB
Balance at beginning of the period	$	-			-		$	-			-
Borrowings		1,099			7,604			5,776			38,470
Repayments		(1,096	)		(7,604	)		(4,251	)		(27,618	)
Foreign exchange		(3	)		-			-			-
Balance at end of the period	$	-			-		$	1,525			10,852

Sales to and ~~$1,713 (RMB 10,901) as of September 30, 2022, and December 31, 2021, respectively, and is recorded in other current liabilities on the condensed consolidated balance sheets.~~

~~Purchases~~purchases from ATR’s minority shareholder and its affiliates, which were in the ordinary course of business, ~~approximated $1,020 (RMB 7,539) and $6,838 (RMB 45,251)~~ for the three and nine months ended September 30, 2023 and 2022 ~~respectively, and $2,537 (RMB 16,394) and $8,794 (RMB 56,889) for the three and nine months ended September 30, 2021, respectively. The amount payable to~~were as follows:


	Three Months Ended September 30,
	2023		2023		2022		2022
	USD		RMB		USD		RMB
Purchases from related parties	$	1,913		13,752	$	1,020		7,539
Sales to related parties	$	18		346	$	2,419		16,620

~~ATR’s~~


	Nine Months Ended September 30,
	2023		2023		2022		2022
	USD		RMB		USD		RMB
Purchases from related parties	$	5,236		36,885	$	6,838		45,251
Sales to related parties	$	2,741		19,306	$	6,959		46,049

Balances outstanding with ATR's minority shareholder and its affiliates ~~for purchases approximated $891~~ ~~(RMB~~ ~~6,337) and $1,125 (RMB 7,157) at~~as of September 30, ~~2022,~~2023 and December 31, ~~2021, respectively.~~2022 were as follows:


	September 30, 2023		September 30, 2023		December 31, 2022		December 31, 2022
	USD		RMB		USD		RMB
Accounts receivable from related parties	$	133		974	$	1,066		7,352
Accounts payable to related parties	$	876		6,392	$	412		2,841
Other current liabilities:
Customer deposits	$	380		2,772	$	368		2,542

Sales to ATR’s minority shareholder and its affiliates, which were in the ordinary course of business, approximated $2,419 (RMB 16,620) and $6,959 (RMB 46,049) for the three and nine months ended September 30, 2022, respectively, and $2,561 (RMB 16,553) and $6,686 (RMB 43,251) for the three and nine months ended September 30, 2021, respectively. The amount receivable from ATR’s minority shareholder and its affiliates for sales approximated $1,881 (RMB 13,387) at September 30, 2022. No amounts were receivable from ATR’s minority shareholder and its affiliates at December 31, 2021. Additionally, customer deposits received from ATR’s minority shareholder and its affiliates on future orders approximated $526 (RMB 3,746) and $616 (RMB 3,921) at September 30, 2022, and December 31, 2021, respectively, and are recorded in other current liabilities on the condensed consolidated balance sheets.21

Note 1819 – Business Segments

Presented below are the net sales and income ~~(loss)~~ before income taxes for the Corporation’s two business segments.

Three Months Ended September 30,

Nine Months Ended September 30,

2022

2021

2022

2021

Net sales:

Forged and Cast Engineered Products
$
75,511

$
61,179

$
229,848

$
195,558

Air and Liquid Processing

24,136

20,006

66,807

64,855

Total Reportable Segments
$
99,647

$
81,185

$
296,655

$
260,413

Income (loss) before income taxes:

Forged and Cast Engineered Products
$
(62
)

$
(2,832
)

$
1,107

$
688

Air and Liquid Processing

2,917

2,891

8,177

7,265

Total Reportable Segments

2,855

59

9,284

7,953

Other expense, including corporate costs

(734
)

(1,234
)

(4,587
)

(5,837
)
Total
$
2,121

$
(1,175
)

$
4,697

$
2,116

~~Note 19 – Subsequent Event~~


	Three Months Ended September 30,						Nine Months Ended September 30,
	2023			2022			2023			2022
Net sales:
Forged and Cast Engineered Products	$	73,625		$	75,511		$	228,004		$	229,848
Air and Liquid Processing		28,593			24,136			86,228			66,807
Total Reportable Segments	$	102,218		$	99,647		$	314,232		$	296,655
Income before income taxes:
Forged and Cast Engineered Products (1)	$	1,448		$	215		$	7,576		$	2,092
Air and Liquid Processing (2)		3,456			2,917			9,386			8,177
Total Reportable Segments		4,904			3,132			16,962			10,269
Other expense, including corporate costs		(3,593	)		(734	)		(13,205	)		(4,587	)
Total	$	1,311		$	2,398		$	3,757		$	5,682

(1)Income before income taxes for the Forged and Cast Engineered Products segment for the nine months ended September 30, 2023 includes proceeds of approximately $1,874 for the reimbursement of past energy costs at one of the Corporation's foreign operations by its local government. No future performance or conditions exist related to the reimbursement and, currently, no further reimbursements are expected.

~~On October 14, 2022,~~(2) Income before income taxes for the Air &and Liquid ~~completed a sale~~Processing segment for the three and ~~leaseback financing transaction with STORE, valued at $4,500 for its real property, including its manufacturing facility, located in North Tonawanda, New York. Net~~nine months ended September 30, 2023 includes proceeds ~~after transaction-related costs, approximated $4,444. In connection with the sale and leaseback financing transaction, UES and STORE amended the Restated Lease.~~of approximately $191 from an insolvent asbestos-related insurance carrier.

2022

ITEM 2 – MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS

(in thousands, except ~~share and~~ per share amounts)

Forward-Looking Statements

The Private Securities Litigation Reform Act of 1995 (the “Act”) provides a safe harbor for forward-looking statements made by us or on behalf of Ampco-Pittsburgh Corporation ~~(the~~and its subsidiaries (collectively, “we,” “us,” “our,” or the “Corporation”). Management’s Discussion and Analysis of Financial Condition and Results of Operations and other sections of this Quarterly Report on Form 10-Q, as well as the condensed consolidated financial statements and notes hereto, ~~may include,~~contain statements referencing forward-looking information, including, but are not limited to, statements about operating performance, trends and events ~~that~~ we expect or anticipate will occur in the future, ~~statements about~~ sales and production levels, restructurings, the impact from global pandemics ~~(including COVID-19)~~ and international conflicts, profitability and anticipated expenses, inflation, the global supply chain, future proceeds from the exercise of outstanding warrants, completion of the Corporation's strategic capital program, and cash outflows. All statements in this document other than statements of historical fact are statements that are, or could be, deemed “forward-looking statements” within the meaning of the Act and words such as “may,” “will,” “intend,” “believe,” “expect,” “anticipate,” “estimate,” “project,” “forecast,” and other terms of similar meaning that indicate future events and trends are also generally intended to identify forward-looking statements. Forward-looking statements speak only as of the date on which such statements are made, are not guarantees of future performance or expectations, and involve risks and uncertainties. For us, these risks and uncertainties include, but are not limited to:

•

economic downturns, cyclical demand for our products and insufficient demand for our products,

•

excess global capacity in the steel industry,

•

fluctuations in the value of the U.S. dollar relative to other currencies,

•

increases in commodity prices or insufficient hedging against increases in commodity prices, reductions in electricity and natural gas supply or shortages of key production materials for us or our customers,

•

limitations in availability of capital to fund our strategic plan,

•

inability to maintain adequate liquidity to meet our operating cash flow requirements, repay maturing debt and meet other financial obligations,

•

inability to obtain necessary capital or financing on satisfactory terms to acquire capital expenditures necessary to support our growth strategy,

•

inoperability of certain equipment on which we rely and/or our inability to execute our capital plan,

•

impairment of our long-lived assets as a result of any of these, or a combination of these, risks and uncertainties,

•

liability of our subsidiaries for claims alleging personal injury from exposure to asbestos-containing components historically used in certain products of our subsidiaries,

•

changes in the existing regulatory environment,

•

inability to successfully restructure our operations and/or invest in operations yielding the best long-term value to our shareholders,

•

consequences of global pandemics and international conflicts,

•

work stoppage or another industrial action on the part of any of our unions,

•

inability to satisfy the continued listing requirements of the New York Stock Exchange or the NYSE American Exchange,

•

potential attacks on information technology infrastructure and other cyber-based business disruptions,

•

failure to maintain an effective system of internal control,and

•

those discussed more fully elsewhere in this report and in documents filed with the Securities and Exchange Commission by us, particularly in Item 1A, Risk Factors, in Part I of our latest Annual Report on Form 10-K for the year ended December 31, 2022, and as supplemented by the risks described herein and in our Quarterly Reports on Form 10-Q for the quarters ended March 31, 2023 and June 30, 2023.

•

~~economic downturns, cyclical demand for our products and insufficient demand for our products,~~

•

~~excess global capacity in the steel industry,~~

•

~~fluctuations in the value of the U.S. dollar relative to other currencies,~~

•

~~limitations in availability of capital to fund our strategic plan,~~

•

~~inability to maintain adequate liquidity to meet our operating cash flow requirements, repay maturing debt and meet other financial obligations,~~

•

~~inability to obtain necessary capital or financing on satisfactory terms to acquire capital expenditures that may be necessary to support our growth strategy,~~

•

~~inoperability of certain equipment on which we rely,~~

•

~~liability of our subsidiaries for claims alleging personal injury from exposure to asbestos-containing components historically used in certain products of our subsidiaries,~~

•

~~changes in the existing regulatory environment,~~

•

~~inability to successfully restructure our operations,~~

•

~~consequences of global pandemics (including COVID-19) and international conflicts,~~

•

~~work stoppage or another industrial action on the part of any of our unions,~~

•

~~inability to satisfy the continued listing requirements of the New York Stock Exchange or the NYSE American Exchange,~~

•

~~potential attacks on information technology infrastructure and other cyber-based business disruptions,~~

•

~~failure to maintain an effective system of internal control~~, ~~and~~

•

We cannot guarantee any future results, levels of activity, performance or achievements. In addition, there may be events in the future ~~that~~ we are not able to predict accurately or control which may cause actual results to differ materially from expectations expressed or implied by forward-looking statements. Except as required by applicable law, we assume no obligation, and disclaim any obligation, to update forward-looking statements whether as a result of new information, events or otherwise.

The Business

~~Ampco-Pittsburgh~~The Corporation manufactures and ~~its subsidiaries (collectively, the “Corporation”) manufacture and sell~~sells 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~~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 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 and cold strip mills, medium/heavy section mills and plate mills. FEP principally are sold to customers in the steel distribution market, oil and gas industry and the aluminum and plastic extrusion industries. The segment has operations in the United States, England, Sweden, and Slovenia, and an equity interest in three 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 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 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 ~~OEM/~~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 distributes a significant portion of its products through ~~a common~~an independent group of sales offices located throughout the United States and Canada.

Executive Overview

•

Periodic disruptions to the global supply chain for the Corporation, its vendors and its customers,

•

Global inflationary pressures,

•

Depressed business activity in Europe and Asia (specifically China), and

•

Global economic uncertainty.

•

~~Periodic disruptions to the global supply chain for the Corporation and its customers,~~

•

~~Global inflationary pressures and~~

•

~~Delays in receiving and shipping product due to the lack of transportation.~~

For the FCEP segment, the forged roll market ~~conditions have recovered~~in North America has improved, driven by U.S. domestic demand, and better pricing. However, expectations are for flat to ~~pre-pandemic levels.~~declining demand during the first half of 2024 with recovery in the second half of 2024. Improved pricing and increased market share will help minimize the impact of this decline. The cast roll market has softened, which is expected to continue for the remainder of 2023 and into 2024, as Europe experiences economic uncertainty, the entry of low-priced product from China and relatively high cast roll inventories. The FEP market ~~also has strengthened with increasing demand from the steel distribution and oil and gas markets, on rising oil prices. Although the segment~~ continues to be ~~adversely impacted~~challenged by ~~escalating costs, particularly~~increased imports and high 2022 year-end inventory levels at bar distributors. In February 2023, Union Electric Steel Corporation, a wholly owned subsidiary of the Corporation, (“UES”) announced a price increase on all new quotations and orders for ~~raw~~forged and ancillary materials, energy and transportation, price increases and changes to surcharge policies announced in the fourth quarter of 2021 are absorbing a significant portion of these costs, albeit on a lag. Approximately 75% of customer orders include a commodity surcharge.cast roll products. The primary focus for this segment is to maintain a strong position in the roll market; continue diversification and ~~FEP markets, diversify and develop~~development of FEP for use in other ~~industries, complete~~industries; improve operational ~~and~~ efficiency ~~improvements~~ at its ~~facilities,~~facilities; and complete its capital equipment investment to upgrade existing equipment with a goal of reducing operating costs, improving reliability and increasing FEP capacity and capabilities.

~~For the~~The ALP ~~segment, the~~ businesses are ~~benefitting~~benefiting from ~~increasing~~steady demand and increased market share but ~~similarly,~~ are facing increasing production and transportation costs and supply chain issues. The segment has been implementing price increases for certain of its products to help mitigate these inflationary effects. The focus for this segment is to grow revenues, strengthen engineering and manufacturing capabilities to keep pace with growth opportunities and continue to improve its sales distribution network.

2224

Selected Financial Information


	Three Months Ended September 30,									Nine Months Ended September 30,								Three Months Ended September 30,									Nine Months Ended September 30,
	2022			2021			Change			2022			2021			Change		2023			2022			Change			2023			2022			Change
Net Sales:
Forged and Cast Engineered Products	$	75,511		$	61,179		$	14,332		$	229,848		$	195,558		$	34,290	$	73,625		$	75,511		$	(1,886	)	$	228,004		$	229,848		$	(1,844	)
Air and Liquid Processing		24,136			20,006			4,130			66,807			64,855			1,952		28,593			24,136			4,457			86,228			66,807			19,421
Consolidated	$	99,647		$	81,185		$	18,462		$	296,655		$	260,413		$	36,242	$	102,218		$	99,647		$	2,571		$	314,232		$	296,655		$	17,577

(Loss) Income from Operations:
Income from Operations:
Forged and Cast Engineered Products	$	(62	)	$	(2,832	)	$	2,770		$	1,107		$	688		$	419	$	1,448		$	215		$	1,233		$	7,576		$	2,092		$	5,484
Air and Liquid Processing		2,917			2,891			26			8,177			7,265			912		3,456			2,917			539			9,386			8,177			1,209
Corporate costs		(2,929	)		(2,420	)		(509	)		(8,435	)		(8,938	)		503		(3,182	)		(2,929	)		(253	)		(9,959	)		(8,435	)		(1,524	)
Consolidated	$	(74	)	$	(2,361	)	$	2,287		$	849		$	(985	)	$	1,834	$	1,722		$	203		$	1,519		$	7,003		$	1,834		$	5,169

										September 30, 2022			December 31, 2021			Change											September 30, 2023			December 31, 2022			Change
Backlog:
Forged and Cast Engineered Products										$	227,534		$	223,321		$	4,213										$	260,396		$	252,165		$	8,231
Air and Liquid Processing											106,117			69,233			36,884											142,786			116,853			25,933
Consolidated										$	333,651		$	292,554		$	41,097										$	403,182		$	369,018		$	34,164

Net sales approximated ~~$99,647~~$102,218 and ~~$81,185~~$99,647 for the three months ended September 30, ~~2022,~~2023 and ~~2021,~~2022, respectively, and ~~$296,655~~$314,232 and ~~$260,413~~$296,655 for the nine months ended September 30, ~~2022,~~2023 and ~~2021,~~2022, respectively. The increase ~~primarily~~ is attributable to higher sales for the ~~FCEP~~ALP segment. A discussion of net sales for the Corporation’s two segments is included below.

~~(Loss) income~~Income from operations approximated ~~$(74)~~$1,722 and ~~$(2,361)~~$203 for the three months ended September 30, ~~2022,~~2023 and ~~2021,~~2022, respectively, and ~~$849~~$7,003 and ~~$(985)~~$1,834 for the nine months ended September 30, ~~2022,~~2023 and ~~2021,~~2022, respectively. Included in ~~(loss)~~operating income for the three and nine months ended September 30, 2023 is a credit of approximately $191 for proceeds received from an insolvent asbestos-related insurance carrier (the “Asbestos-Related Credit”) and, for the nine months ended September 30, 2023, a credit of approximately $1,874 for the reimbursement of past energy costs at one of the Corporation's foreign operations by its local government (the “Foreign Energy Credit”). Included in operating income for the nine months ended September 30, 2022 is a charge of approximately $664 for excess COVID-19 subsidies received in 2020 ~~but~~and returned in 2022 ~~(“the Refund~~(the “Refund of Excess COVID-19 Subsidies”) and a benefit of approximately $1,431 resulting from a change in how certain employees earn certain benefits (the “Change in Employee Benefit Policy”). A discussion of ~~(loss)~~ income from operations for the Corporation’s two segments is included below. Corporate costs decreased for the nine months ended September 30, 2022, when compared to the nine months ended September 30, 2021, due to lower employee-related costs including lower incentive compensation and a portion of the benefit from the Change in Employee Benefit Policy being attributable to Corporate employees.

Backlog equaled ~~$333,651~~$403,182 as of September 30, ~~2022,~~2023 versus ~~$292,554~~$369,018 as of December 31, ~~2021.~~2022. 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 collectability, 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 and certain surcharges are not determinable until the order is completed and ready for shipment to the customer. Approximately ~~60%~~69% of the backlog is expected to be released after ~~2022.~~2023. A discussion of backlog by segment is included below.

Costs of products sold, excluding depreciation and amortization, as a percentage of net sales, for the three months ended September 30, 2023 and 2022 approximated 82.7% and ~~2021,~~84.4%, respectively, and for the nine months ended September 30, 2023 and 2022 approximated ~~84.7%~~81.6% and ~~83.7%~~84.2%, respectively. While ~~gross margins were slightly better for the FCEP segment for the third quarter of 2022 when compared to the third quarter of 2021,~~ gross margins for the ALP segment for each of the current year periods were ~~slightly~~ less when compared to the same periods of the prior year, primarily as a result of higher costs and an unfavorable product ~~mix.~~mix, gross margins for the FCEP segment continue to improve primarily as a result of higher pricing. Costs of products sold, excluding depreciation and amortization, ~~as a percentage~~for the nine months ended September 30, 2023 include the Foreign Energy Credit. Costs of ~~net sales,~~products sold, excluding depreciation and amortization, for the nine months ended September 30, 2022 included the Refund of Excess COVID-19 Subsidies and 2021, approximated 84.5% and 81.8%, respectively. The increase was primarily attributable to the FCEP segment which experienced higher costs, particularly for direct and indirect materials, energy and transportation when compared to the same periodapproximately $411 of the ~~prior year. Although a portion of these costs are recovered via~~benefit from the ~~variable-index surcharge, there is a lag between the time the costs are incurred and the time the variable-index surcharge is invoiced to the customer.~~
Change in Employee Benefit Policy.

2325

Selling and administrative expenses ~~were comparable~~approximated $11,821 and $11,089 for the three months ended September 30, 2023 and 2022, respectively, and ~~2021,~~$38,101 and ~~approximated $11,089~~$31,941 for the nine months ended September 30, 2023 and ~~$10,910,~~2022, respectively. Selling and administrative expenses for the 2023 periods include higher employee-related costs and a higher inflationary effect on costs whereas selling and administrative expenses for the first nine months ~~ended September 30,~~of 2022 ~~and 2021, approximated $31,941 and $34,538, respectively,~~include approximately $1,020 of the benefit from the Change in Employee Benefit Policy.

Credit for asbestos litigation of $191 in 2023 represents a ~~decrease of $2,597. The decrease primarily is attributable to:~~

•credit for proceeds received from an insolvent asbestos-related insurance carrier.

Lower exchange rates used to translate the selling and administrative costs of the Corporation’s foreign subsidiaries into the U.S. dollar, which reduced selling and administrative expenses by approximately $1,200 for nine months ended September 30, 2022, when compared to the prior year, and,

•

~~Benefit from the Change in Employee Benefit Policy, which reduced selling and administrative expenses by approximately $1,020 for the nine months ended September 30, 2022.~~

Investment-related income relates ~~primarily~~primary to dividends from one of the ~~Corporation’s~~Corporation's Chinese joint ventures. In the third quarter of 2023 and 2022, the Chinese joint venture declared ~~a dividend which equaled~~dividends totaling $92 and $504 for the ~~Corporation. In the second quarter of 2021, the Chinese joint venture declared a dividend which equaled $1,025 for the Corporation.~~Corporation, respectively.

Interest expense approximated ~~$1,486~~$2,468 and ~~$834~~$1,486 for the three months ended September 30, ~~2022,~~2023 and ~~2021,~~2022, respectively, and ~~$3,684~~$6,784 and ~~$2,672~~$3,684 for the nine months ended September 30, ~~2022,~~2023 and ~~2021,~~2022, respectively. The increase for ~~each of~~ the current year periods when compared to the same periods of the prior year is principally due ~~to higher~~to:

•

Interest on the sale and leaseback financing transactions and the equipment financing arrangement completed during the second half of 2022,

•

Higher average interest rates for 2023 versus 2022, and

•

Higher average borrowings outstanding under the revolving credit facility ~~and higher interest rates.~~

in 2023 versus 2022.

Other income – net is comprised of the following:


	Three Months Ended September 30,									Nine Months Ended September 30,									Three Months Ended September 30,									Nine Months Ended September 30,
	2022			2021			Change			2022			2021			Change			2023			2022			Change			2023			2022			Change
Net pension and other postretirement income	$	1,631		$	1,672		$	(41	)	$	4,931		$	5,015		$	(84	)	$	1,257		$	1,631		$	(374	)	$	3,770		$	4,931		$	(1,161	)
Gain (loss) on foreign exchange transactions		1,809			369			1,440			3,368			(705	)		4,073			892			1,809			(917	)		(267	)		3,368			(3,635	)
Unrealized (loss) gain on Rabbi trust investments		(276	)		(56	)		(220	)		(1,292	)		359			(1,651	)		(207	)		(276	)		69			41			(1,292	)		1,333
Other		10			21			(11	)		12			25			(13	)		17			10			7			(120	)		12			(132	)
	$	3,174		$	2,006		$	1,168		$	7,019		$	4,694		$	2,325		$	1,959		$	3,174		$	(1,215	)	$	3,424		$	7,019		$	(3,595	)

Other income – net fluctuated period over period due to:

•

Lower pension and other postretirement income due to ~~changes~~higher interest costs on employee benefit obligations as a result of higher discount rates;

•

Changes in foreign exchange gains and losses, and ~~as a result of recent volatility~~

•

Changes in ~~the financial markets,~~ unrealized gains and losses in the market value of the Rabbi trust ~~investments.~~

investments corresponding to the volatility in the financial markets.

Income tax provision for each of the periods 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 of the periods include the effects of changes in the pre-tax income of the Corporation’s profitable operations in each jurisdiction. In late 2022, as a result of significant increases in energy costs for the U.K. resulting from the Russia-Ukraine conflict, the Corporation moved certain of its cast roll production from the U.K. to Sweden. Accordingly, profitability of the Corporation's U.K. operations has declined and profitability of the Corporation's Sweden operations has increased. While the associated tax expense for the Corporation's U.K. operations also has declined, there is no corresponding increase in tax expense for the Sweden operations given net operating loss carryforwards, fully offset by valuation allowances.

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 current earnings and anticipated future earnings in Sweden, 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 profitability achieved. Once the valuation allowance is completely reversed, a tax provision would be recognized on future earnings.

Conversely, given the Corporation's current losses in the U.K. and anticipated changes to the net deferred tax position in the U.K., the Corporation believes there is a reasonable possibility within the next 12 months, sufficient negative evidence may become available to conclude a valuation allowance is warranted on the net deferred income tax assets of the Corporation's U.K. operations. ~~In addition,~~Creation of a new valuation allowance would result in the derecognition of deferred income tax assets on the Corporation's consolidated balance sheet and an increase to the Corporation's income tax expense in the period the valuation allowance is established. The exact timing and the amount of the valuation allowance established are subject to, among many items, the level of profitability achieved.

The income tax provision for the three and nine months ended September 30, 2022 includes expense of $316 resulting from the revaluation of ~~certain~~the deferred income tax assets ~~associated with~~of the ALP segment following new legislation enacted in 2022, which will decrease the Pennsylvania state income tax rate ~~change. By comparison,~~from 9.99% to 4.99% by 2031.

Net income attributable to Ampco-Pittsburgh and net income per common share attributable to Ampco-Pittsburgh equaled $809 and $0.04 per common share and $1,123 and $0.06 per common share for the ~~income tax provision~~three months ended September 30, 2023 and 2022, respectively, and $1,908 and $0.10 per common share and $3,879 and $0.20 per common share for the nine months ended September 30, ~~2021, includes $523 of expense associated with the (i) restructuring of a foreign sales office~~2023 and ~~(ii) revaluation of the deferred income taxes of the Corporation’s U.K. entity following new legislation enacted in 2021, which will increase the U.K. corporate tax rate from 19% to 25% in 2023.~~2022, respectively.

Net income attributable to Ampco-Pittsburgh and net income ~~(loss)~~ per common share attributable to Ampco-Pittsburgh ~~equaled $846 and $0.04 per common share and $2,894 and $0.15 per common share~~ for the three ~~and nine~~ months ended September 30, ~~2022, respectively, and $(1,589) and $(0.08)~~2023 include an after-tax benefit of $185 or $0.01 per common share ~~and $(359) and $(0.02) per common share for~~associated with the ~~three and nine months ended September 30, 2021, respectively.~~Asbestos-Related Credit.

Net income attributable to Ampco-Pittsburgh and net income per common share attributable to Ampco-Pittsburgh for the nine months ended September 30, 2023 include an after-tax benefit of $2,059 or $0.11 per common share associated with the Asbestos-Related Credit and the Foreign Energy Credit.

Net income attributable to Ampco-Pittsburgh and net income per common share attributable to Ampco-Pittsburgh for the three months ended September 30, 2022 include expense of $316 or $0.02 per common share for the revaluation of certain deferred income tax assets of the ALP segment following new legislation enacted in 2022, which will decrease the Pennsylvania state income tax rate.

Net income attributable to Ampco-Pittsburgh and net income per common share attributable to Ampco-Pittsburgh for the nine months ended September 30, 2022 include a net benefit of $427 or $0.02 per common share ~~for:~~

•

~~The~~for the after-tax benefit from the Change in Employee Benefit Policy of $1,407 offset by the after-tax charge associated with the Refund of Excess COVID-19 Subsidies of $664 and the ~~Change in Employee Benefit Policy of $1,407 offset by~~

•

~~The after-tax charge associated with the Refund of Excess COVID-19 Subsidies of $664 and~~

•

~~The~~ revaluation of certain deferred income tax assets of the ALP segment associated with the change in the Pennsylvania state income tax rate of $316.

Net (loss) attributable to Ampco-Pittsburgh and (loss) per common share attributable to Ampco-Pittsburgh for the nine months ended September 30, 2021, include net expense of $522 or $0.03 per common share for (i) the restructuring of a foreign sales office and (ii) the revaluation of the deferred income taxes of the Corporation’s U.K. entity following new legislation enacted in 2021, which will increase the U.K. corporate tax rate from 19% to 25% in 2023.

Net Sales and Operating Results by Segment

Forged and Cast Engineered Products


	Three Months Ended September 30,								Nine Months Ended September 30,						Three Months Ended September 30,							Nine Months Ended September 30,
	2022			2021			Change		2022		2021		Change		2023		2022		Change			2023		2022		Change
Net Sales:
Forged and cast mill rolls	$	66,653		$	53,778		$	12,875	$	193,946	$	177,918	$	16,028	$	68,325	$	66,653	$	1,672		$	213,027	$	193,946	$	19,081
FEP		8,858			7,401			1,457		35,902		17,640		18,262		5,300		8,858		(3,558	)		14,977		35,902		(20,925	)
	$	75,511		$	61,179		$	14,332	$	229,848	$	195,558	$	34,290	$	73,625	$	75,511	$	(1,886	)	$	228,004	$	229,848	$	(1,844	)

(Loss) Income from Operations	$	(62	)	$	(2,832	)	$	2,770	$	1,107	$	688	$	419
Income from Operations															$	1,448	$	215	$	1,233		$	7,576	$	2,092	$	5,484

									September 30, 2022		December 31, 2021		Change									September 30, 2023		December 31, 2022		Change
Backlog									$	227,534	$	223,321	$	4,213								$	260,396	$	252,165	$	8,231

Net sales for the three and nine months ended September 30, 2023, when compared to the three and nine months ended September 30, 2022, were impacted by:

•

Lower volume of FEP shipments, which decreased net sales by approximately $4,300 and $22,500 for the three and nine months ended September 30, 2023, respectively;

•

Lower volume of cast roll shipments, which decreased net sales by approximately $3,800 and $4,000 for the three and nine months ended September 30, 2023, respectively;

•

Lower variable-index surcharges passed through to customers as a result of fluctuation in the price of raw material, energy and transportation, net of improved pricing, which decreased net sales by approximately $3,100 for the three months ended September 30, 2023; however, improved pricing, net of lower variable-index surcharges, increased net sales by approximately $9,400 for ~~each~~the nine months ended September 30, 2023;

•

Higher volume of forged roll shipments, which increased net sales by approximately $8,900 and $19,000 for the three and nine months ended September 30, 2023, respectively; and

•

Changes in exchange rates used to translate the net sales of the ~~current year periods~~segment’s foreign subsidiaries into the U.S. dollar, which increased net sales by approximately $600 for the three months ended September 30, 2023 and decreased net sales by approximately $3,700 for the nine months ended September 30, 2023.

Income from operations for the three and nine months ended September 30, 2023, when compared to the same periods of the prior year, ~~principally due to:~~were impacted by:

•

~~Higher pricing and variable-index surcharges passed through to customers as a result of higher raw material, energy and transportation costs, which increased net sales by $15,400 and $42,800~~•

Improved pricing, net of lower variable-index surcharges and fluctuations in manufacturing costs, which increased operating results by approximately $1,400 and $7,900 for the three and nine ~~months ended September 30, 2022, respectively,~~

•

Higher volume of mill roll shipments primarily resulting from the timing of deliveries, which increased net sales by approximately $8,600 and $4,800 for the three and nine months ended September 30, 2022, respectively,

•

Higher volume of FEP shipments as a result of increased demand from the steel distribution and oil and gas markets, which increased net sales by approximately $4,600 for the nine months ended September 30, 2022, but decreased net sales by approximately $2,600 for the three months then ended,

•

~~Changes in product mix, which decreased net sales by $1,800 and $6,600 for the three and nine months ended September 30, 2022, respectively, and~~

•

Changes in exchanges rates used to translate net sales of the segment’s foreign subsidiaries into the U.S. dollar, which decreased net sales by approximately $5,300 and $11,300 for the three and nine months ended September 30, 2022, respectively.

Operating results for the current year periods improved when compared to the same periods of the prior year. While the segment continues to experience escalating costs for raw and ancillary materials, energy, transportation, direct labor and other items, a significant portion of these increases was recovered via the variable-index surcharge mechanism and higher pricing. The variable-index surcharge is known at the time of shipment and increases or decreases, as applicable, the selling price of the product for the corresponding changes in the published index cost of certain raw materials and energy. The variable-index surcharge is recognized as revenue when the corresponding sale of the inventory is recognized. However, since the cost of domestic raw materials, work-in-process and finished goods is primarily determined by the last-in, first-out method, the higher or lower costs of those certain raw materials and energy are recognized prior to the variable-index surcharge thus creating a lag between the time these costs are incurred and the time these costs are recovered.

~~For the three~~ months ended September 30, 2023, respectively;

•

Net benefit resulting from the Foreign Energy Credit in 2023 versus the Refund of Excess COVID-19 Subsidies and the Change in Employee Benefit Policy in 2022, ~~the~~which improved ~~pricing and variable-indexed surcharge exceeded the higher raw material, energy and transportation costs~~operating income by approximately ~~$800 but,~~$2,000 for the nine months ended September 30, ~~2022, under-recovered~~2023, respectively;

•

Lower absorption resulting from the temporary and periodic idling of certain equipment to align production with customer demand, which reduced operating results by approximately ~~$2,100~~$600 and $1,300 for the three and nine months ended September 30, 2023, respectively;

•

Selling and administrative expenses, principally due to changes in employee-related costs, increased operating results by approximately $600 for the three months ended September 30, 2023, but decreased operating results by approximately $1,300 for the nine months ended September 30, 2023; and

•

Lower net volume of shipments, which reduced operating results by approximately $200 and $1,900 for the three and nine months ended September 30, 2023, respectively.

Changes in exchange rates did not have a significant impact on operating results for the three and nine months ended September 30, 2023 when compared to the ~~same period of the prior year.~~

~~In addition, (loss) income from operations improved for each of the current year periods when compared to the same periods of the prior year due to:~~

•

~~Higher volume of shipments, which had a net improvement on operating results of $1,400 and $1,500 for the~~ three and nine months ended ~~September 30, 2022, respectively,~~

•

Lower selling and administrative costs of approximately $700 and $2,100 for the three and nine months ended September 30, 2022, respectively, including the savings generated from the Change in Employee Benefit Policy of $562 for the nine months ended September 30, 2022,

•

~~Lower losses on the sale of equipment of approximately $300 for the three and nine months ended September 30, 2022, offset by~~

•

~~Expense associated with the Refund of Excess COVID-19 Subsidies in the second quarter of 2022 of $664, and~~

•

Changes in exchanges rates used to translate the operating results of the segment’s foreign subsidiaries into the U.S. dollar, which reduced operating results by approximately $360 and $620 for the three and nine months ended September 30, 2022, respectively.

~~Backlog increased slightly at~~ September 30, ~~2022, from December 31, 2021, by $4,213. The backlog of orders for rolls~~2022.

Backlog increased at September 30, ~~2022,~~2023 from December 31, ~~2021,~~2022 by $8,231. The backlog for mill roll orders at September 30, 2023 increased from December 31, 2022 by approximately ~~$31,800~~$18,100 with backlog for forged rolls increasing, driven by U.S. domestic demand and better pricing, and backlog for cast rolls decreasing due to ~~improved demand~~economic uncertainty across Europe, the entry of low-priced product from ~~flat-rolled steel~~China and ~~aluminum customers and improved pricing.~~relatively high cast roll inventories. The backlog ~~of orders~~ for FEP decreased at September 30, ~~2022,~~2023 from December 31, ~~2021,~~2022 by approximately ~~$11,500~~$6,400 due to ~~timing~~softening of ~~receipt of new orders from customers.~~the energy and steel distribution markets and increased imports. Lower foreign exchange rates used to translate the backlog of the ~~Corporation’s~~Corporation’s foreign ~~subsidiaries~~subsidies into the U.S. dollar ~~also reduced~~decreased backlog at September 30, ~~2022,~~2023 when compared to backlog at December 31, ~~2021,~~2022 by approximately ~~$16,100.~~$3,400. At September 30, ~~2022,~~2023, approximately ~~59%~~64% of backlog is expected to ship after ~~2022.~~2023.

Air and Liquid Processing


	Three Months Ended September 30,						Nine Months Ended September 30,							Three Months Ended September 30,						Nine Months Ended September 30,
	2022		2021		Change		2022		2021		Change			2023		2022		Change		2023		2022		Change
Net Sales:
Heat exchange coils	$	8,532	$	6,527	$	2,005	$	22,483	$	18,482	$	4,001		$	10,068	$	8,532	$	1,536	$	31,808	$	22,483	$	9,325
Air handling systems		8,457		6,383		2,074		22,133		21,235		898			9,357		8,457		900		27,453		22,133		5,320
Centrifugal pumps		7,147		7,096		51		22,191		25,138		(2,947	)		9,168		7,147		2,021		26,967		22,191		4,776
	$	24,136	$	20,006	$	4,130	$	66,807	$	64,855	$	1,952		$	28,593	$	24,136	$	4,457	$	86,228	$	66,807	$	19,421

Income from Operations	$	2,917	$	2,891	$	26	$	8,177	$	7,265	$	912		$	3,456	$	2,917	$	539	$	9,386	$	8,177	$	1,209

							September 30, 2022		December 31, 2021		Change									September 30, 2023		December 31, 2022		Change
Backlog							$	106,117	$	69,233	$	36,884								$	142,786	$	116,853	$	25,933

Net sales for the three and nine months ended September 30, ~~2022,~~2023 improved over the comparable prior year periods by ~~$4,130~~approximately $4,500 and ~~$1,952,~~$19,400, respectively. More specifically,

•

Sales of heat exchange coils benefited from a higher volume of shipments to commercial customers and, for the nine months ended September 30, 2023, to industrial customers.

•

Sales of air handling systems improved due to increased order intake.

•

Sales of centrifugal pumps increased from a higher volume of shipments to commercial customers and U.S. Navy-related customers.

•

~~Sales of heat exchange coils benefited from a higher volume of shipments to commercial and industrial customers and~~

•

~~Sales of air handling systems improved due to increased order intake, while~~

•

~~Sales of centrifugal pumps were adversely affected by supply chain delays for purchased components and customer delays~~.

~~Operating income benefitted from the higher sales but was offset by unfavorable product mix, particularly in the third quarter of 2022.~~ Operating income for the three and nine months ended September 30, 2023 improved when compared to the three and nine months ended September 30, 2022 principally due to:

•

Higher volume of sales, net of higher costs and an unfavorable product mix, which improved operating results by approximately $700 and $3,400 for the three and nine months ended September 30, 2023, respectively; and

•

The Asbestos-Related Credit of $191 for the three and nine months ended September 30, 2023; offset by

•

Higher selling and administrative costs of approximately $300 and $1,700 for the three and nine months ended September 30, 2023, respectively, primarily as a result of higher commissions and employee-related costs including costs associated with expansion of the segment’s sales distribution network; and

•

Recognition of a $680 benefit to operating income for the nine months ended September 30, 2022 ~~includes a benefit~~resulting from the Change in Employee Benefit ~~Policy of $680.~~

Policy.

Backlog at September 30, ~~2022,~~2023 increased from December 31, ~~2021,~~2022 by ~~$36,884~~$25,933 with backlog for each product line improving as a result of record-level order intake. In particular, the segment received a $9,600 order for a custom air handling unit project with a major healthcare provider which is expected to ship in 2023.improving. At September 30, ~~2022,~~2023, approximately ~~64%~~78% of backlog is expected to ship after ~~2022.~~2023.

Non-GAAP Financial Measures

The Corporation presents non-GAAP adjusted ~~(loss)~~ income from operations, which is calculated as ~~(loss)~~ income from operations excluding the Asbestos-Related Credit, the Foreign Energy Credit, the Refund of Excess COVID-19 Subsidies and the Change in Employee Benefit Policy. 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. Non-GAAP financial measures should be viewed as supplements to, and not substitutes for, the Corporation's presentation of the applicable most directly comparable GAAP financial measures.

The Corporation has presented non-GAAP adjusted ~~(loss)~~ income from operations because the Corporation's management and Board of Directors believe it is a key measure ~~used by the Corporation’s management and Board of Directors~~ to understand and evaluate the Corporation’s operating performance and to develop operational goals for managing ~~its~~the business. This non-GAAP financial measure excludes significant charges or credits, that are one-time charges or credits, unrelated to the Corporation’s ongoing results of operations or beyond its control. Additionally, a portion of the incentive and compensation arrangements for certain employees is based on the Corporation’s business performance. The Corporation believes this non-GAAP financial measure helps identify underlying trends in its business that could otherwise be masked by the effect of the items that it excludes from adjusted ~~(loss)~~ income from operations. The Corporation also believes this non-GAAP financial measure provides 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 greater transparency with respect to key financial metrics used by the Corporation’s management in its financial and operational decision-making.

Adjusted ~~(loss)~~ income from operations is 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 adjusted ~~(loss)~~ income from operations rather than ~~(loss)~~ income from operations, which is the nearest GAAP equivalent. Among other things, there can be no assurance ~~that charges~~benefits similar to the Asbestos-Related Credit, the Foreign Energy Credit and the Change in Employee Benefit Policy or costs similar to the Refund of Excess COVID-19 Subsidies ~~and benefits similar to the Change in Employee Benefit Policy~~ will not occur in future periods.

The adjustments reflected in adjusted ~~(loss)~~ income from operations are pre-tax. The tax impact associated with the adjustments is not significant ~~approximately $24,~~ due to the Corporation having a valuation allowance recorded against the deferred income tax assets for the majority of the jurisdictions where the expense and income are recognized.

The following is a reconciliation of ~~(loss)~~ income from operations to non-GAAP adjusted ~~(loss)~~ income from operations for the three and nine months ended September 30, ~~2022,~~2023 and ~~2021,~~2022, respectively:

Three Months Ended September 30,

Nine Months Ended September 30,

2022

2021

2022

2021

(Loss) income from operations, as reported (GAAP)

$
(74
)

$
(2,361
)

$
849

$
(985
)
Refund of Excess COVID-19 Subsidies ⁽¹⁾

0

0

664

0

Change in Employee Benefit Policy ⁽²⁾

0

0

(1,431
)

0

(Loss) income from operations, as adjusted (Non-GAAP)

$
(74
)

$
(2,361
)

$
82

$
(985
)


	Three Months Ended September 30,					Nine Months Ended September 30,
	2023			2022		2023			2022
Income from operations, as reported (GAAP)	$	1,722		$	203	$	7,003		$	1,834
Asbestos-Related Credit (1)		(191	)		-		(191	)		-
Foreign Energy Credit (2)		-			-		(1,874	)		-
Refund of Excess COVID-19 Subsidies (3)		-			-		-			664
Change in Employee Benefit Policy (4)		-			-		-			(1,431	)
Income from operations, as adjusted (Non-GAAP)	$	1,531		$	203	$	4,938		$	1,067

~~(1)~~

~~Represents excess COVID-19 subsidies received in 2020 and returned in 2022.~~

(1)

Represents proceeds received from an insolvent asbestos-related insurance carrier.

~~(2)~~

~~Represents a benefit resulting from a change in how certain employees earn certain benefits.~~

(2)

Represents reimbursement of past energy costs at one of the Corporation's foreign operations by its local government.

(3)

Represents excess COVID-19 subsidies received in 2020 and returned in 2022.

(4)

Represents benefit resulting from a change in how certain employees earn certain benefits.

Liquidity and Capital Resources


	Nine Months Ended September 30,									Nine Months Ended September 30,
	2022			2021			Change			2023			2022			Change
Net cash flows used in operating activities	$	(20,405	)	$	(4,398	)	$	(16,007	)	$	(10,327	)	$	(20,405	)	$	10,078
Net cash flows used in investing activities		(12,516	)		(11,521	)		(995	)		(13,515	)		(12,516	)		(999	)
Net cash flows provided by financing activities		35,908			11,609			24,299			21,323			35,908			(14,585	)
Effect of exchange rate changes on cash and cash equivalents		(1,134	)		(281	)		(853	)		(146	)		(1,134	)		988
Net increase (decrease) in cash and cash equivalents		1,853			(4,591	)		6,444
Net (decrease) increase in cash and cash equivalents											(2,665	)		1,853			(4,518	)
Cash and cash equivalents at beginning of period		10,337			16,842			(6,505	)		8,735			10,337			(1,602	)
Cash and cash equivalents at end of period	$	12,190		$	12,251		$	(61	)	$	6,070		$	12,190		$	(6,120	)

Net cash flows used in operating activities equaled ~~$(20,405)~~$(10,327) and ~~$(4,398)~~$(20,405) for the nine months ended September 30, 2023 and 2022, respectively, and ~~2021, respectively.~~principally is attributable to the Corporation's investment in working capital. The ~~significant~~ change ~~between~~in net cash flows used in operating activities for the ~~years~~nine months ended September 30, 2023 when compared to the nine months ended September 30, 2022 primarily is due to ~~the ongoing~~lower investment in ~~trade~~ working ~~capital due to a higher level~~capital. Net cash flows used in operating activities for 2023 include proceeds from the Asbestos-Related Credit and the Foreign Energy Credit. Net cash flows used in operating activities for 2022 include repayment of ~~business activity resulting from increased demand and, for inventories, higher costs associated with inflation and supply chain disruptions.~~the Refund of Excess COVID-19 Subsidies.

Net cash flows used in investing activities equaled ~~$(12,516)~~$(13,515) and ~~$(11,521)~~$(12,516) for the nine months ended September 30, 2023 and 2022, respectively, and ~~2021, respectively. Capital~~primarily represented capital expenditures for ~~each of~~ the ~~periods were relatively comparable and~~FCEP segment related ~~primarily~~ to the ~~FCEP segment. The Corporation has undertaken a significant~~$26,000 capital program ~~approximating $27,000~~undertaken to upgrade existing equipment at certain of its ~~FCEP locations, which~~locations. The capital program is anticipated to be substantially completed by December 31, 2023. At September 30, ~~2022,~~2023, commitments for future capital expenditures, including those associated with the FCEP capital program, approximated ~~$19,300.~~$7,300 which is expected to be spent over the next 12-15 months.

Net cash flows provided by financing activities equaled ~~$35,908~~$21,323 and ~~$11,609~~$35,908 for the nine months ended September 30, 2023 and 2022, ~~and 2021, respectively. The change period over period~~respectively, a decrease of $14,585 primarily is due to:

•

Lower net borrowings from the Corporation’s revolving credit facility of $3,205;

•

Lower proceeds from the sale and leaseback financing arrangements of $15,500; and

•

Lower net proceeds from related-party borrowings of $1,522; offset by

•

Higher proceeds from the equipment financing facility of $2,808 and

•

Proceeds from the Disbursement Agreement for leasehold improvements between UES and Store Capital Acquisitions, LLC of $2,500.

•

~~Net borrowings from the Corporation’s revolving credit facility of $15,717 versus $10,516 in the prior year,~~

•

~~Proceeds from a sale and leaseback financing transaction completed in the third quarter of 2022 equaling $15,500,~~

•

~~Proceeds from an equipment financing facility completed in the third quarter of 2022, which provided proceeds of $4,014,~~

•

Net borrowings from one of the Corporation’s Chinese joint ventures from its minority shareholder of $1,525 for the nine months ended September 30, 2022, in comparison to repayments of $1,065 for the nine months ended September 30, 2021, offset by

•

~~Lower proceeds from shareholders exercising warrants for the Corporation’s common stock of $3,308.~~

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 ~~increased~~decreased by ~~$1,853~~$2,665 during ~~2022~~2023 and ended the period at ~~$12,190~~$6,070 in comparison to ~~$10,337~~$8,735 at December 31, ~~2021.~~2022. 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 were to remit any foreign earnings to it or any of its U.S. entities, the estimated tax impact would 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 and debt service costs. The maturity date for the revolving credit facility is June 29, 2026 and, subject to the other terms and conditions of the revolving credit agreement, will become due on that date. As of September 30, ~~2022,~~2023, remaining availability under the revolving credit facility approximated ~~$35,622,~~$21,724, net of standard availability reserves.

Availability under the Corporation’s equipment financing facility ~~and the Disbursement Agreement are~~is expected to be sufficient to finance the remaining expenditures associated with the capital program for the FCEP segment, in the ~~timeframe~~time frame currently anticipated. At September 30, ~~2022,~~2023, availability under the equipment financing facility ~~and Disbursement Agreement~~ approximated ~~$18,500.~~$6,790. Each borrowing on the equipment financing facility will constitute a secured loan transaction (each, a “Term Loan”). Each Term Loan will convert to a Term Note on the earlier of (i) the date in which the associated equipment is placed in service or (ii) December ~~31,~~29, 2023. Each Term Note will have a term of 84 months, ~~in arrears fully amortizing and will commence~~with payment commencing on the date of the Term Note. ~~Borrowings under~~Since a significant portion of the ~~Disbursement Agreement~~Corporation's debt includes variable interest, increases in the underlying benchmark rates will ~~be repaid over~~increase the Corporation's debt service costs.

Valuation allowances are recorded against the majority of the Corporation's deferred income tax assets. 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 but would not impact the liquidity of the Corporation. Similarly, any new valuation allowance against the Corporation's deferred income tax assets would result in the derecognition of deferred income tax assets on the Corporation's consolidated balance sheet and an ~~initial term of 20 years – through August 2042.~~increase to the Corporation's income tax expense in the period the valuation allowance is created but would not impact the Corporation's liquidity.

Litigation and Environmental Matters

See Note 1516 and Note 1617 to the condensed consolidated financial statements.

Critical Accounting Pronouncements

The Corporation’s critical accounting policies, as summarized in its Annual Report on Form 10-K for the year ended December 31, ~~2021,~~2022, remain unchanged.

Recently Issued Accounting Pronouncements

See Note 1 to the condensed consolidated financial statements.

ITEM 3 – QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Not applicable.

ITEM 4 – CONTROLS AND PROCEDURES

Disclosure controls and procedures. An evaluation of the effectiveness of the Corporation’s disclosure controls and procedures as of the end of the period covered by this report was carried out under the supervision, and with the participation, of management, including the principal executive officer and principal financial officer. Disclosure controls and procedures are defined under Securities and Exchange Commission (“SEC”) rules as controls and other procedures ~~that are~~ designed to ensure ~~that~~ information required to be disclosed by a company in the reports ~~that~~ it files under the Securities Exchange Act of 1934 (as amended, the “Exchange Act”) is recorded, processed, summarized and reported within the required time periods. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure ~~that~~ information required to be disclosed by an issuer in the reports ~~that~~ it files or submits under the Exchange Act is accumulated and communicated to the issuer’s management, including its principal executive and principal financial officers, or persons performing similar functions, as appropriate, to allow timely decisions regarding required disclosure. Based on that evaluation, the Corporation’s management, including the principal executive officer and principal financial officer, has concluded, ~~that~~as of September 30, 2023, the Corporation’s disclosure controls and procedures were not effective due to material weaknesses (as defined in SEC Rule 12b-2) in its internal control over financial reporting.

Previously reported material weaknesses. A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting such that there is a reasonable possibility a material misstatement of the annual or interim financial statements will not be prevented or detected on a timely basis. As disclosed in the Corporation’s Annual Report on Form 10-K for the year ended December 31, 2022, management determined there were material weaknesses related to (i) the accounting for the claims asserted alleging personal injury from exposure to asbestos-containing components historically used in some products manufactured by predecessors of Air & Liquid Systems Corporation (“Asbestos Liability”) and (ii) management review control activities related to the tax accounting for a non-routine transaction. Although substantial progress has been made in the Corporation’s remediation plan (discussed below), the Corporation’s management has concluded these material weaknesses continue to exist as of September 30, ~~2022.~~2023.

Management’s remediation plans and progress. Asbestos Liability: The material weakness related to the Asbestos Liability is a result of the aggregation of the following control deficiencies: insufficient design and business process controls surrounding a new asbestos claims management database, insufficient testing of data migration from the previous asbestos claims management database to the new asbestos claims management database, and inadequate information technology (“IT”) general controls which ensure the integrity of the data and processes that the new asbestos claims management system supports. The Corporation has initiated efforts to remediate these items. It has dedicated a full-time employee to manage the accounting for asbestos claims and costs associated with the Asbestos Liability, with oversight provided by the Corporation’s Chief Financial Officer (“CFO”). The asbestos claims and costs associated with the Asbestos Liability will continue to be managed using the new third-party asbestos claims management database. The third-party service provider has engaged an independent consulting firm to provide an appropriate Service Organization Control (“SOC”) report, which will give assurance over the functioning of the third-party system and the sufficiency of its internal controls. The SOC report will be obtained and reviewed by the CFO ensuring the SOC report is appropriate, no material deficiencies exist to cause the inability to rely on the third-party system, and any additional management controls are designed and assessed for operating effectiveness. The Corporation has established limits of authority for its employees utilizing the new third-party asbestos claims management database, which provides an appropriate segregation of duties. Annually, user access to, and user rights within, the new third-party asbestos claims management database will be independently reviewed and approved.

Non-routine Transaction: The material weakness related to management review control activities was attributable to the tax accounting for a non-routine transaction in 2022. Specifically, management determined its management review control activities did not operate at a sufficient level of precision to detect errors related to the tax accounting for the non-routine transaction. The Corporation has initiated efforts to remediate this item. It has enhanced its management review control activities when assessing the propriety of the accounting for the income tax consequences of a non-routine transaction including engaging external consultants, under the Corporation’s supervision, to provide support and assist the Corporation in its evaluation of such transactions. In addition, the Corporation has enhanced its management review controls over income taxes on an interim basis to include specific activities at a more precise level to assess the impacts of non-routine transactions.

Despite management’s remediation plans and progress related to the Asbestos Liability and the non-routine transaction, the material weaknesses will not be considered remediated until the applicable controls operate for a sufficient period of time and management has concluded, through testing, these controls are operating effectively.

Changes in ~~Internal Control.~~internal control. ~~There~~Except for the remediation measures discussed above, there has been no other change in the Corporation’s internal control over financial reporting identified in connection with the evaluation required by paragraph (d) of Rules 13a-15 or 15d-15 under the Exchange Act that occurred during our last fiscal quarter that ~~has~~have materially affected, or isare reasonably likely to materially affect, its internal control over financial reporting.

2833

PART II – OTHER INFORMATION

AMPCO-PITTSBURGH CORPORATION

Item 1 Legal Proceedings

~~Item 1~~

~~Legal Proceedings~~

The information contained in Note 1516 to the condensed consolidated financial statements (Litigation) is incorporated herein by reference.

~~Item 1A~~

~~Risk Factors~~

~~There are no material changes~~Item 1A Risk Factors

In addition to the ~~Risk Factors contained~~risks set forth below and elsewhere in this Quarterly Report on Form 10-Q, you should carefully consider the “Risk Factors” included under Item 1A1A. to Part I of ~~the Corporation’s~~our Annual Report on Form 10-K for the year ended December 31, ~~2021.~~2022. You should be aware that these risk factors and other information may not describe every risk facing us. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial could adversely affect our business, financial condition and results of operations.

~~Items 2-5~~

~~None.~~

Impact on financial institutions may affect our access, or our customers’ access to, capital resources.

In the first quarter of 2023, several financial institutions failed or required outside liquidity support. The impact of this situation could place additional stress on other financial institutions, which may limit our, or our customers', access to short-term financing or result in higher interest rates. Our inability to access, or our customers' inability to access, short-term financing at competitive rates may adversely affect our liquidity, financial condition or results of operations.

We may not be able to scale our operational capacity in line with demand for our products.

Demand for our products, particularly in our Air & Liquid Processing segment, may grow at a pace that exceeds our operational capacity, including our manufacturing capabilities. We may be required to expand our facilities or contract with third parties to meet such growth, which we may not be able to do in a timely manner, if at all. If we are required to expand our facilities to meet growth in client demand, we may not have access to sufficient capital resources to expand in a timely manner, if at all. As a result, we may not be able to maximize sales growth and, therefore, could lose opportunities to produce additional revenue.

Items 2-4 None.

Item 5 Other Information

(a) None.

(b) None.

(c) During the three months ended September 30, 2023, no director or officer of the Corporation adopted or terminated a 'Rule 10b5-1 trading arrangement' or 'non-Rule 10b5-1 trading arrangement,' with each term being defined in Item 408(a) of Regulation S-K.

Item 6Exhibits

The following exhibits are filed as part of, or incorporated by reference into, this Form 10-Q.


	~~Exhibits~~


(3.1)
~~(3.1)~~	Restated Articles of Incorporation, effective as of August 11, 2017, incorporated by reference to Quarterly Report on Form 10-Q filed on November 9, 2017.

~~(3.2)~~	~~Amended and Restated By-laws, effective as of December 17, 2015, incorporated by reference to Current Report on Form 8-K filed on December 23, 2015.~~
(3.2)
~~(3.3)~~	Amendment of Amended and Restated Articles of Incorporation, effective as of May 9, 2019, incorporated by reference to Quarterly Report on Form 10-Q filed on May 10, 2019.
~~(10.1)~~
(3.3)		Amended and Restated ~~Master Lease Agreement between Union Electric Steel Corporation and Store Capital Acquisitions, LLC, dated August 30,~~By-laws, effective as of December 14, 2022, incorporated by reference to ~~Current~~Annual Report on Form ~~8-K~~10-K filed on ~~September 2, 2022.~~March 21, 2023.

~~(10.2)~~(31.1)	Amended and Restated Unconditional Guaranty of Payment and Performance between Ampco-Pittsburgh Corporation and Store Capital Acquisitions, LLC, dated August 30, 2022, incorporated by reference to Current Report on Form 8-K filed on September 2, 2022.†

~~(10.3)~~	Master Loan and Security Agreement between Union Electric Steel Corporation and Clarus Capital Funding I, LLC, dated September 29, 2022, incorporated by reference to Current Report on Form 8-K filed on October 4, 2022.

~~(10.4)~~	~~Guaranty made by Ampco-Pittsburgh Corporation to Clarus Capital Funding I, LLC, and dated September 29, 2022, incorporated by reference to Current Report on Form 8-K filed on October 4, 2022.~~

~~(31.1)~~	Certification of Principal Executive Officer pursuant to Section 302 of The Sarbanes-Oxley Act of 2002.

(31.2)	†	Certification of Principal Financial Officer pursuant to Section 302 of The Sarbanes-Oxley Act of 2002.

(32.1)	††	Certification of Principal Executive Officer pursuant to Section 906 of The Sarbanes-Oxley Act of 2002.

(32.2)	††	Certification of Principal Financial Officer pursuant to Section 906 of The Sarbanes-Oxley Act of 2002.

(101.INS)	*	Inline XBRL Instance Document ~~– the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.~~

(101.SCH)	**	Inline XBRL Taxonomy Extension Schema Document

(101.CAL)	**	Inline XBRL Taxonomy Extension Calculation Linkbase Document

(101.DEF)	**	Inline XBRL Taxonomy Extension Definition Linkbase Document

(101.LAB)	**	Inline XBRL Taxonomy Extension Label Linkbase Document

(101.PRE)	**	Inline XBRL Taxonomy Extension Presentation Linkbase Document

(104)		The cover page for the ~~Company’s~~Corporation’s Quarterly Report on Form 10-Q has been formatted in Inline XBRL and contained in Exhibit 101.
†		Filed herewith.
††		Furnished herewith.
*		The instance document does not appear in the Interactive Data File because its XBRL (Extensible Business Reporting Language) tags are embedded within the Inline XBRL document.
**		Attached as Exhibit 101 to this report are the following documents formatted in Inline XBRL: (i) the Condensed Consolidated Balance Sheets at September 30, 2023 and December 31, 2022, (ii) the Condensed Consolidated Statements of Operations for the three and nine months ended September 30, 2023 and 2022, (iii) the Condensed Consolidated Statements of Comprehensive Loss for the three and nine months ended September 30, 2023 and 2022, (iv) the Condensed Consolidated Statements of Shareholders' Equity for the three and nine months ended September 30, 2023 and 2022, (v) the Condensed Consolidated Statements of Cash Flows for the nine months ended September 30, 2023 and 2022, and (vi) Notes to Condensed Consolidated Financial Statements.

2935

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


	AMPCO-PITTSBURGH CORPORATION

DATE: November 14, ~~2022~~2023	BY:	/s/ J. Brett McBrayer
		J. Brett McBrayer
		Director and Chief Executive Officer

DATE: November 14, ~~2022~~2023	BY:	/s/ Michael G. McAuley
		Michael G. McAuley
		Senior Vice President, Chief Financial Officer and Treasurer

3036