Ampco-Pittsburgh Corporation

Good day and welcome to the AMCO Pittsburgh Corporation fourth quarter and full year 2020 earnings results conference call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one on your touchtone phone. To withdraw your question, please press star then two. Please note this event is being recorded. I would now like to turn the conference over to Melody Sprousen, Director of Investor Relations. Please go ahead.

Thank you, Carrie, and good morning to everyone joining us on today's fourth quarter and full year 2020 conference call. Joining me today are Brett McBrayer, our Chief Executive Officer, and Mike McCauley, Senior Vice President, Chief Financial Officer, and Treasurer. Also joining us on the call today are Sam Lyons, President of Union Electric Steel Corporation, and Terry Kenney, President of Air and Liquid Systems Corporation. Before we begin, I would like to remind everyone that participants on this call may make statements or comments that are forward-looking and may include financial projections or other statements of the corporation's plans, objectives, expectations, or intentions. These matters involve certain risks and uncertainties, many of which are outside of the corporation's control. The corporation's actual results may differ significantly from those projected or suggested in any forward-looking statement due to various factors, including those discussed in the corporation's most recently filed Form 10-K and subsequent filings with the Securities and Exchange Commission. We do not undertake any obligation to update or otherwise release publicly any revision to our forward-looking statements. On this call today, we are not addressing the potential proxy context. The background is set forth in the preliminary proxy statement we filed with the Security and Exchange Commission on March 12th, 2021. A replay of this call will be posted on our website later today. To access the earnings release or the webcast replay, please consult the investor section of our website at amcopgh.com. With that, I'll turn the call over to Brett McBrayer, AMCO Pittsburgh CEO. Brett.

Thank you, Melanie. Good morning and welcome to our call. While we have aggressively pursued our goal of improved shareholder return, there's been nothing more important than protecting our employees' health, safety, and well-being and protecting the environment where we operate. We are intently focused on eliminating injuries and incidents in the workplace. Identifying and correcting potential hazards before an incident occurs is everyone's responsibility in all AMCO Pittsburgh locations worldwide. With the onset of the global pandemic, we found ourselves confronted with new and unexpected threats. The response of our employees to these new challenges was and continues to be outstanding. We have successfully altered how we conduct business in our facilities and how we engage with our suppliers and customers. I'm proud of our employees' hard work to protect their teammates, themselves, and their communities where we interact and live. All of this was achieved while still honoring our commitments to our customers, which I'm very proud of. Despite the challenges we faced, our employees continued to demonstrate their dedication to continued improvement by reducing our lost workday rate by 6% in 2020 versus the prior year and our recordable injury rate by 26%. As we have in previous years, we focused on identifying and eliminating high-risk hazards that could permanently alter an employee's life. I am encouraged by our progress to date. This effort will continue to be a primary objective for our businesses in 2021. On the financial front, our businesses achieved an operating income of $6.4 million in 2020 compared to a loss of $10.9 million in 2019. This $17.4 million improvement was achieved despite the global pandemic's significant impact on our customers and their end markets. The restructuring activities and efficiency improvements the team has been engaged in over the past two years positioned us to face these challenges and deliver our first profitable year since 2015. Consequently, net income of $8 million was a $29 million improvement compared to our loss last year of $21 million. The net result for our shareholders was the achievement of an earnings per share of 56 cents in 2020 versus an earnings per share loss of $1.67 in 2019. As we ended 2020, we marked our fifth consecutive quarter of positive earnings. Through our process efficiency improvements, we delivered free cash flow from continuing operations of $33.6 million in 2020. These improvements, coupled with our successful equity raise of a little over $19 million, positioned us to reduce our total debt by approximately $44 million or 47% during 2020. Not only did we use our enhanced liquidity to improve our balance sheet, but we are now in a position to pursue our equipment upgrade initiatives, allowing us to further reduce our total cost structure, grow our top line, and meet the needs of our customers now and well into the future. Regarding 2021, we are cautiously optimistic that order activity levels will increase moving into the second half of the year as the lingering impacts of the pandemic subside. For further comments on our businesses, I'd like Terry Kinney, President of Air and Liquid Systems, and Stand Align President of Unilectric Steel to share some of the highlights in their segment's performance. Terry.