Good day and welcome to the AMCO Pittsburgh First Quarter 2026 Earnings Results Conference Call. All participants will be in a listen-only mode. Should you need assistance, please signal 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 touchstone 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 cover to Ms. Kim Knox. Ms. Knox, the floor is yours, ma'am. Thank you, Mike, and good morning to

everyone joining us on today's first quarter 2026 conference call. Joining me today are Brett McBrayer, our Chief Executive Officer, and David Anderson, Vice President, Chief Financial Officer, and President of Air and Liquid Systems Corporation. Also joining us on the call today is Sam Lyon, President of Union Electric Steel 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 the corporation's control. The corporation's actual results may differ significantly from those projected or suggested in any forward-looking statements due to various risk factors, including those discussed in the corporation's most recently filed Form 10 and in 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.

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'd like to turn the call over to Brett McBrayer, Amco Pittsburgh CEO.

Thank you, Kim. Good morning, and thank you for joining our call. As reported in our press release, consolidated adjusted EBITDA for the first quarter was $8 million, down from $8.8 million a prior year. Our results reflect ramp-up costs in Sweden, as well as a weaker mix in our forage and cast in-ger product segment. We see ongoing progress in this segment following the 2025 slowdown with trends stabilizing as the business moves through a normalization in volumes and mix. With strong demand continuing in our air and liquid processing segment, ALP achieved record-adjusted EBITDA and record customer orders for the first quarter of 2026. To elaborate further on this performance, I will now turn the call over to David Anderson, Chief Financial Officer and President of our air and liquid segment. David Anderson Thank you, Brett. Good morning.

Good morning. Tremendous start to the year for Air and Liquid as ALP set new records in customer orders and adjusted EBITDA. Q1 revenue increased 17%, driven by higher revenue in all product lines. Adjusted EBITDA in Q1 increased 52% versus prior year, as higher revenue, improved manufacturing efficiencies, and positive product mix drove adjusted EBITDA to the highest level in Air and Liquid's history. Backlog increased 23.5 million, or 19 percent in the quarter, as customer orders increased to record levels. Customer orders were 40 percent higher than any prior quarter, as we continue to see extremely strong demand for our custom-engineered products across multiple markets. Data centers are causing increasing demand in the power generation market, which is fueling demand in both our commercial pump and nuclear heat exchanger products. Our commercial pumps are used in gas turbines which are seeing strong growth while we continue to be the dominant supplier of heat exchangers into the growing nuclear market. There continues to be strong demand from the U.S. Navy and we expect this demand to continue as the Navy moves forward with fleet expansion plans. The manufacturing equipment installed in 2024 has already increased manufacturing capacity for our pump product line and there is more capacity expansion in process. Additional manufacturing equipment from the Navy funding program arrived at our facility in early 2026 and is expected to begin producing products in the second quarter of 2026. There is additional equipment from the Navy funding program that is expected to arrive at our facility in the second half of this year. This equipment will position us to meet the long-term growth in this market. Demand for custom air handlers remains strong as there continues to be significant demand in the pharmaceutical market for our custom air handling products. With rising market demand and an increasing backlog, we continue to focus on increasing our manufacturing capacity. We are bringing in new equipment, increasing our head count and improving our manufacturing efficiencies in order to meet the increasing demand. In summary, 2026 is off to a great start, and we are well positioned in markets that are showing significant long-term growth.

Thank you, David. Sam Lyon, president of Ford's and CAST engineer product segment, will now share more details regarding his group's performance.

Thank you, Brett, and good morning, everyone. For the first quarter of 2026, the forged and cast engineered product segment reported net sales of $70.8 million compared to $72.3 million in Q1 of 2025. Sales were relatively flat, with Sweden and Slovenia mostly offsetting the loss from the closure of the U.K. in our distribution business, AUP. Segment adjusted EBITDA was $5.7 million, up from $2.3 million in Q4, and down from $8.3 million in the prior year period. Three discrete timing items shaped Q1 results. First, to gain a competitive advantage with some European customers, we offer a blend of rules from our Swedish plant and our joint venture in China. Due to uneven shipments in Q1, we had a less profitable mix, which will reverse in the coming quarters. Second, our lower shipments of higher margin large roles in the U.S. negatively affected the mix. Tariff uncertainty led many of our customers to defer orders for our highest margin product in Q4 of 2025 and Q1 of 2026. And third, higher cost inventory from Q4 of 2025 flowed through the P&L. This higher cost was driven by production downtime in Q4 due to a softer order book resulting from tariff uncertainty. The forward-looking picture is much more constructive. The U.S. order book for large roles has recovered in Q2. The work rule order book is also higher in Q2 and Q3. FEP demand and margins are improved, supported by the tariff landscape. As a result of these factors, we expect the remainder of the year to be stronger. With the increased demand, the only planned outages are the yearly maintenance in the U.S. around the 4th of July and the typical summer holidays in Europe. In our last earnings call, I mentioned that two of our competitors were exiting the market. Marshall Katen, MKB, a cast rule manufacturer in Europe, is in receivership, and a competitor in South America has exited the cast rule market at the end of 2025 and is currently exiting the forage rule market. This market consolidation is presenting us with opportunities to gain market share. In summary, the underlying demand for our products is improving, supported by the tariff landscape, infrastructure growth, consolidation of rule manufacturers, and reshoring. We are also realizing improvements in our Sweden operation due to higher utilization. We are optimistic for the remainder of 2026 and 2027. Brett, back to you.

Thanks, Sam. I'll now turn the call back over to David Anderson, our Chief Financial Officer, for more detail regarding our financial performance for the quarter.

Thank you, Brett. As indicated in both our Form 10-Q and in our press release, AMCO Pittsburgh reported Q1 net sales of 108.3 million, which was an increase of 3.9% versus prior year. As discussed in the segment reports, Air and Liquid saw a significant sales increase versus prior year, while FCEP was relatively flat. Q1 adjusted EBITDA of 8 million was 0.8 million lower than prior year. The lower adjusted EBITDA was primarily driven by the temporary timing issues that Sam discussed. These issues were largely offset by the increase in adjusted EBITDA for the ALP segment. Backlog increased 5%, primarily driven by the record order activity in the ALP segment. Total selling and administrative expenses were relatively flat compared to prior year, as higher sales commissions and other costs were offset by the elimination of SG&A expenses due to the closures of the U.K. facility and the small steel distribution business in the U.S. Depreciation and amortization expense was lower by approximately $400,000 due to the closure of the U.K. facility and the steel distribution business. The change in other income and expense was primarily due to lower net pension and other post-retirement income, which is principally attributable to the U.S.-defined benefit plan reaching a fully funded status in early 2026, resulting in a change in its investment strategies to a more conservative portfolio. At March 31, 2026, the corporation's liquidity position included cash on hand of $9.2 million and undrawn availability on our revolving credit facility of $30.8 million. In summary, while there were some short-term timing issues in Q1, There were a number of positives that position us for the rest of the year, including our liquidity position, the fully funded defined benefit plan, and the positive impact from the UK plant closure in late 2025. Operator, at this time, we would now like to open the line for questions.

Hey, thank you, sir. We will now begin the question and answer session. To ask a question, you may press star, then 1 on your touchstone phone. If you're using a speakerphone, please pick up your handset before pressing the keys. If any time your question has been addressed and you'd like to withdraw your question, please press star, then 2. Again, that is star, then 1 to ask a question. At this time, we will just pause momentarily to assemble our roster. And the first question we have will come from Bruce Galloway of Galloway. Please go ahead.

Hey, guys. How you doing? It looks like it was a pretty good quarter. a few hiccups over there. A couple of questions. Number one, you know, back in March, you stated that the order book was up 38% and air and liquid was up 73%. And at the end of the quarter, you know, the numbers were a little muted from there. So maybe you could explain that. And my second question is, you know, you had a lot of adjustments and a lot of, you know, restructuring costs that that occurred in the fourth quarter and carried on into the first quarter um what's the total amount of all all that as far as EBITDA goes hi Bruce it's Dave I can address your first question

on the orders and it's a little bit of comparing two different things order book certainly up for the quarter and in what we just presented we were comparing sequentially to the fourth quarter um the press releases we had earlier in the year were comparing to prior year at the same time so a little apples and oranges there but all positive all going in a good direction okay great and your

question on adjusted EBITDA Bruce yeah yeah you said you had a lot of adjustments uh you know ramping up Sweden moving uh you know stuff to the uh the you know out of out of UK you know the pension-defined plan, you know, how much of the extraordinary expenses were there and what does

that translate to non-recurring as far as EBITDA goes? I think the biggest part is forged and cast where you can see the results at the Q1 versus prior year, and our expectation is we will be going up over those numbers. So, if that was really in the FCEP section, so I think that difference is the timing issues that we were talking about, that that's the primary difference. And that's what we see reversing out as we go into the next quarters.

But how much was that? Could you quantify? Was it $3 million in EBITDA, $2 million? Closer to $3 million. How much did it cost? Okay, closer to $3 million. So kind of like on a normalized basis, you pretty much made like $8 million for the quarter. Correct.

Yeah, and I guess for FCEP, well, we made eight. So for FCEP, it would have been closer to $11 million. No, $11 million. It would have been closer to $11 million. Correct, correct. And just a comment, Bruce, this is Sam. That timing issue between the blended shipments that we sell to European customers, that is purely timing. It'll just reverse out in the next several quarters. And the overhead that we carried into the year, that's all pretty well gone as well. And then, as I said, the outlook, particularly in North America, is quite constructive from our customers. look at any of their earnings calls, their volumes are all going up, and we're seeing that as well. So, you know, we feel like, as Brett said, we've kind of come through the trough at this point.

Okay. Also, are you getting any tariff money back?

Well, if we do, it'll go right back to our customers. Every tariff that we had to pay, we had a line item that went to them. But, yes, we should. And that's a positive, too, because the way that the tariffs are going forward, we'll probably pay about half as much as we would have paid, which is just better for borrowing and our ABL.

Okay. How much business were you doing in the U.K., and how much of that total amount switched over to Sweden?

We were doing, at the end of last year, probably $30 million or so annualized in 2025, and half of that or so would go to Sweden, half to two-thirds.

Okay. So on the revenue bar, you're not really comparing apples to apples. You have basically a discontinued operation in there, which costs you about $15 million in revenues, but obviously is helping you on the EBITDA line. Are you still on track to pick up about $9 million in savings from the closure of the U.K. facility?

We've always said $7 million to $8 million, but yes, we're still on track.

Oh, $7 million to $8 million. Okay, $7 million to $8 million. Okay, great.

Thank you, Bruce.

Okay, thank you.

The next question we have will come from John Baer of Ascend Wealth Advisors.

Good morning, all. Good morning, John. Glad you can hear me. A couple of questions here. Number one, now that you seem to have hit an inflection point, what are your thoughts on debt reduction overall? That's question one. And then I've got a couple of additionals that I'd like to –

Hi, John. It's Dave. I can answer that one on debt reduction. I mean, that is one of our primary focuses as we move towards generating positive cash flow this year. We do expect debt reduction to occur as we go through this year. That's certainly one of our focuses is improving the balance sheet on that regard.

How much can you quantify or do you have a ballpark range of what you think you might be able to accomplish on that based on, you know, your order trends overall?

I would think reasonable is $8 million to $10 million or something in the balance of this year.

Okay. And is there any potential for any kind of refinancing that might lower your overall interest? costs, or are you pretty well settled in with that?

We're pretty well settled, but we always evaluate if there's a better option somewhere. But I don't really expect that right now.

And then outside of the air and liquid products, Navy activity, and so forth, what are you seeing domestically with other aspects of the business? I know you did mention there was kind of a flattish situation with forged because of tariffs and some of the other uncertainties, and you have indicated that you seem more positive in the back half of 26.

I guess, this is Sam, the large roll orders that were suppressed in Q4 and Q1, I mean, they were down probably, on average, 35% from normal, and in the next two quarters, it's completely recovered. So that was kind of the biggest issue, and those are a little bit more capital purchase items from the customers. They have a little leeway when they buy them and when they don't buy them, and so, you know, they held off on those. And, again, we're also seeing very strong demand, particularly in Q3, on the forge side for work roles. And we're also currently in the midst of negotiation – part of the backlog issue, too, is we're currently finalizing our next year's orders with our two biggest customers as we speak. So one of them will be done in Q2 and probably one will be done in early Q3. So this period in time is a low point. If you look every year, it's kind of a low point for our backlog for FCEP as we negotiate 2027.

And is that basically just kind of their wait and see with all the uncertainties that are out there economically, perhaps, and inventory has kind of been depleted so that you are entering a more robust, hopefully a more robust ordering cycle and usage? In other words, are the steel companies' activities picking up, is that your sense, that they're picking up enough that they feel more comfortable in, you know, ordering, say, larger needs?

Well, just it's purely when demand goes down, there's a lag. So they're buying supplies, which rules as a supply for a certain level of demand. So as demand goes down, they have an inventory overhang. Well, now the opposite is occurring, so demand is going up. So they directly have to purchase more rolls. And the other thing, we did not have some business in 2026 because of the tariffs in Europe. People were nervous about buying stuff from the United States. That's all gone, and, you know, we have those orders back in the 27-order book as well. So I think for the most part, everybody's – the tariffs are all normalized. Everybody's acceptable. Everybody understands what they are now, and we're kind of back to a more normalized state.

And do you think there's some reshoring activity that's helping boost demand?

Well, in the U.S., definitely. Demand's much better on the infrastructure data centers. You know, Dave mentioned the pharmaceutical sites that are being built. All that is, you know, uses steel.

Very good. Last question. You mentioned in the prepared remarks there about two competitors exiting the market. Is that due to a softening of demand overall for them, or they just not have the volumes that could justify remaining in that market? and how easy, or maybe that's not right, how likely is it that you'll be able to pick up the market share that is being left behind by their exiting the market?

Well, in Europe, the European competitor, the Europe market was oversupplied, which is the main reason why we got out of the U.K. as well. So that's a real positive for us there. And then in the South America, which they didn't announce it publicly, so I can't say who it is, but it's a non-core business for them, and they just decided it wasn't worth managing. On the South American competitor, that we will definitely, you know, we're being called directly by customers, and we have orders that we haven't had in years because of them going out of exiting the business. And in Europe, you know, we'll compete and get our share from that as well. So, yeah, that's all very positive.

Thank you for taking the questions. Yeah, thank you.

As a reminder, if you'd like to participate in today's Q&A, please press star, then one on a touchstone phone. The next question we have will come from Justin Bergner of Gabelli Funds.

Good morning. And thank you for taking my question. The question about the exits of the competitors was just answered. But I had one more question. Any benefit from the revised Section 232 tariffs that's material for your business?

Yeah, there's a couple things, Justin. One is that CAST rules, so the rules from Sweden, those have been pretty dramatically reduced. So while the tariffs didn't affect us greatly, it puts us on a more level playing field with the U.S. competitor that we have. And we won't have to pay the tariff and foot the bill, so that's a positive. And then the tariffs on the FEP product stayed in place. That's still at 50%, which is a healthy barrier. So that's helping our FEP order book. You know, it's probably double what it was last year in the margins. are much better as well. So I think if you look at the total picture, it's kind of landed in a good spot for us, better than it was four months ago. Okay, thank you.

Thank you, Justin.

And as a final reminder, if you'd like to ask a question, please press star than one. At this time, we'll just pause momentarily. Well, it appears that we have no further questions at this time. This concludes our question and answer session. I would now like to turn the conference back over to Mr. Brett McBrayer for any closing remarks.

Thank you. In closing today, I want to thank our employees who continue to make a positive impact each and every day. With improving market conditions and the actions taken in the second half of 2025 in our foraging cash segment, We expect to recognize again an annual adjusted EBITDA improvement of $7 to $8 million moving forward. I want to thank our board of directors and our shareholders for your continued support. Thank you for joining our call this morning.

Thank you, sir, and to the rest of the management team. This concludes today's conference call. At this time, you may disconnect your lines. Thank you, take care, and have a blessed day, everyone.