Investment Thesis
Ampco Pittsburgh is in financial distress with an unsustainable capital structure. Despite 4.3% revenue growth, the company is unprofitable with negative free cash flow and critically low interest coverage of 0.9x, indicating it cannot service its substantial debt burden from operating earnings. The combination of negative profitability, negative FCF, and high leverage (3.68x D/E) with only $31.3M equity against $115.3M debt creates imminent refinancing and solvency risks.
Strengths
- Revenue growth of 4.3% YoY demonstrates underlying market demand for industrial products
- Gross margin of 19.2% is reasonable for pumps and equipment manufacturing sector
- Current ratio of 1.75x provides adequate near-term liquidity buffer for operational needs
Risks
- Interest coverage of 0.9x is critical - company cannot cover debt service from operating income; immediate refinancing pressure
- Negative free cash flow of -$1.7M despite revenue growth indicates operational cash generation is insufficient to fund capex and debt service
- Dangerously high leverage at 3.68x debt-to-equity with minimal equity cushion ($31.3M); company is highly vulnerable to operational disruptions or market downturns
Key Metrics to Watch
- Interest coverage ratio - must improve above 1.5x to reduce solvency risk
- Free cash flow trend - negative FCF is unsustainable and must turn positive
- Operating margin improvement - currently 2.4% with negative net margins; path to profitability is essential
Financial Metrics
Revenue
108.3M
Net Income
-867.0K
EPS (Diluted)
$-0.04
Free Cash Flow
-1.7M
Total Assets
497.2M
Cash
9.2M
Profitability Ratios
Gross Margin
19.2%
Operating Margin
2.4%
Net Margin
-0.8%
ROE
-2.8%
ROA
-0.2%
FCF Margin
-1.6%
Balance Sheet & Liquidity
Current Ratio
1.75x
Quick Ratio
1.01x
Debt/Equity
3.68x
Debt/Assets
90.4%
Interest Coverage
0.94x
Long-term Debt
115.3M
Disclaimer: This analysis is generated by AI based on publicly available SEC EDGAR filings.
It does not include stock price data and should not be considered financial advice.
All fundamental data is sourced from SEC public domain filings.
Always conduct your own research before making investment decisions.
Data Source: SEC EDGAR |
Analysis Date: 2026-05-13T07:45:26.848849 |
Data as of: 2026-03-31 |
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