10-Q 1 mar2001-10q.txt FORM 1O-Q SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 (Mark one) [X] QUARTERLY REPORT PURSUANT TO SECTION 13 or 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2001 OR [ ] 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 Incorporated in Pennsylvania. I.R.S. Employer Identification No. 25-1117717. 600 Grant Street, Pittsburgh, Pennsylvania 15219 Telephone Number 412/456-4400 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 X NO On May 14, 2001, 9,602,621 common shares were outstanding. - 1 - AMPCO-PITTSBURGH CORPORATION INDEX Page No. Part I - Financial Information: Item 1 - Consolidated Financial Statements Consolidated Balance Sheets - March 31, 2001 and December 31, 2000 3 Consolidated Statements of Operations- Three Months Ended March 31, 2001 and 2000 4 Condensed Consolidated Statements of Cash Flows - Three Months Ended March 31, 2001 and 2000 5 Notes to Consolidated Financial Statements 6 Item 2 - Management's Discussion and Analysis of Financial Condition and Results of Operations 11 Item 3 - Quantitative and Qualitative Disclosures About Market Risk 14 Part II - Other Information: Item 1 - Legal Proceedings 15 Item 6 - Exhibits and Reports on Form 8-k 15 Signatures 17 - 2 - PART I - FINANCIAL INFORMATION AMPCO-PITTSBURGH CORPORATION CONSOLIDATED BALANCE SHEETS (UNAUDITED) March 31, December 31, 2001 2000 Assets Current assets: Cash and cash equivalents $ 19,914,582 $ 17,861,531 Receivables, less allowance for doubtful accounts of $629,831 in 2001 and $626,722 in 2000 43,594,725 49,181,086 Inventories 49,774,701 48,010,609 Other 7,193,663 5,701,751 Total current assets 120,477,671 120,754,977 Property, plant and equipment, at cost: Land and land improvements 5,613,485 5,650,911 Buildings 31,555,647 31,476,129 Machinery and equipment 144,032,924 142,662,151 181,202,056 179,789,191 Accumulated depreciation 88,148,056 86,349,981 Net property, plant and equipment93,054,000 93,439,210 Prepaid pension 17,825,322 17,196,123 Other noncurrent assets 12,859,257 13,073,722 $244,216,250 $244,464,032 Liabilities and Shareholders' Equity Current liabilities: Note payable to bank $ - $ 2,000,000 Accounts payable 13,871,749 13,779,501 Accrued payrolls and employee benefits 8,593,429 8,332,985 Other 15,560,008 10,507,330 Total current liabilities 38,025,186 34,619,816 Employee benefit obligations 16,331,248 16,310,473 Industrial Revenue Bond debt 14,661,000 14,661,000 Deferred income taxes 15,504,626 15,816,670 Other noncurrent liabilities 2,925,816 579,160 Total liabilities 87,447,876 81,987,119 Shareholders' equity: Preference stock - no par value; authorized 3,000,000 shares: none issued - - Common stock - par value $1; authorized 20,000,000 shares; issued and outstanding 9,602,621 in 2001 and 2000 9,602,621 9,602,621 Additional paid-in capital 102,780,980 102,780,980 Retained earnings 48,724,443 52,385,164 Accumulated other comprehensive loss (4,339,670) (2,291,852) Total shareholders' equity 156,768,374 162,476,913 $244,216,250 $244,464,032 See Notes to Consolidated Financial Statements. - 3 - AMPCO-PITTSBURGH CORPORATION CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) Three Months Ended March 31, 2001 2000 Net sales $56,167,784 $ 60,162,324 Operating costs and expenses: Cost of products sold (excluding depreciation) 42,771,774 43,604,559 Selling and administrative 7,953,664 8,035,682 Restructuring charge 6,920,000 - Depreciation 2,084,463 2,030,711 59,729,901 53,670,952 Income (loss) from operations (3,562,117) 6,491,372 Other expense - net (389,342) (156,744) Income (loss) before income taxes (3,951,459) 6,334,628 Income tax (benefit) provision (1,251,000) 2,170,000 Net income (loss) $ (2,700,459) $ 4,164,628 Basic and diluted earnings (loss) per share $ (0.28) $ 0.43 Cash dividends declared per share $ 0.10 $ 0.10 Weighted average number of common shares outstanding 9,602,621 9,595,341 See Notes to Consolidated Financial Statements - 4 - AMPCO-PITTSBURGH CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) Three Months Ended March 31, 2001 2000 Net cash flows provided by operating activities $ 7,908,843 $ 5,883,726 Cash flows from investing activities: Purchases of property, plant and equipment (2,263,427) (3,383,134) Proceeds from sale of business - 1,272,882 Proceeds from sale of investments - 1,297,248 Net cash flows (used in) investing activities (2,263,427) (813,004) Cash flows from financing activities: Repayment of note payable to bank (2,000,000) - Proceeds from the issuance of common stock - 125,000 Dividends paid (960,064) (959,012) Net cash flows (used in) financing activities (2,960,064) (834,012) Effect of exchange rate changes on cash and cash equivalents (632,301) (162,733) Net increase in cash and cash equivalents 2,053,051 4,073,977 Cash and cash equivalents at beginning of period 17,861,531 16,322,834 Cash and cash equivalents at end of period $ 19,914,582 $ 20,396,811 Supplemental information: Income tax payments $ 349,081 $ 116,950 Interest payments $ 208,105 $ 215,514 See Notes to Consolidated Financial Statements. - 5 - AMPCO-PITTSBURGH CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 1. Unaudited Consolidated Financial Statements The consolidated balance sheet as of March 31, 2001, the consolidated statements of operations for the three months ended March 31, 2001 and 2000 and the condensed consolidated statements of cash flows for the three months ended March 31, 2001 and 2000 have been prepared by Ampco-Pittsburgh Corporation (the Corporation) without audit. In the opinion of management, all adjustments, consisting of only normal recurring adjustments, necessary to present fairly the financial position, results of operations and cash flows for the periods presented have been made. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted. These consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Corporation's annual report to shareholders for the year ended December 31, 2000. The results of operations for the period ended March 31, 2001 are not necessarily indicative of the operating results for the full year. 2. Restructuring In 2001, the Corporation undertook a review of its global roll-making capacity and in March 2001, recorded a pre-tax charge of $6,920,000 for restructuring costs associated with the permanent closure of the its forged steel roll plant in Belgium. Of the charge, approximately $3,750,000 relates to employee severance costs for approximately 60 employees, $2,120,000 for costs associated with the disposition of assets, $800,000 for the release of translation adjustments recorded within accumulated other comprehensive income (loss), and $250,000 for various other costs. As of March 31, 2001, none of the reserve had been utilized. It is estimated that the majority of these costs will be paid over the next 12 months. 3. Derivatives Certain of the Corporation's operations are subject to risk from exchange rate fluctuations in connection with regular inventory purchases in U.S. dollars and sales contracts in foreign currencies. To minimize these risks, forward foreign exchange contracts are purchased. In addition, another operation is subject to risk from changes in price of a significant raw material. To minimize this risk, future contracts are purchased. The Corporation does not enter into derivative transactions for speculative purposes and, therefore, holds no derivative instruments for trading purposes. - 6 - As of January 1, 2001, the Corporation adopted Statement of Financial Accounting Standard (SFAS) No. 133, "Accounting for Derivative Instruments and Hedging Activities", as amended. SFAS No. 133 requires each derivative instrument to be recorded in the balance sheet as either an asset or liability measured at its fair value. The accounting for changes in the fair value of a derivative will depend on the use of the derivative. To the extent that a derivative is effective as a hedge of a future exposure to changes in value, the fair value of the derivative will be deferred in other comprehensive income (loss). Any portion considered to be ineffective will be reported in earnings immediately. As of the date of adoption, the impact of SFAS No. 133 did not have a material impact on the Corporation. During the three months ended March 31, 2001, approximately $139,000 was recorded in other comprehensive income (loss). 4. Inventories At March 31, 2001 and December 31, 2000, approximately 68% and 64% respectively, of the inventories are valued on the LIFO method, with the remaining inventories being valued on the FIFO method. Inventories are comprised of the following: (in thousands) March 31, December 31, 2001 2000 Raw materials $13,016 $12,315 Work-in-process 26,084 26,422 Finished goods 5,961 4,383 Supplies 4,714 4,891 $49,775 $48,011 5. Comprehensive Income (Loss) The Corporation's comprehensive income (loss) for the three months ended March 31, 2001 and 2000 consisted of: (in thousands) Three Months Ended March 31, 2001 2000 Net (loss) income $ (2,700) $4,165 Foreign currency translation (1,656) (769) Unrealized holding losses on marketable securities (253) (129) Change in fair value of derivatives (139) - Comprehensive (loss) income $(4,748) $3,267 6. Earnings Per Share Basic earnings per share is computed by dividing net income by the weighted average number of common shares outstanding for the period. The weighted average number of common shares outstanding for the three - 7 - months ended March 31, 2001 equaled 9,602,621 shares. In February 2000, 12,500 options were exercised resulting in a weighted average number of common shares outstanding for the three months ended March 31, 2000 of 9,595,341 shares. The computation of diluted earnings per share is similar to basic earnings per share except that the denominator is increased to include the net additional common shares that would have been outstanding assuming exercise of outstanding stock options, calculated using the treasury stock method. The weighted average number of common shares outstanding assuming exercise of the stock options was 9,648,052 shares and 9,611,127 shares for the three months ended March 31, 2001 and 2000, respectively. 7. Business Segments Presented below are the net sales and income (loss) before taxes for the Corporation's three business segments. Three Months Ended March 31, 2001 2000 Net Sales: Forged and Cast Rolls $24,178 $32,380 Air and Liquid Processing 23,715 18,841 Plastics Processing Machinery 8,275 8,941 Total $56,168 $60,162 Income (Loss) before Taxes: Forged and Cast Rolls $(6,127) $3,722 Air and Liquid Processing 2,503 2,134 Plastics Processing Machinery 62 635 Total Reportable Segments (3,562) 6,491 Other expense - net (389) (156) Total $(3,951) $ 6,335 Income (loss) before taxes for the three months ended March 31, 2001 for the Forged and Cast Rolls segment includes a restructuring charge of $6,920,000. 8. Divestitures In March 2000, the Corporation sold the net assets, excluding accounts receivables, of the small roll division of The Davy Roll Company for approximately net book value. Also in March 2000, the Corporation sold the remaining discontinued operation property, which it carried as an investment, for its carrying value of approximately $1,300,000. 9. Litigation and Environmental Matters The Corporation's subsidiary, Vulcan Inc. (Vulcan), is a 50% general partner in Valley-Vulcan Mold Company (Valley), a partnership, which filed under Chapter 11 of the U.S. Bankruptcy Code in 1990. Valley, in - 8 - connection with its formation, assumed certain obligations of each of the partners, including Vulcan's obligation to pay an industrial revenue bond. A portion of the latter obligation, however, had been paid by the Corporation pursuant to a guaranty given at the time of Valley's formation, which guaranty was secured by all of Valley's assets. In 1991, the unsecured creditors committee brought an adversary proceeding against the Corporation and Vulcan, as well as others, seeking to set aside the Corporation's liens, to hold the Corporation and Vulcan liable for debts of Valley, and for return of certain funds received in connection with Valley's formation. In April 1994, the Bankruptcy Court (Court) issued a favorable judgment denying all claims against the Corporation. In addition, the Court permitted the Corporation to recover $2,200,000 from the estate of Valley in connection with the Corporation's lien for the industrial revenue bond guaranty. Subsequently, the unsecured creditors committee appealed this judgment; however, in August 1999, the Bankruptcy Appellate Panel for the Sixth Circuit (BAP) affirmed the Court's decision in favor of the Corporation. The unsecured creditors committee appealed the BAP's decision to the United States Court of Appeals for the Sixth Circuit (Court of Appeals). In February 2001, the Court of Appeals affirmed the Court's decision in favor of the Corporation. No reserve had been established for the outcome of this litigation based on the Corporation's belief that it had meritorious defenses. A bank letter of credit for the $2,200,000 received from the estate remains posted pending the outcome of the appeal. In April, 2001, Buffalo Air Handling Company (BAH) was joined as a defendant in a lawsuit previously filed by St. Jude Children's Research Hospital (Hospital) in the United States District Court for the Western District of Tennessee at No. 00-2243 M1 A against Turner Construction Company, Henningsen, Durham & Richardson, and Howden Fan Company (Howden). The litigation arises out of alleged defects in the air handling system installed at the Hospital. The Hospital is seeking $3.8 million in compensatory damages from the defendants. In addition, punitive and treble damages are being sought from certain of the defendants, including BAH, for alleged fraud, negligent misrepresentation, intentional inducement of breach of contract and civil conspiracy. Howden has asserted a separate claim against BAH for indemnification of all costs ultimately assessed against Howden pursuant to the Assets Purchase Agreement (Agreement) whereby BAH acquired the assets and business of Howden's air handling division. BAH believes it has a right to indemnification by Howden pursuant to the Agreement and has filed appropriate counterclaims. The Corporation believes that it has meritorious defenses and will vigorously defend this lawsuit; accordingly, no expense for the ultimate outcome of this case has been recorded. In addition to the litigation noted above, the Corporation is from time to time subject to routine litigation incidental to its business. The Corporation believes that the results of the above noted litigation and other pending legal proceedings will not have a material adverse effect on the financial condition, results of operations or liquidity of the Corporation. - 9 - With respect to environmental matters, the Corporation is currently performing certain remedial actions in connection with sales of real estate previously owned by discontinued operations and has been named a Potentially Responsible Party at one third-party landfill site used by a division which was previously sold. The reserves for discontinued operations include an accrual for costs of likely remedial actions. Certain of these environmental exposures are more difficult to assess and estimate for numerous reasons including lack of reliable data, the multiplicity of possible solutions and the years of remedial and monitoring activity required. While it is not possible to quantify with certainty the environmental exposure, in the opinion of management, the potential liability for all environmental matters, based on information known to date and the estimated quantities of waste at these sites, will not have a material adverse effect on the financial condition, results of operations or liquidity of the Corporation. - 10 - ITEM II - AMPCO-PITTSBURGH CORPORATION MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Operations for the Three Months Ended March 31, 2001 and 2000 In 2001, the Corporation undertook a review of its global roll-making capacity and in March 2001, recorded a pre-tax charge of $6,920,000 for restructuring costs associated with the permanent closure of the its forged steel roll plant in Belgium. Of the charge, approximately $3,750,000 relates to employee severance costs for approximately 60 employees, $2,120,000 for costs associated with the disposition of assets, $800,000 for the release of translation adjustments recorded within accumulated other comprehensive income (loss), and $250,000 for various other costs. As of March 31, 2001, none of the reserve had been utilized. It is estimated that the majority of these costs will be paid over the next 12 months. Net Sales. Net sales for the three months ended March 31, 2001 were $56,168,000, compared to $60,162,000 for the same period of 2000. A discussion of the first quarter sales for the Corporation's three segments is included below. Order backlogs improved to approximately $121,809,000 at March 31, 2001 in comparison to $115,552,000 at December 31, 2000. The increase is due to an improvement in the backlogs of the Forged and Cast Rolls and the Air and Liquid Processing segments offset by the deterioration in backlog for the Plastics Processing Machinery segment. Cost of Products Sold. The cost of products sold, excluding depreciation, equaled 76.2% and 72.5% of net sales for the three months ended March 31, 2001 and 2000, respectively. The increase is due primarily to lower production volumes for the roll operations and the heat exchange coil business resulting in an underabsorption of costs. Income (Loss) from Operations. For the three months ended March 31, 2001, the Corporation incurred a loss from operations of $3,562,000. Excluding the aforementioned restructuring charge, income from operations would have approximated $3,358,000 for the three months ended March 31, 2001, which compares to $6,491,000 for the same period of the prior year. A discussion of the first quarter results for the Corporation's three segments is included below. Forged and Cast Rolls. Sales for the Forged and Cast Rolls segment decreased for the three months ended March 31, 2001 by $8,202,000 to $24,178,000 compared to $32,380,000 for the comparable prior year period. Sales were negatively impacted by weak demand from the steel industry, an unforeseen five- week long equipment failure at one of its finishing plants and lower export sales due to the strength of the U.S. dollar and the British pound sterling. As a result of the Belgian restructuring charge of $6,920,000, operating income decreased for the three months ended March 31, 2001 by $9,849,000 to a loss of $(6,127,000). Excluding the restructuring charge, operating income would have decreased by $2,929,000 to $793,000 in comparison to $3,722,000 for the three months ended March 31, 2000. Losses from the Belgian operation, lower sales volumes and pricing pressures, as well as lower production volumes resulting in an underabsorption of costs each contributed to the poorer operating results. - 11 - Air and Liquid Processing. For the three months ended March 31, 2001, sales for the Air and Liquid Processing segment increased $4,874,000 to $23,715,000 from $18,841,000 due to an increase in pumps sales primarily to original equipment manufacturers (OEM) and to the growth of the air handling system operation. Earnings increased $369,000 to $2,503,000 for the three months ended March 31, 2001 compared to earnings of $2,134,000 for the three months ended March 31, 2000. Improved operating results for the pumps and air handling businesses offset the poorer results for the heat exchange coil business. Plastics Processing Machinery. Sales for the Plastics Processing Machinery segment for the three-month period ended March 31, 2001 decreased by $666,000 to $8,275,000 compared to $8,941,000 for the three-month period ended March 31, 2000. In addition, earnings decreased $573,000 to $62,000 from $635,000. The decrease is attributable to a decline in demand, particularly OEM business, and lower production volumes resulting in an underabsorption of costs. Other Expense - net. Other expense - net for the three months ended March 31, 2001 of $389,000 compares to $156,000 for the comparable period in 2000. The increase in expense is due primarily to losses on foreign exchange transactions. Income taxes. The effective tax rate for the three months ended March 31, 2001 approximated (31.7%), resulting from recognizing the net realizable tax benefit of the restructuring charge, in comparison to 34.3% for the comparable prior year period. Net Income. As a result of all of the above, the Corporation had a net loss for the three months of 2001 of $(2,700,000). This compares with $4,165,000 for the 2000 comparable period. Liquidity and Capital Resources Net cash flows from operating activities were positive for the three months ended March 31, 2001 at $7,909,000 in comparison to positive cash flows of $5,884,000 for the three months ended March 31, 2000. The difference in cash flows between the two periods results primarily from a reduction in accounts receivables. Net cash flows used in investing activities were $2,263,000 in 2001 compared to $813,000 in 2000. Capital expenditures for 2001 totaled $2,263,000 compared to $3,383,000 in 2000. Capital expenditures carried forward from March 31, 2001 approximate $8,951,000. Funds on-hand, funds generated by future operations and available lines of credit are expected to be sufficient to finance capital expenditure requirements. In March 2000, the Corporation sold the net assets, excluding accounts receivables, of the small roll division of Davy for approximately $1,673,000. A portion of the proceeds included a $400,000 note which was paid in September 2000 as well as an additional $100,000 on a long- term note originally deemed to have no present value. Also in March 2000, the Corporation sold the remaining discontinued operation property, which it carried as an investment, for its carrying value of approximately $1,300,000. - 12 - Net cash flows used in financing activities were $2,960,000 for 2001 and $834,000 for 2000 and include payment of quarterly dividends at a rate of $0.10 per share. In addition, the Corporation repaid in 2001, $2,000,000 of short-term borrowings which were outstanding as of December 31, 2000. In first quarter 2000, proceeds were received from the issuance of common stock under the Corporation's stock option plan. The Corporation maintains short-term lines of credit in excess of the cash needs of its businesses. The total available at March 31, 2001 was approximately $10,000,000. The Corporation's subsidiary, Vulcan Inc. (Vulcan), is a 50% general partner in Valley-Vulcan Mold Company (Valley), a partnership, which filed under Chapter 11 of the U.S. Bankruptcy Code in 1990. Valley, in connection with its formation, assumed certain obligations of each of the partners, including Vulcan's obligation to pay an industrial revenue bond. A portion of the latter obligation, however, had been paid by the Corporation pursuant to a guaranty given at the time of Valley's formation, which guaranty was secured by all of Valley's assets. In 1991, the unsecured creditors committee brought an adversary proceeding against the Corporation and Vulcan, as well as others, seeking to set aside the Corporation's liens, to hold the Corporation and Vulcan liable for debts of Valley, and for return of certain funds received in connection with Valley's formation. In April 1994, the Bankruptcy Court (Court) issued a favorable judgment denying all claims against the Corporation. In addition, the Court permitted the Corporation to recover $2,200,000 from the estate of Valley in connection with the Corporation's lien for the industrial revenue bond guaranty. Subsequently, the unsecured creditors committee appealed this judgment; however, in August 1999, the Bankruptcy Appellate Panel for the Sixth Circuit (BAP) affirmed the Court's decision in favor of the Corporation. The unsecured creditors committee appealed the BAP's decision to the United States Court of Appeals for the Sixth Circuit (Court of Appeals). In February 2001, the Court of Appeals affirmed the Court's decision in favor of the Corporation. No reserve had been established for the outcome of this litigation based on the Corporation's belief that it had meritorious defenses. A bank letter of credit for the $2,200,000 received from the estate remains posted pending the outcome of the appeal. In April, 2001, Buffalo Air Handling Company (BAH) was joined as a defendant in a lawsuit previously filed by St. Jude Children's Research Hospital (Hospital) in the United States District Court for the Western District of Tennessee at No. 00-2243 M1 A against Turner Construction Company, Henningsen, Durham & Richardson, and Howden Fan Company (Howden). The litigation arises out of alleged defects in the air handling system installed at the Hospital. The Hospital is seeking $3.8 million in compensatory damages from the defendants. In addition, punitive and treble damages are being sought from certain of the defendants, including BAH, for alleged fraud, negligent misrepresentation, intentional inducement of breach of contract and civil conspiracy. Howden has asserted a separate claim against BAH for indemnification of all costs ultimately assessed against Howden pursuant to the Assets Purchase Agreement (Agreement) whereby BAH acquired the assets and business of Howden's air handling division. BAH believes it has a right to indemnification by Howden pursuant to the Agreement and has filed appropriate counterclaims. The Corporation believes that it has meritorious defenses and will vigorously defend this lawsuit; accordingly, no expense for the ultimate outcome of this case has been recorded. - 13 - In addition to the litigation noted above, the Corporation is from time to time subject to routine litigation incidental to its business. The Corporation believes that the results of the above noted litigation and other pending legal proceedings will not have a material adverse effect on the financial condition, results of operations or liquidity of the Corporation. With respect to environmental matters, the Corporation is currently performing certain remedial actions in connection with sales of real estate previously owned by discontinued operations and has been named a Potentially Responsible Party at one third-party landfill site used by a division which was previously sold. The reserves for discontinued operations include an accrual for costs of likely remedial actions. Certain of these environmental exposures are more difficult to assess and estimate for numerous reasons including lack of reliable data, the multiplicity of possible solutions and the years of remedial and monitoring activity required. While it is not possible to quantify with certainty the environmental exposure, in the opinion of management, the potential liability for all environmental matters, based on information known to date and the estimated quantities of waste at these sites, will not have a material adverse effect on the financial condition, results of operations or liquidity of the Corporation. Conversion to the Euro The Corporation has identified issues that may result from conversion to the Euro which include primarily changes to information systems at its Belgian operation. The Corporation does not expect the conversion to the Euro will have a material impact on its financial condition, results of operations or liquidity. ITEM III - QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK There were no material changes in the Corporation's exposure to market risk from December 31, 2000. See Note 3 (Derivatives) for expanded disclosure of the market risks. - 14 - PART II - OTHER INFORMATION AMPCO-PITTSBURGH CORPORATION Item 1. Legal Proceedings In April, 2001 Buffalo Air Handling Company ("BAHC") was joined as a defendant in a lawsuit previously filed by St. Jude Children's Research Hospital (the "Hospital") in the United States District Court for the Western District of Tennessee at No. 00-2243 M1 A against Turner Construction Company, Henningsen, Durham & Richardson, and Howden Fan Company ("Howden"). The litigation arises out of alleged defects in the air handling system installed at the Hospital. The Hospital is seeking $3.8 million in compensatory damages from the defendants. In addition, punitive and treble damages are being sought from certain of the defendants, including BAHC, for alleged fraud, negligent misrepresentation, intentional inducement of breach of contract and civil conspiracy. Howden has asserted a separate claim against BAHC for indemnification of all costs ultimately assessed against Howden pursuant to the Assets Purchase Agreement ("Agreement") whereby BAHC acquired the assets and business of Howden's air handling division. BAHC believes it has a right to indemnification by Howden pursuant to the Agreement and has filed appropriate counterclaims. The Corporation believes that it has meritorious defenses and will vigorously defend this lawsuit. Items 2-5. None Item 6. Exhibits and Reports on Form 8-K (a) Exhibits 3. Articles of Incorporation and By-laws (a) Articles of Incorporation Incorporated by reference to the Quarterly Report on Form 10-Q for the quarter ended March 31, 1983; the Quarterly Report on Form 10-Q for the quarter ended March 31, 1984; the Quarterly Report on Form 10-Q for the quarter ended March 31, 1985; the Quarterly Report on Form 10-Q for the quarter ended March 31, 1987; and the Quarterly Report on Form 10-Q for the quarter ended September 30, 1998. (b) By-laws Incorporated by reference to the Quarterly Report on Form 10-Q for the quarter ended September 30, 1994 and the Quarterly Report on Form 10-Q for the quarter ended March 31, 1996. - 15 - 4. Instruments defining the rights of securities holders (a) Rights Agreement between Ampco-Pittsburgh Corporation and Chase Mellon Shareholder Services dated as of September 28, 1998. Incorporated by reference to the Form 8- K Current Report dated September 28, 1998. 10. Material Contracts (a) 1988 Supplemental Executive Retirement Plan Incorporated by reference to the Quarterly Report on Form 10-Q for the quarter ended March 31, 1996. (b) Severance Agreements between Ampco- Pittsburgh Corporation and certain officers and employees of Ampco- Pittsburgh Corporation. Incorporated by reference to the Quarterly Report on Form 10-Q for the quarter ended September 30, 1988; the Quarterly Report on Form 10-Q for the quarter ended September 30, 1994; the Annual Report on Form 10-K for fiscal year ended December 31, 1994; the Quarterly Report on Form 10-Q for the quarter ended June 30, 1997; the Annual Report on Form 10-K for the fiscal year ended December 31, 1998; and the Quarterly Report on Form 10-Q for the quarter ended June 30, 2000. (c) 1997 Stock Option Plan, as amended. Incorporated by reference to the Proxy Statements dated March 14, 1997 and March 15, 2000. (b) Reports on Form 8-K A report on Form 8-K was filed on March 8, 2001 reporting the closure of the Corporation's forged hardened steel roll finishing plant in Belgium as well as related matters. - 16 - 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: May 14, 2001 BY: s/Robert A. Paul Robert A. Paul President and Chief Executive Officer DATE: May 14, 2001 BY: s/Marliss D. Johnson Marliss D. Johnson Vice President Controller and Treasurer - 17 -