Good morning and welcome to the Ampco-Pittsburgh Second Quarter 2018 Earnings Results Conference Call. [Operator Instructions] Please note this event is being recorded. I would now like to turn the conference over to Melanie Sprowson. Please go ahead.

Thank you, Steven, and good morning to everyone joining us on today's second quarter conference call. I am pleased to introduce Brett McBrayer, who joins us for his first earnings call as our newly appointed Chief Executive Officer. I am also joined by Mike McAuley, Senior Vice President, Chief Financial Officer and Treasurer. 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 a variety of 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. A replay of this call will be posted on our website later today and remain available for two weeks following the conclusion of the call. To access the earnings release or the webcast replay, please consult the Investors section of our website at ampcopgh.com. Now I’d like to turn this call over to Mike, who will provide an overview of the Corporation's financial performance for the second quarter.

Thank you, Melanie. Good morning to everyone on the call today, and thank you for joining. Our earning release for the second quarter of 2018 was issued this morning and hopefully you've had a chance to read it. I will start off with giving a financial review for the quarter by taking you through the consolidated P&L, followed by providing more color at the business segment level, and then I'll review some of the key balance sheet and cash flow activity. Ampco's net sales for the second quarter of 2018 were $127.4 million. This compares to net sales for the second quarter of 2017 of $110.6 million. Net sales in the Forged and Cast Engineered Products segment increased approximately 17% compared to prior year driven by higher sales of forged and cast mill rolls, as well as forged engineered products primarily for the oil and gas industry. Net sales for the Air and Liquid Processing segment for the second quarter of 2018 increased approximately 10% from the prior year quarter. I will comment more on the segment results in just a moment. Gross profit as a percentage of net sales was 14.8% for the second quarter of 2018 versus 16.7% for the second quarter of 2017. The decrease is primarily due to higher raw material and operating costs than a year ago. Additionally, unabsorbed costs relating to the idling of a Castrol foundry that was temporarily idled beginning in the prior year quarter, further impacted costs. But these impacts were partly offset by a higher volume of shipments and improved product pricing. Selling and administrative expenses were comparable with $14.8 million for the second quarter of 2018 versus $15.1 million for the second quarter of 2017. The current year period benefited from lower employee-related costs or the prior year period…

Thank you, Mike, and good morning to everyone. Thank you for joining the call today. It's an honor and privilege to lead Ampco-Pittsburgh and I'm excited to join this organization. During my first weeks as CEO, I've focused primarily on developing a better understanding of the business. I've travelled to all Canada, North American plant locations to assess our processes and evaluate our assets. I have engaged with our leaders to understand how they're working to improve our business, what challenges they face and understand how their priorities align with those of the Corporation. I've visited with some of our key customers and walked their mills, listening what's most important to them in a supplier, what drives into partnering with us, and what we can do better to serve them. In the coming weeks, I will travel to our foreign locations continuing my facility reviews, engaging with our leaders, and meeting our customers. This time spent visiting and seeing, listening and asking questions, is helping me better understand the opportunities and challenges we have in front of us now, as well as ahead of us, and how to best execute the next steps of the strategy of the Corporation. There is no denying that we face significant challenges but I came to Ampco-Pittsburgh because I believe the opportunities outweigh those challenges. Ampco-Pittsburgh is a larger, more diversified and stronger Company than we were during the last downturn in recovery cycle. I see great potential in where Ampco-Pittsburgh is headed but I'm not satisfied with where we are today. It is quite clear that we must see an improvement in our performance. As Mike mentioned, we are also now facing new headwinds, the tariffs imposed by the U.S. on imported steel products from Canada are causing a significant negative impact on our Canadian subsidiary ASW, and it put pressure on the cost structure of our Forged Engineered Products business in the U.S. In addition, inventory adjustments in the supply chain are leading to lower frac block order intake, and operating costs continued to increase. We are mobilizing to address these issues through appropriate adjustments to our cost structure, further diversification into our Forged Engineered Products in markets, and the development of new customer partnerships. As we focus our actions on streamlining and strengthening our business, I believe Ampco-Pittsburgh will become better positioned for sustainable, profitable growth that will enable us to deliver long-term shareholder value. Thank you. We'll now take your questions.

[Operator Instructions] And our first question comes from Michael Gaugler with Janney. Please go ahead.

I guess I'll start with - at the cost line, just wondering if - what the status is - I would guess that you're looking for a waiver on the Canadian operations, and where maybe that initiative stands?

Yes, we have an application for exclusion of tariffs and that is in process as we speak. So we're obviously pursuing all the available channels that we have in front of us.

Any idea on when you will hear back on that?

Not at this time, no.

And then as we look at cost of goods sold, highest since the fourth quarter of 2016, can we expect this to decline in the back half of the year or this the new normal until you've assessed the operations and made any changes that you feel are necessary?

Yes we - as you know, we don't give earnings guidance on a forward-look basis but we know one thing, Brett, did indicate is that, we are seeing lower order intake on our Forged Engineered Products for oil and gas business, the frac block business. That's going to put pressure on our cost structure, as he indicated, for that business. It's going to cause potentially some issues, you could imagine that can cause some issues with the absorption. So there's going to be some pressure on that. And so it all depends on the mitigation steps that we're working actively right now, to look at cost reductions and look at other opportunities to fill that gap.

[Operator Instructions] I'm showing no further questions. This concludes our question-and-answer session. I'd like to turn the conference back over to Brett McBrayer, for any closing remarks.

Yes, I'd just like to thank everyone for their time today. Look forward to updating everyone on our progress during the next call. Thank you.

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.