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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-Q
(Mark One)
| | | | | |
| ☑ | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended June 30, 2025
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: 000-03134
Park-Ohio Holdings Corp.
(Exact name of registrant as specified in its charter)
| | | | | | | | | | | | | | |
| Ohio | | 34-1867219 |
| (State or other jurisdiction of incorporation or organization) | | (I.R.S. Employer Identification No.) |
| | | |
| 6065 Parkland Boulevard, | Cleveland, | Ohio | | 44124 |
| (Address of principal executive offices) | | (Zip Code) |
(440) 947-2000
(Registrant’s telephone number, including area code)
Not applicable
(Former name, former address and former fiscal year, if changed since last report)
Securities registered pursuant to Section 12(b) of the Act:
| | | | | | | | |
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered |
| Common Stock, Par Value $1.00 Per Share | PKOH | The NASDAQ Stock Market LLC |
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 twelve months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days. ☑ Yes ☐ No
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). ☑ Yes ☐ No
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
| | | | | | | | | | | | | | |
| Large accelerated filer | ☐ | | Accelerated filer | ☑ |
| Non-accelerated filer | ☐ | | Smaller reporting company | ☐ |
| | | Emerging growth company | ☐ |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accountings standards provided pursuant to Section 13(a) of the Exchange Act. ☐ |
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). ☐ Yes ☑ No
Number of shares outstanding of registrant’s Common Stock, par value $1.00 per share, as of July 31, 2025: 14,395,192 shares.
Park-Ohio Holdings Corp. and Subsidiaries
Index
| | | | | | | | |
| | Page |
| Part I. Financial Information | |
| | |
| Item 1. | Condensed Consolidated Financial Statements | 4 |
| | |
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| | |
| | |
| | |
| Notes to Condensed Consolidated Financial Statements (Unaudited) — June 30, 2025 | 11 |
| Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations | 22 |
| Item 3. | Quantitative and Qualitative Disclosure About Market Risk | 33 |
| Item 4. | Controls and Procedures | 33 |
| | |
| Part II. Other Information | |
| | |
| Item 1. | Legal Proceedings | 35 |
| Item 1A. | Risk Factors | 35 |
| Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds | 36 |
| Item 5. | Other Information | 37 |
| Item 6. | Exhibits | 38 |
Signatures | 39 |
| | |
| | |
| | |
| | |
| | |
| | |
Part I. Financial Information
| | | | | |
| Item 1. | Condensed Consolidated Financial Statements |
Park-Ohio Holdings Corp. and Subsidiaries
Condensed Consolidated Balance Sheets
| | | | | | | | | | | |
| (Unaudited) | | |
| June 30,
2025 | | December 31,
2024 |
| (In millions) |
| ASSETS |
| Current assets: | | | |
| Cash and cash equivalents | $ | 45.6 | | | $ | 53.1 | |
| | | |
| Accounts receivable, net | 282.5 | | | 249.5 | |
| Inventories, net | 425.9 | | | 422.9 | |
| | | |
| | | |
| Other current assets | 119.8 | | | 110.5 | |
| | | |
| Total current assets | 873.8 | | | 836.0 | |
| Property, plant and equipment, net | 190.3 | | | 182.9 | |
| Operating lease right-of-use assets | 43.7 | | | 40.3 | |
| Goodwill | 116.0 | | | 111.7 | |
| Intangible assets, net | 72.6 | | | 71.9 | |
| | | |
| Other long-term assets | 125.3 | | | 122.3 | |
| Total assets | $ | 1,421.7 | | | $ | 1,365.1 | |
| LIABILITIES AND SHAREHOLDERS' EQUITY |
| Current liabilities: | | | |
| Trade accounts payable | $ | 196.8 | | | $ | 194.8 | |
| Current portion of long-term debt and short-term debt | 8.7 | | | 8.4 | |
| Current portion of operating lease liabilities | 11.1 | | | 10.7 | |
| Accrued expenses and other | 119.6 | | | 147.2 | |
| | | |
| Total current liabilities | 336.2 | | | 361.1 | |
| Long-term liabilities, less current portion: | | | |
| Long-term debt | 656.7 | | | 618.3 | |
| Long-term operating lease liabilities | 32.8 | | | 29.8 | |
| | | |
| Other long-term liabilities | 19.7 | | | 18.8 | |
| Total long-term liabilities | 709.2 | | | 666.9 | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| Park-Ohio Holdings Corp. and Subsidiaries shareholders' equity | 371.1 | | | 330.8 | |
| Noncontrolling interests | 5.2 | | | 6.3 | |
| Total equity | 376.3 | | | 337.1 | |
| Total liabilities and shareholders' equity | $ | 1,421.7 | | | $ | 1,365.1 | |
Refer to the accompanying notes to these unaudited condensed consolidated financial statements.
Park-Ohio Holdings Corp. and Subsidiaries
Condensed Consolidated Statements of Income (Unaudited)
| | | | | | | | | | | | | | | | | | | | | | | |
| Three Months Ended June 30, | | Six Months Ended June 30, |
| | 2025 | | 2024 | | 2025 | | 2024 |
| | (In millions, except per share data) |
| Net sales | $ | 400.1 | | | $ | 432.6 | | | $ | 805.5 | | | $ | 850.2 | |
| Cost of sales | 331.9 | | | 359.4 | | | 669.2 | | | 705.6 | |
| | | | | | | |
| Selling, general and administrative expenses | 46.8 | | | 47.4 | | | 95.0 | | | 94.5 | |
| Restructuring and other special charges | 1.3 | | | 1.2 | | | 2.3 | | | 1.5 | |
| | | | | | | |
| | | | | | | |
| Operating income | 20.1 | | | 24.6 | | | 39.0 | | | 48.6 | |
| Other components of pension and other postretirement benefits income, net | 1.8 | | | 1.4 | | | 3.6 | | | 2.7 | |
| Interest expense, net | (11.2) | | | (12.0) | | | (22.2) | | | (23.9) | |
| | | | | | | |
| Income from continuing operations before income taxes | 10.7 | | | 14.0 | | | 20.4 | | | 27.4 | |
| Income tax expense | (1.8) | | | (2.6) | | | (3.7) | | | (5.9) | |
| Income from continuing operations | 8.9 | | | 11.4 | | | 16.7 | | | 21.5 | |
| Loss attributable to noncontrolling interests | 0.4 | | | 0.9 | | | 1.1 | | | 1.4 | |
| Income from continuing operations attributable to Park-Ohio Holdings Corp. common shareholders | 9.3 | | | 12.3 | | | 17.8 | | | 22.9 | |
| Loss from discontinued operations, net of tax | (0.1) | | | (0.4) | | | (0.3) | | | (1.4) | |
| Net income attributable to Park-Ohio Holdings Corp. common shareholders | $ | 9.2 | | | $ | 11.9 | | | $ | 17.5 | | | $ | 21.5 | |
| | | | | | | |
| Earnings (loss) per common share attributable to Park-Ohio Holdings Corp. common shareholders: | | | | | | | |
| Basic: | | | | | | | |
| Continuing operations | $ | 0.68 | | | $ | 0.98 | | | $ | 1.30 | | | $ | 1.85 | |
| Discontinued operations | $ | (0.01) | | | $ | (0.03) | | | (0.02) | | | (0.11) | |
| Total | $ | 0.67 | | | $ | 0.95 | | | $ | 1.28 | | | $ | 1.74 | |
| Diluted: | | | | | | | |
| Continuing operations | $ | 0.67 | | | $ | 0.95 | | | $ | 1.28 | | | $ | 1.79 | |
| Discontinued operations | $ | (0.01) | | | $ | (0.03) | | | (0.02) | | | (0.11) | |
| Total | $ | 0.66 | | | $ | 0.92 | | | $ | 1.26 | | | $ | 1.68 | |
Refer to the accompanying notes to these unaudited condensed consolidated financial statements.
Park-Ohio Holdings Corp. and Subsidiaries
Condensed Consolidated Statements of Comprehensive Income (Unaudited)
| | | | | | | | | | | | | | | | | | | | | | | |
| Three Months Ended June 30, | | Six Months Ended June 30, |
| | 2025 | | 2024 | | 2025 | | 2024 |
| | (In millions) |
| Net income attributable to Park-Ohio Holdings Corp. common shareholders before noncontrolling interest | $ | 8.8 | | | $ | 11.0 | | | $ | 16.4 | | | $ | 20.1 | |
| Other comprehensive income (loss), net of tax: | | | | | | | |
| Currency translation | 13.3 | | | (3.1) | | | 22.7 | | | (4.9) | |
| Foreign currency forward contracts | 1.4 | | | (1.1) | | | 2.2 | | | (1.1) | |
| | | | | | | |
| Pension and other postretirement benefits | 0.1 | | | 0.4 | | | 0.3 | | | 0.9 | |
| Total other comprehensive income (loss) | 14.8 | | | (3.8) | | | 25.2 | | | (5.1) | |
| Total comprehensive income, net of tax | 23.6 | | | 7.2 | | | 41.6 | | | 15.0 | |
| Comprehensive loss attributable to noncontrolling interests | 0.4 | | | 0.9 | | | 1.1 | | | 1.4 | |
| Comprehensive income attributable to Park-Ohio Holdings Corp. common shareholders | $ | 24.0 | | | $ | 8.1 | | | $ | 42.7 | | | $ | 16.4 | |
Refer to the accompanying notes to these unaudited condensed consolidated financial statements.
Park-Ohio Holdings Corp. and Subsidiaries
Condensed Consolidated Statements of Shareholders' Equity (Unaudited)
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Common Stock | | | | | | | | | | | | |
| Shares | | Amount | | Additional
Paid-In
Capital | | Retained
Earnings | | Treasury Stock | | Accumulated
Other
Comprehensive Loss | | Noncontrolling Interests | | Total |
| | (In whole shares) | | (In millions) |
| Balance at January 1, 2025 | 18,292,490 | | | $ | 18.3 | | | $ | 190.6 | | | $ | 265.2 | | | $ | (91.5) | | | $ | (51.8) | | | $ | 6.3 | | | $ | 337.1 | |
Other comprehensive
income (loss) | — | | | — | | | — | | | 8.3 | | | — | | | 10.4 | | | (0.7) | | | 18.0 | |
| Stock-based compensation expense | — | | | — | | | 1.5 | | | — | | | — | | | — | | | — | | | 1.5 | |
| Stock-based compensation activity | (1,390) | | | — | | | — | | | — | | | — | | | — | | | — | | | — | |
| Dividends | — | | | — | | | — | | | (1.8) | | | — | | | — | | | — | | | (1.8) | |
| | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
| Balance at March 31, 2025 | 18,291,100 | | | 18.3 | | | 192.1 | | | 271.7 | | | (91.5) | | | (41.4) | | | 5.6 | | | 354.8 | |
| Other comprehensive income (loss) | — | | | — | | | — | | | 9.2 | | | — | | | 14.8 | | | (0.4) | | | 23.6 | |
| Stock-based compensation expense | — | | | — | | | 1.3 | | | — | | | — | | | — | | | — | | | 1.3 | |
| Stock-based compensation activity | 31,586 | | | — | | | — | | | — | | | — | | | — | | | — | | | — | |
| | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
| Dividends | — | | | — | | | — | | | (1.8) | | | — | | | — | | | — | | | (1.8) | |
Payments of withholding taxes on share awards
| — | | | — | | | — | | | — | | | (1.6) | | | — | | | — | | | (1.6) | |
| Balance at June 30, 2025 | 18,322,686 | | | $ | 18.3 | | | $ | 193.4 | | | $ | 279.1 | | | $ | (93.1) | | | $ | (26.6) | | | $ | 5.2 | | | $ | 376.3 | |
| | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Common Stock | | | | | | | | | | | | |
| Shares | | Amount | | Additional
Paid-In
Capital | | Retained
Earnings | | Treasury Stock | | Accumulated
Other
Comprehensive Loss | | Noncontrolling Interests | | Total |
| | (In whole shares) | | (In millions) |
| Balance at January 1, 2024 | 17,029,938 | | | $ | 17.0 | | | $ | 155.9 | | | $ | 240.1 | | | $ | (88.9) | | | $ | (43.7) | | | $ | 9.5 | | | $ | 289.9 | |
Other comprehensive
income (loss) | — | | | — | | | — | | | 9.6 | | | — | | | (1.3) | | | (0.5) | | | 7.8 | |
| Stock-based compensation expense | — | | | — | | | 1.5 | | | — | | | — | | | — | | | — | | | 1.5 | |
| Stock-based compensation activity | 3,065 | | | — | | | — | | | — | | | — | | | — | | | — | | | — | |
| Dividends | — | | | — | | | — | | | (1.6) | | | — | | | — | | | — | | | (1.6) | |
| | | | | | | | | | | | | | | |
Payments of withholding taxes on share awards
| — | | | — | | | — | | | — | | | (0.1) | | | — | | | — | | | (0.1) | |
| | | | | | | | | | | | | | | |
| Balance at March 31, 2024 | 17,033,003 | | | 17.0 | | | 157.4 | | | 248.1 | | | (89.0) | | | (45.0) | | | 9.0 | | | 297.5 | |
| Other comprehensive income (loss) | — | | | — | | | — | | | 11.9 | | | — | | | (3.8) | | | (0.9) | | | 7.2 | |
| Stock-based compensation expense | — | | | — | | | 1.2 | | | — | | | — | | | — | | | — | | | 1.2 | |
| Stock-based compensation activity | 132,012 | | | 0.2 | | | (0.2) | | | — | | | — | | | — | | | — | | | — | |
| | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
| Dividends | — | | | — | | | — | | | (1.7) | | | — | | | — | | | — | | | (1.7) | |
Payments of withholding taxes on share awards
| — | | | — | | | — | | | — | | | (2.3) | | | — | | | — | | | (2.3) | |
| Balance at June 30, 2024 | 17,165,015 | | | $ | 17.2 | | | $ | 158.4 | | | $ | 258.3 | | | $ | (91.3) | | | $ | (48.8) | | | $ | 8.1 | | | $ | 301.9 | |
| | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | |
| Three Months Ended June 30, | | Six Months Ended June 30, |
| | 2025 | | 2024 | | 2025 | | 2024 |
| Dividends per common share | $ | 0.125 | | | $ | 0.125 | | | $ | 0.250 | | | $ | 0.250 | |
Refer to the accompanying notes to these unaudited condensed consolidated financial statements.
Park-Ohio Holdings Corp. and Subsidiaries
Condensed Consolidated Statements of Cash Flows (Unaudited)
| | | | | | | | | | | |
| | Six Months Ended June 30, |
| | 2025 | | 2024 |
| | (In millions) |
| OPERATING ACTIVITIES FROM CONTINUING OPERATIONS | | | |
| Income from continuing operations | $ | 16.7 | | | $ | 21.5 | |
| Adjustments to reconcile income from continuing operations to net cash used in operating activities from continuing operations: | | | |
| Depreciation and amortization | 16.5 | | | 16.7 | |
| | | |
| Stock-based compensation expense | 2.8 | | | 2.7 | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| Changes in operating assets and liabilities: | | | |
| Accounts receivable | (23.5) | | | (10.1) | |
| Inventories | 3.2 | | | (11.3) | |
| Prepaid and other current assets | (6.6) | | | (1.4) | |
| Accounts payable and accrued expenses | (34.0) | | | (13.4) | |
| | | |
| | | |
| Other | 1.2 | | | (5.1) | |
| Net cash used in operating activities from continuing operations | (23.7) | | | (0.4) | |
| INVESTING ACTIVITIES FROM CONTINUING OPERATIONS | | | |
| Purchases of property, plant and equipment | (16.9) | | | (13.2) | |
| | | |
| | | |
| Business acquisitions, net of cash acquired | — | | | (11.0) | |
| Net cash used in investing activities from continuing operations | (16.9) | | | (24.2) | |
| FINANCING ACTIVITIES FROM CONTINUING OPERATIONS | | | |
| Proceeds from revolving credit facility, net | 38.9 | | | 38.2 | |
| | | |
| Payments on other debt | (1.7) | | | (3.1) | |
| Proceeds from other debt | 1.4 | | | 8.5 | |
| Payments on finance lease facilities, net | (1.9) | | | (1.8) | |
| | | |
| | | |
| | | |
| | | |
| | | |
| Payments related to prior acquisitions | — | | | (0.8) | |
| Dividends | (3.6) | | | (3.3) | |
| | | |
| Payments of withholding taxes on share awards | (1.6) | | | (2.4) | |
| | | |
| | | |
| Net cash provided by financing activities from continuing operations | 31.5 | | | 35.3 | |
| DISCONTINUED OPERATIONS: | | | |
| Total used by operating activities | (0.3) | | | (4.1) | |
| | | |
| | | |
| Decrease in cash and cash equivalents from discontinued operations | (0.3) | | | (4.1) | |
| Effect of exchange rate changes on cash | 1.9 | | | (1.5) | |
| (Decrease) increase in cash and cash equivalents | (7.5) | | | 5.1 | |
| Cash and cash equivalents at beginning of period | 53.1 | | | 54.8 | |
| Cash and cash equivalents at end of period | $ | 45.6 | | | $ | 59.9 | |
| Interest paid | $ | 22.3 | | | $ | 23.3 | |
| Income taxes paid | $ | 13.3 | | | $ | 5.7 | |
| | | |
| | | |
Refer to the accompanying notes to these unaudited condensed consolidated financial statements.
Park-Ohio Holdings Corp. and Subsidiaries
Notes to Condensed Consolidated Financial Statements (Unaudited)
June 30, 2025
NOTE 1 — Basis of Presentation
The condensed consolidated financial statements include the accounts of Park-Ohio Holdings Corp. and its subsidiaries (collectively, “we,” “our” or the “Company”). All intercompany accounts and transactions have been eliminated in consolidation.
The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles in the United States (“U.S. GAAP”) for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the three- and six-month periods ended June 30, 2025 are not necessarily indicative of the results that may be expected for the year ending December 31, 2025. The balance sheet at December 31, 2024 has been derived from the audited financial statements at that date but does not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. For further information, refer to the consolidated financial statements and footnotes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024.
The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.
NOTE 2 — New Accounting Pronouncements
In December 2023, the FASB issued ASU No. 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures. This guidance requires additional annual disclosures for income taxes. This guidance will not affect the recognition, measurement or financial statement presentation. The amendments are effective for fiscal years beginning after December 15, 2024. We are in the process of evaluating the impact of adopting this guidance on our consolidated financial statement disclosures.
In November 2024, the FASB issued ASU No. 2024-03, Income Statement-Reporting Comprehensive Income-Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses. This guidance requires tabular footnote disclosure of certain operating expenses disaggregated into categories, such as employee compensation, depreciation, and intangible asset amortization, included within each interim and annual income statement’s expense caption, as applicable. The effective date of this guidance is for fiscal years beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027. We are in the process of evaluating the impact of adopting this guidance on our consolidated financial statement disclosures.
No other recently-issued accounting standard updates are expected to have a material impact on our results of operations, financial condition or liquidity.
NOTE 3 — Revenue
We disaggregate our revenue by product line and geographic region of our customers as we believe these metrics best depict how the nature, amount, timing and uncertainty of our revenues and cash flows are affected by economic factors. See details in the tables below.
Table of Contents
Park-Ohio Holdings Corp. and Subsidiaries
Notes to Condensed Consolidated Financial Statements (Unaudited)
June 30, 2025
| | | | | | | | | | | | | | | | | | | | | | | |
| Three Months Ended June 30, | | Six Months Ended June 30, |
| 2025 | | 2024 | | 2025 | | 2024 |
| (In millions) |
| PRODUCT LINE | | | | | | | |
| Supply technologies | $ | 161.3 | | | $ | 173.8 | | | $ | 322.4 | | | $ | 341.4 | |
| Engineered specialty fasteners and other products | 25.8 | | | 28.8 | | | 52.5 | | | 58.1 | |
| Supply Technologies Segment | 187.1 | | | 202.6 | | | 374.9 | | | 399.5 | |
| | | | | | | |
| Fuel, rubber and plastic products | 95.1 | | | 103.1 | | | 192.0 | | | 210.3 | |
| | | | | | | |
| Assembly Components Segment | 95.1 | | | 103.1 | | | 192.0 | | | 210.3 | |
| | | | | | | |
| Industrial equipment | 92.1 | | | 93.8 | | | 182.1 | | | 173.2 | |
| Forged and machined products | 25.8 | | | 33.1 | | | 56.5 | | | 67.2 | |
| Engineered Products Segment | 117.9 | | | 126.9 | | | 238.6 | | | 240.4 | |
| | | | | | | |
| Total revenues | $ | 400.1 | | | $ | 432.6 | | | $ | 805.5 | | | $ | 850.2 | |
| | | | | | | | | | | | | | | | | | | | | | | |
| Supply Technologies Segment | | Assembly Components Segment | | Engineered Products Segment | | Total Revenues |
| (In millions) |
| Three Months Ended June 30, 2025 | | | | | | | |
| GEOGRAPHIC REGION | | | | | | | |
| United States | $ | 104.4 | | | $ | 60.0 | | | $ | 75.2 | | | $ | 239.6 | |
| Europe | 41.1 | | | 3.9 | | | 15.9 | | | 60.9 | |
| Asia | 18.8 | | | 8.2 | | | 16.5 | | | 43.5 | |
| Mexico | 18.3 | | | 14.0 | | | 4.5 | | | 36.8 | |
| Canada | 2.9 | | | 7.9 | | | 5.4 | | | 16.2 | |
| Other | 1.6 | | | 1.1 | | | 0.4 | | | 3.1 | |
| Total | $ | 187.1 | | | $ | 95.1 | | | $ | 117.9 | | | $ | 400.1 | |
| | | | | | | |
| Three Months Ended June 30, 2024 | | | | | | | |
| GEOGRAPHIC REGION | | | | | | | |
| United States | $ | 119.5 | | | $ | 68.6 | | | $ | 70.2 | | | $ | 258.3 | |
| Europe | 39.8 | | | 4.2 | | | 21.2 | | | 65.2 | |
| Asia | 19.6 | | | 8.0 | | | 20.3 | | | 47.9 | |
| Mexico | 19.5 | | | 13.2 | | | 5.8 | | | 38.5 | |
| Canada | 4.0 | | | 8.0 | | | 5.4 | | | 17.4 | |
| Other | 0.2 | | | 1.1 | | | 4.0 | | | 5.3 | |
| Total | $ | 202.6 | | | $ | 103.1 | | | $ | 126.9 | | | $ | 432.6 | |
Table of Contents
Park-Ohio Holdings Corp. and Subsidiaries
Notes to Condensed Consolidated Financial Statements (Unaudited)
June 30, 2025
| | | | | | | | | | | | | | | | | | | | | | | |
| Supply Technologies Segment | | Assembly Components Segment | | Engineered Products Segment | | Total Revenues |
| (In millions) |
| Six Months Ended June 30, 2025 | | | | | | | |
| GEOGRAPHIC REGION | | | | | | | |
| United States | $ | 213.0 | | | $ | 120.1 | | | $ | 142.4 | | | $ | 475.5 | |
| Europe | 81.5 | | | 8.3 | | | 30.8 | | | 120.6 | |
| Asia | 36.5 | | | 16.6 | | | 36.7 | | | 89.8 | |
| Mexico | 35.8 | | | 29.1 | | | 10.0 | | | 74.9 | |
| Canada | 6.0 | | | 15.7 | | | 14.6 | | | 36.3 | |
| Other | 2.1 | | | 2.2 | | | 4.1 | | | 8.4 | |
| Total | $ | 374.9 | | | $ | 192.0 | | | $ | 238.6 | | | $ | 805.5 | |
| | | | | | | |
| Six Months Ended June 30, 2024 | | | | | | | |
| GEOGRAPHIC REGION | | | | | | | |
| United States | $ | 233.0 | | | $ | 140.1 | | | $ | 133.9 | | | $ | 507.0 | |
| Europe | 78.8 | | | 8.7 | | | 40.1 | | | 127.6 | |
| Asia | 40.3 | | | 16.5 | | | 35.2 | | | 92.0 | |
| Mexico | 38.9 | | | 26.9 | | | 9.5 | | | 75.3 | |
| Canada | 7.8 | | | 15.9 | | | 13.2 | | | 36.9 | |
| Other | 0.7 | | | 2.2 | | | 8.5 | | | 11.4 | |
| Total | $ | 399.5 | | | $ | 210.3 | | | $ | 240.4 | | | $ | 850.2 | |
For over time arrangements, contract assets primarily relate to revenue recognized in advance of billings to customers under long-term contracts accounted for under percentage of completion. These amounts, which totaled $50.6 million and $45.3 million at June 30, 2025 and December 31, 2024, respectively, are recorded in Other current assets in the Condensed Consolidated Balance Sheets.
For over time arrangements, contract liabilities primarily relate to advances or deposits received from the Company’s customers before revenue is recognized. These amounts, which totaled $43.4 million and $53.1 million at June 30, 2025 and December 31, 2024, respectively, are recorded in Accrued expenses and other in the Condensed Consolidated Balance Sheets.
NOTE 4 — Segments
The Company operates three reportable segments: Supply Technologies, Assembly Components and Engineered Products. The chief operating decision maker is the Company's Chief Executive Officer. For purposes of measuring business segment performance, the chief operating decision maker utilizes segment operating income, which is defined as revenues less expenses identifiable to the product lines within each segment. The Company does not allocate items that are non-operating; unusual in nature; or corporate costs, which include but are not limited to executive compensation and corporate office costs. Segment operating income reconciles to consolidated income before income taxes by adjusting for corporate costs; other components of pension and other postretirement benefits income, net; and interest expense, net.
Results by business segment were as follows:
Table of Contents
Park-Ohio Holdings Corp. and Subsidiaries
Notes to Condensed Consolidated Financial Statements (Unaudited)
June 30, 2025
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Supply Technologies | | Assembly Components | | Engineered Products | | Corporate | | Total |
| (In millions) |
| Three Months Ended June 30, 2025 |
| Net sales | $ | 187.1 | | | $ | 95.1 | | | $ | 117.9 | | | $ | — | | | $ | 400.1 | |
| Cost of sales | 154.3 | | | 84.2 | | | 93.4 | | | — | | | 331.9 | |
| Gross profit | 32.8 | | | 10.9 | | | 24.5 | | | — | | | 68.2 | |
| Selling, general and administrative expenses | 16.1 | | | 4.8 | | | 18.1 | | | 7.8 | | | 46.8 | |
| Restructuring and other special charges | 0.4 | | | 0.5 | | | 0.4 | | | — | | | 1.3 | |
| Operating income | 16.3 | | | 5.6 | | | 6.0 | | | (7.8) | | | 20.1 | |
| Other components of pension and other postretirement benefits income, net | | | | | | | | | 1.8 | |
| | | | | | | | | |
| Interest expense, net | | | | | | | | | (11.2) | |
| Income from continuing operations before income taxes | | | | | | | | | $ | 10.7 | |
| | | | | | | | | |
| Three Months Ended June 30, 2024 |
| Net sales | $ | 202.6 | | | $ | 103.1 | | | $ | 126.9 | | | $ | — | | | $ | 432.6 | |
| Cost of sales | 165.3 | | | 92.4 | | | 101.7 | | | — | | | 359.4 | |
| Gross profit | 37.3 | | | 10.7 | | | 25.2 | | | — | | | 73.2 | |
| Selling, general and administrative expenses | 18.1 | | | 3.8 | | | 17.9 | | | 7.6 | | | 47.4 | |
| Restructuring and other special charges | 0.2 | | | — | | | 1.0 | | | — | | | 1.2 | |
| Operating income | 19.0 | | | 6.9 | | | 6.3 | | | (7.6) | | | 24.6 | |
| Other components of pension and other postretirement benefits income, net | | | | | | | | | 1.4 | |
| | | | | | | | | |
| Interest expense, net | | | | | | | | | (12.0) | |
| Income from continuing operations before income taxes | | | | | | | | | $ | 14.0 | |
Table of Contents
Park-Ohio Holdings Corp. and Subsidiaries
Notes to Condensed Consolidated Financial Statements (Unaudited)
June 30, 2025
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Supply Technologies | | Assembly Components | | Engineered Products | | Corporate | | Total |
| (In millions) |
| Six Months Ended June 30, 2025 |
| Net sales | $ | 374.9 | | | $ | 192.0 | | | $ | 238.6 | | | $ | — | | | $ | 805.5 | |
| Cost of sales | 307.5 | | | 169.9 | | | 191.8 | | | — | | | 669.2 | |
| Gross profit | 67.4 | | | 22.1 | | | 46.8 | | | — | | | 136.3 | |
| Selling, general and administrative expenses | 32.9 | | | 10.5 | | | 35.8 | | | 15.8 | | | 95.0 | |
| Restructuring, acquisition-related and other special charges | 0.4 | | | 0.7 | | | 1.2 | | | — | | | 2.3 | |
| Operating income | 34.1 | | | 10.9 | | | 9.8 | | | (15.8) | | | 39.0 | |
| Other components of pension and other postretirement benefits income, net | | | | | | | | | 3.6 | |
| | | | | | | | | |
| Interest expense, net | | | | | | | | | (22.2) | |
| Income from continuing operations before income taxes | | | | | | | | | $ | 20.4 | |
| | | | | | | | | |
| Six Months Ended June 30, 2024 |
| Net sales | $ | 399.5 | | | $ | 210.3 | | | $ | 240.4 | | | $ | — | | | $ | 850.2 | |
| Cost of sales | 326.4 | | | 185.9 | | | 193.3 | | | — | | | 705.6 | |
| Gross profit | 73.1 | | | 24.4 | | | 47.1 | | | — | | | 144.6 | |
| Selling, general and administrative expenses | 34.4 | | | 8.9 | | | 36.0 | | | 15.2 | | | 94.5 | |
| Restructuring, acquisition-related and other special charges | 0.2 | | | — | | | 1.3 | | | — | | | 1.5 | |
| Operating income | 38.5 | | | 15.5 | | | 9.8 | | | (15.2) | | | 48.6 | |
| Other components of pension and other postretirement benefits income, net | | | | | | | | | 2.7 | |
| Interest expense, net | | | | | | | | | (23.9) | |
| Gains on sales of assets | | | | | | | | | — | |
| Income from continuing operations before income taxes | | | | | | | | | $ | 27.4 | |
Table of Contents
Park-Ohio Holdings Corp. and Subsidiaries
Notes to Condensed Consolidated Financial Statements (Unaudited)
June 30, 2025
| | | | | | | | | | | | | | | | | | | | | | | |
| Three Months Ended June 30, | | Six Months Ended June 30, |
| 2025 | | 2024 | | 2025 | | 2024 |
| | | |
| Capital expenditures: | | | | | | | |
| Supply Technologies | $ | 3.1 | | | $ | 3.2 | | | $ | 7.8 | | | $ | 4.5 | |
| Assembly Components | 1.5 | | | 1.5 | | | 2.9 | | | 3.3 | |
| Engineered Products | 2.7 | | | 2.1 | | | 5.8 | | | 4.1 | |
| Corporate | 0.1 | | | 0.6 | | | 0.4 | | | 1.3 | |
| $ | 7.4 | | | $ | 7.4 | | | $ | 16.9 | | | $ | 13.2 | |
| Depreciation and amortization expense: | | | | | | | |
| Supply Technologies | $ | 1.7 | | | $ | 1.7 | | | $ | 3.3 | | | $ | 3.4 | |
| Assembly Components | 3.2 | | | 3.5 | | | 6.6 | | | 6.9 | |
| Engineered Products | 3.3 | | | 3.1 | | | 6.4 | | | 6.3 | |
| Corporate | — | | | — | | | 0.2 | | | 0.1 | |
| $ | 8.2 | | | $ | 8.3 | | | $ | 16.5 | | | $ | 16.7 | |
| | | | | | | |
| | | | | June 30,
2025 | | December 31,
2024 |
| Identifiable assets: | | | | | | | |
| Supply Technologies | | | | | $ | 504.9 | | | $ | 465.6 | |
| Assembly Components | | | | | 294.5 | | | 284.3 | |
| Engineered Products | | | | | 467.1 | | | 468.8 | |
| Corporate | | | | | 155.2 | | | 146.4 | |
| | | | | $ | 1,421.7 | | | $ | 1,365.1 | |
NOTE 5 — Inventories
Inventories, net consist of the following:
| | | | | | | | | | | |
| June 30, 2025 | | December 31, 2024 |
| (In millions) |
| Raw materials and supplies | $ | 111.2 | | | $ | 108.8 | |
| Work-in-process | 43.8 | | | 53.5 | |
| Finished goods | 270.9 | | | 260.6 | |
| | | |
| Inventories, net | $ | 425.9 | | | $ | 422.9 | |
Table of Contents
Park-Ohio Holdings Corp. and Subsidiaries
Notes to Unaudited Condensed Consolidated Financial Statements
June 30, 2025
NOTE 6 — Accrued Warranty Costs
The Company estimates warranty claims that may be incurred based on current and historical data of products sold. Actual warranty expense could differ from the estimates made by the Company based on product performance. The following table presents changes in the Company’s product warranty liability for the three and six months ended June 30, 2025 and 2024:
| | | | | | | | | | | | | | | | | | | | | | | |
| Three Months Ended June 30, | | Six Months Ended June 30, |
| 2025 | | 2024 | | 2025 | | 2024 |
| (In millions) |
| Beginning balance | $ | 6.1 | | | $ | 6.2 | | | $ | 5.3 | | | $ | 5.5 | |
| Claims paid | (0.9) | | | (0.4) | | | (1.4) | | | (0.8) | |
| Warranty expense | 0.5 | | | 0.2 | | | 1.6 | | | 0.8 | |
| Acquisition | — | | | — | | | — | | | 0.6 | |
| Foreign currency translation and other | (0.6) | | | (0.2) | | | (0.4) | | | (0.3) | |
| Ending balance | $ | 5.1 | | | $ | 5.8 | | | $ | 5.1 | | | $ | 5.8 | |
NOTE 7 — Income Taxes
The Company’s tax provision for interim periods is determined using an estimate of its annual effective rate, adjusted for discrete items in each period, if any.
The effective income tax rates of 17% and 18% for the three and six months ended June 30, 2025, respectively, differed from the U.S. federal statutory rate of 21% (the “U.S. statutory rate”) due primarily to federal research and development tax credit benefit (“R&D benefit”), partially offset by income earned at certain of our foreign entities that are taxed at higher rates than the U.S. statutory rate.
The effective income tax rates of 19% and 22% for the three and six months ended June 30, 2024, respectively, differed from the U.S. statutory rate of due primarily to the R&D benefit and income earned at certain of our foreign entities that are taxed at higher rates than the U.S. statutory rate.
On July 4, 2025, the One Big Beautiful Bill Act (“2025 U.S. tax reform”) was enacted into law. The 2025 U.S. tax reform contains several key tax laws, including extensions and modifications of the Tax Cuts and Jobs Act. In accordance with Accounting Standards Codification (ASC) 740, Income Taxes, the Company is required to recognize the effect of the tax law changes in the period of enactment. The Company is in the process of assessing the impacts from the 2025 U.S. tax reform and will record any tax impact beginning in the third quarter.
NOTE 8 — Financing Arrangements
Debt consists of the following:
Table of Contents
Park-Ohio Holdings Corp. and Subsidiaries
Notes to Condensed Consolidated Financial Statements (Unaudited)
June 30, 2025
| | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | Carrying Value at |
| | Maturity Date | | Interest Rate at
June 30, 2025 | | June 30, 2025 | | December 31, 2024 |
| | | | | | (In millions) |
| Senior Notes | | April 15, 2027 | | 6.625 | % | | $ | 350.0 | | | $ | 350.0 | |
| | | | | | | | |
| Revolving credit facility | | January 14, 2027 | | 5.9 | % | | 287.5 | | | 248.6 | |
| | | | | | | | |
| | | | | | | | |
| Finance Leases | | Various | | Various | | 15.1 | | | 17.0 | |
| Other | | Various | | Various | | 14.4 | | | 13.1 | |
| Total debt | | | | | | 667.0 | | | 628.7 | |
| Less: Current portion of long-term debt and short-term debt | | | | | | (8.7) | | | (8.4) | |
| | | | | | | | |
| Less: Unamortized debt issuance costs | | | | | | (1.6) | | | (2.0) | |
| Total long-term debt | | | | | | $ | 656.7 | | | $ | 618.3 | |
In September 2023, Park-Ohio Industries, Inc. (“Park-Ohio”) amended its Seventh Amended and Restated Credit Agreement (the “Credit Agreement”). The Credit Agreement provides for a revolving credit facility in the amount of $405.0 million, including a $40.0 million Canadian revolving subcommitment and a European revolving subcommitment in the amount of $30.0 million. Pursuant to the Credit Agreement, Park-Ohio has the option to increase the availability under the revolving credit facility by an aggregate incremental amount up to $70.0 million. The Credit Agreement was scheduled to mature on January 14, 2027. As of June 30, 2025, we had borrowing availability of $102.7 million under the Credit Agreement. In July 2025, Park-Ohio entered into an amendment to the Credit Agreement in order to, among other things, extend the maturity date to the fifth anniversary from the closing of the amendment.
We had outstanding bank guarantees and letters of credit under our credit arrangements of $37.7 million at June 30, 2025 and $38.5 million at December 31, 2024.
In 2017, Park-Ohio completed the issuance, in a private placement, of $350.0 million aggregate principal amount of 6.625% Senior Notes due 2027 (the “Notes”). The Notes are unsecured senior obligations of Park-Ohio and are guaranteed on an unsecured senior basis by the 100% owned material domestic subsidiaries of Park-Ohio. On July 31, 2025, Park-Ohio completed its offering of $350.0 million aggregate principal amount of senior secured notes due 2030 (the "New Notes") in a private offering. Park-Ohio intends to use the net proceeds from the New Notes, along with cash on hand, to redeem all of the outstanding Notes. See Note 14 for further discussion.
The following table represents fair value information of the Notes, classified as Level 1 using estimated quoted market prices.
| | | | | | | | | | | |
| June 30, 2025 | | December 31, 2024 |
| (In millions) |
| Carrying amount | $ | 350.0 | | | $ | 350.0 | |
| Fair value | $ | 342.1 | | | $ | 344.3 | |
The fair value of the revolving credit facility is equal to its carrying value as the Company has the ability to repay the outstanding principal at par value at any time. The carrying values of cash and cash equivalents, accounts receivable and accounts payable approximate fair value due to the short-term nature of these instruments.
Table of Contents
Park-Ohio Holdings Corp. and Subsidiaries
Notes to Condensed Consolidated Financial Statements (Unaudited)
June 30, 2025
NOTE 9 — Stock-Based Compensation
A summary of restricted share activity for the six months ended June 30, 2025 is as follows:
| | | | | | | | | | | | | | | |
| 2025 |
| Time-Based | | |
| Number of Shares | | Weighted Average
Grant Date
Fair Value | | | | |
| (In whole shares) | | | | | | |
| Outstanding - beginning of year | 675,727 | | | $ | 21.07 | | | | | |
Granted(a) | 41,737 | | | 17.97 | | | | | |
| Vested | (251,335) | | | 18.87 | | | | | |
| | | | | | | |
| Canceled or expired | (9,119) | | | 20.24 | | | | | |
| Outstanding - end of period | 457,010 | | | $ | 22.01 | | | | | |
(a) - Included in this amount are 2,422 restricted share units.
Stock-based compensation is included in Selling, general and administrative expenses in the Condensed Consolidated Statements of Income. Total stock-based compensation expense was $1.3 million and $1.2 million for the three months ended June 30, 2025 and 2024, respectively. Total stock-based compensation expense was $2.8 million and $2.7 million for the six months ended June 30, 2025 and 2024, respectively. As of June 30, 2025, there was $6.1 million of unrecognized compensation cost related to non-vested stock-based compensation, which is expected to be recognized over a weighted-average period of 1.6 years.
NOTE 10 — Commitments and Contingencies
The Company is subject to a variety of claims, suits, investigations and administrative proceedings with respect to commercial, premises liability, product liability, employment, personal injury and environmental matters arising from the ordinary course of business. The Company records a liability for loss contingencies in the consolidated financial statements when a loss is known or considered probable and the amount can be reasonably estimated. Our provisions are based on historical experience, current information and legal advice, and they may be adjusted in the future based on new developments. Estimating probable losses requires the analysis of multiple forecasted factors that often depend on judgments and potential actions by third parties. Although it is not possible to predict with certainty the ultimate outcome or cost of these matters, the Company believes they will not have a material adverse effect on our consolidated financial statements.
Our subsidiaries are involved in a number of contractual and warranty-related disputes. We believe that appropriate liabilities for these contingencies have been recorded; however, actual results may differ materially from our estimates.
In addition to the routine lawsuits and asserted claims noted above, we are also a co-defendant in 110 cases asserting claims on behalf of 152 plaintiffs alleging personal injury as a result of exposure to asbestos. In every asbestos case in which we are named as a party, the complaints are filed against multiple named defendants. Historically, we have been dismissed from asbestos cases. We intend to vigorously defend these cases and believe we will continue to be successful in being dismissed from such cases.
While it is not possible to predict the ultimate outcome of asbestos-related lawsuits, claims and proceedings due to the unpredictable nature of personal injury litigation, and although our results of operations and cash flows for a particular period could be adversely affected by asbestos-related lawsuits, claims and proceedings, management believes that the ultimate resolution of these matters will not have a material adverse effect on our financial condition, liquidity or results of operations.
Table of Contents
Park-Ohio Holdings Corp. and Subsidiaries
Notes to Condensed Consolidated Financial Statements (Unaudited)
June 30, 2025
NOTE 11 — Pension and Postretirement Benefits
The components of net periodic benefit (income) expense costs recognized for the three and six months ended June 30, 2025 and 2024 were as follows:
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Pension Benefits | | Postretirement Benefits |
| Three Months Ended June 30, | | Six Months Ended June 30, | | Three Months Ended June 30, | | Six Months Ended June 30, |
| | 2025 | | 2024 | | 2025 | | 2024 | | 2025 | | 2024 | | 2025 | | 2024 |
| (In millions) |
| Service costs | $ | 0.9 | | | $ | 1.1 | | | $ | 1.9 | | | $ | 2.3 | | | $ | — | | | $ | — | | | $ | — | | | $ | — | |
| Interest costs | 0.8 | | | 0.8 | | | 1.7 | | | 1.7 | | | — | | | — | | | 0.1 | | | 0.1 | |
| Expected return on plan assets | (2.8) | | | (2.6) | | | (5.6) | | | (5.3) | | | — | | | — | | | (0.1) | | | (0.1) | |
| Recognized net actuarial loss | 0.2 | | | 0.4 | | | 0.3 | | | 0.8 | | | — | | | — | | | — | | | 0.1 | |
| Net periodic benefit (income) expense | $ | (0.9) | | | $ | (0.3) | | | $ | (1.7) | | | $ | (0.5) | | | $ | — | | | $ | — | | | $ | — | | | $ | 0.1 | |
| | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
NOTE 12 — Accumulated Other Comprehensive Loss
The components of and changes in accumulated other comprehensive loss for the three and six months ended June 30, 2025 and 2024 were as follows:
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Cumulative Translation Adjustment | | Cash Flow Hedges | | Pension and Postretirement Benefits | | Total | | Cumulative Translation Adjustment | | Cash Flow Hedges | | Pension and Postretirement Benefits | | Total |
| (In millions) |
| | Three Months Ended June 30, 2025 | | Three Months Ended June 30, 2024 |
| Beginning balance | $ | (36.6) | | | $ | 0.4 | | | $ | (5.2) | | | $ | (41.4) | | | $ | (32.3) | | | $ | — | | | $ | (12.7) | | | $ | (45.0) | |
Currency translation(a) | 13.3 | | | — | | | — | | | 13.3 | | | (3.1) | | | — | | | — | | | (3.1) | |
| | | | | | | | | | | | | | | |
| Foreign currency forward contracts, net of tax | — | | | 1.4 | | | — | | | 1.4 | | | — | | | (1.1) | | | — | | | (1.1) | |
| Pension and OPEB activity, net of tax | — | | | — | | | 0.1 | | | 0.1 | | | — | | | — | | | 0.4 | | | 0.4 | |
| | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
| Ending balance | $ | (23.3) | | | $ | 1.8 | | | $ | (5.1) | | | $ | (26.6) | | | $ | (35.4) | | | $ | (1.1) | | | $ | (12.3) | | | $ | (48.8) | |
| | | | | | | | | | | | | | | |
| Six Months Ended June 30, 2025 | | Six Months Ended June 30, 2024 |
| Beginning balance | $ | (46.0) | | | $ | (0.4) | | | $ | (5.4) | | | $ | (51.8) | | | $ | (30.5) | | | $ | — | | | $ | (13.2) | | | $ | (43.7) | |
Currency translation (a) | 22.7 | | | — | | | — | | | 22.7 | | | (4.9) | | | — | | | — | | | (4.9) | |
| Foreign currency forward contracts | — | | | 2.2 | | | — | | | 2.2 | | | — | | | (1.1) | | | — | | | (1.1) | |
| Pension and OPEB activity, net of tax | — | | | — | | | 0.3 | | | 0.3 | | | — | | | — | | | 0.9 | | | 0.9 | |
| | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
| Ending balance | $ | (23.3) | | | $ | 1.8 | | | $ | (5.1) | | | $ | (26.6) | | | $ | (35.4) | | | $ | (1.1) | | | $ | (12.3) | | | $ | (48.8) | |
(a)No income taxes were provided on currency translation as foreign earnings are considered permanently reinvested.
NOTE 13 — Weighted-Average Number of Shares Used in Computing Earnings Per Share
The following table sets forth the weighted-average number of shares used in the computation of earnings per share:
Table of Contents
Park-Ohio Holdings Corp. and Subsidiaries
Notes to Condensed Consolidated Financial Statements (Unaudited)
June 30, 2025
| | | | | | | | | | | | | | | | | | | | | | | |
| | Three Months Ended June 30, | | Six Months Ended June 30, |
| | 2025 | | 2024 | | 2025 | | 2024 |
| (In millions) |
| Weighted-average basic shares outstanding | 13.7 | | | 12.5 | | | 13.7 | | | 12.4 | |
| Plus: Dilutive impact of employee stock awards | 0.3 | | | 0.4 | | | 0.2 | | | 0.4 | |
| Weighted-average diluted shares outstanding | 14.0 | | | 12.9 | | | 13.9 | | | 12.8 | |
Anti-dilutive restricted stock awards, if any, are excluded from the computation of diluted earnings per share. Anti-dilutive shares were 0.0 million for both the three and six months ended June 30, 2025 and 2024.
In June 2024, the Company entered into an agreement providing for an at-the-market program (“ATM program”) authorizing the sale of up to $50.0 million of the Company's common stock. No sales were made in the six months ended June 30, 2025, and the Company has $34.1 million remaining under the ATM program.
NOTE 14 — Subsequent Events
On July 18, 2025, the Company's Board of Directors declared a quarterly dividend of $0.125 per common share. The dividend will be paid on August 15, 2025 to shareholders of record as of the close of business on August 1, 2025 and will result in a cash outlay of approximately $1.8 million.
On July 31, 2025, Park-Ohio completed its offering of $350.0 million aggregate principal amount of New Notes in a private offering. The New Notes were priced at 99.50% of par and bear an interest rate of 8.50% per annum. The New Notes are senior secured obligations of Park-Ohio and are guaranteed (with certain exceptions) by Park-Ohio's domestic subsidiaries that guarantee the debt under the Credit Agreement on a senior secured basis. Park-Ohio intends to use the net proceeds from the offering of the New Notes, along with cash on hand, to redeem all $350.0 million aggregate principal amount of its outstanding Notes and pay related fees and expenses.
In July 2025, Park-Ohio entered into an amendment to the Credit Agreement in order to, among other things, extend the maturity date to the fifth anniversary from the closing of the amendment.
| | | | | |
| Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations |
Our condensed consolidated financial statements include the accounts of Park-Ohio Holdings Corp. and its subsidiaries (collectively, “we,” “our,” or the “Company”). All significant intercompany transactions have been eliminated in consolidation.
EXECUTIVE OVERVIEW
We are a diversified international company providing world-class customers with a supply chain management outsourcing service, capital equipment used on their production lines, and manufactured components used to assemble their products. We operate through three reportable segments: Supply Technologies, Assembly Components and Engineered Products.
Supply Technologies provides our customers with Total Supply Management™, a proactive solutions approach that manages the efficiencies of every aspect of supplying production parts and materials to our customers’ manufacturing floor, from strategic planning to program implementation. Total Supply Management™ includes such services as engineering and design support, part usage and cost analysis, supplier selection, quality assurance, bar coding, product packaging and tracking, just-in-time and point-of-use delivery, electronic billing services and ongoing technical support. Our Supply Technologies business services customers in the following principal industries: heavy-duty truck; power sports and recreational equipment; aerospace and defense; semiconductor equipment; electrical distribution and controls; consumer electronics; bus and coaches; automotive; agricultural and industrial equipment; HVAC; lawn and garden; plumbing; and medical devices.
Assembly Components manufactures products oriented towards fuel efficiency and reduced emission standards. Assembly Components designs, develops and manufactures aluminum products and highly efficient, high pressure direct fuel injection fuel rails and pipes; fuel filler pipes that route fuel from the gas cap to the gas tank; flexible multi-layer plastic and rubber assemblies used to transport fuel from the vehicle's gas tank and then, at extreme high pressure, to the engine's fuel injector nozzles. Our product offerings include gasoline direct injection systems and fuel filler assemblies, and industrial hose and injected molded rubber and plastic components. Our products are primarily used in the following industries: including automotive and light-vehicle; agricultural equipment; construction equipment; heavy-duty truck; and bus.
Engineered Products operates a diverse group of niche manufacturing businesses that design and manufacture a broad range of highly-engineered products, including induction heating and melting systems, pipe threading systems and forged and machined products. Engineered Products also produces and provides services and spare parts for the equipment it manufactures. The principal customers of Engineered Products are OEMs, sub-assemblers and end users in the following industries: ferrous and non-ferrous metals; coatings; forging; foundry; heavy-duty truck; construction equipment; automotive; oil and gas; rail; aerospace and defense; and power generation.
Our business is global in scope, and government trade actions may materially and adversely impact our business, financial condition and results of operations. The U.S. government has recently taken, and may continue to take, trade actions that impact or could impact our operations, including, but not limited to, imposing tariffs on certain goods and raw materials imported into the United States. For example, during April 2025, the U.S. government announced baseline tariffs on products from all countries and additional individualized reciprocal tariffs on the countries with which the United States has the largest trade deficits, including China. In addition, several governments, including the European Union, China and India, have imposed tariffs, including reciprocal tariffs, on certain goods imported from the United States. Given the current macroeconomic environment and uncertainty around tariffs, we continue to assess the impact of added costs for certain imported raw materials and other components and demand softness in certain of our key end markets. We are working with our customers and suppliers and expect to mitigate the impact of added costs caused by tariffs. Conversely, we believe many of our businesses are well positioned to benefit in the long term from the current environment due to higher production activity and localized sourcing back into the United States.
Sales and operating income for these three segments are provided in Note 4 to the condensed consolidated financial statements, included elsewhere herein.
Subsequent Events
On July 31, 2025, Park-Ohio Industries, Inc. (“Park-Ohio”), a subsidiary of Park-Ohio Holdings Corp., completed its offering of $350.0 million aggregate principal amount of senior secured notes due 2030 (the "New Notes") in a private offering. The New Notes were priced at 99.50% of par and bear an interest rate of 8.50% per annum. The New Notes are senior secured obligations of Park-Ohio and are guaranteed (with certain exceptions) by Park-Ohio's domestic subsidiaries that guarantee the debt under Park-Ohio's Seventh Amended and Restated Credit Agreement (the "Credit Agreement") on a senior secured basis. Park-Ohio intends to use the net proceeds from the offering of the New Notes, along with cash on hand, to redeem all $350.0 million aggregate principal amount of its outstanding 6.625% Senior Notes due 2027 (the “Notes”) and pay related fees and expenses.
In July 2025, Park-Ohio entered into an amendment to the Credit Agreement in order to, among other things, extend the maturity date to the fifth anniversary from the closing of the amendment.
RESULTS OF CONTINUING OPERATIONS
Three Months Ended June 30, 2025 Compared with Three Months Ended June 30, 2024
| | | | | | | | | | | | | | | | | | | | | | | |
| Three Months Ended June 30, | | | | |
| 2025 | | 2024 | | $ Change | | % Change |
| (Dollars in millions, except per share data) |
| Net sales | $ | 400.1 | | | $ | 432.6 | | | $ | (32.5) | | | (7.5) | % |
| Cost of sales | 331.9 | | | 359.4 | | | (27.5) | | | (7.7) | % |
| | | | | | | |
| | | | | | | |
Selling, general and administrative (“SG&A”) expenses
| 46.8 | | | 47.4 | | | (0.6) | | | (1.3) | % |
| SG&A expenses as a percentage of net sales | 11.7 | % | | 11.0 | % | | | | |
| | | | | | | |
| | | | | | | |
| Restructuring and other special charges | 1.3 | | | 1.2 | | | 0.1 | | | 8.3 | % |
| | | | | | | |
| Operating income | 20.1 | | | 24.6 | | | (4.5) | | | (18.3) | % |
| Other components of pension and other postretirement benefits income, net | 1.8 | | | 1.4 | | | 0.4 | | | 28.6 | % |
| Interest expense, net | (11.2) | | | (12.0) | | | 0.8 | | | (6.7) | % |
| | | | | | | |
| Income from continuing operations before income taxes | 10.7 | | | 14.0 | | | (3.3) | | | (23.6) | % |
| Income tax expense | (1.8) | | | (2.6) | | | 0.8 | | | (30.8) | % |
| | | | | | | |
| | | | | | | |
| Income from continuing operations | 8.9 | | | 11.4 | | | (2.5) | | | (21.9) | % |
| Loss attributable to noncontrolling interests | 0.4 | | | 0.9 | | | (0.5) | | | (55.6) | % |
| Income from continuing operations attributable to Park-Ohio Holdings Corp. common shareholders | $ | 9.3 | | | $ | 12.3 | | | $ | (3.0) | | | (24.4) | % |
| | | | | | | |
| Income per common share from continuing operations attributable to Park-Ohio Holdings Corp. common shareholders: | | | | | | | |
| Basic: | | | | | | | |
| Continuing operations | $ | 0.68 | | | $ | 0.98 | | | $ | (0.30) | | | (30.6) | % |
| | | | | | | |
| | | | | | | |
| | | | | | | |
| Diluted: | | | | | | | |
| Continuing operations | $ | 0.67 | | | $ | 0.95 | | | $ | (0.28) | | | (29.5) | % |
| | | | | | | |
| | | | | | | |
*Calculation not meaningful
Net Sales
Net sales decreased 7.5% to $400.1 million in the second quarter of 2025 compared to $432.6 million in the same period in 2024. This decrease was primarily due to lower demand in all three of our business segments.
The factors explaining the changes in segment net sales for the three months ended June 30, 2025 compared to the corresponding 2024 period are contained within the “Segment Results” section below.
Cost of Sales and Gross Margin
Cost of sales decreased to $331.9 million in the second quarter of 2025 compared to $359.4 million in the same period in 2024. The decrease in cost of sales was primarily due to the decrease in net sales for the 2025 period compared to the corresponding period in 2024, plus the impact of ongoing profit improvement initiatives. Gross margin improved to 17.0% in the 2025 period compared to 16.9% in the corresponding 2024 period, as cost-containment measures helped offset the lower sales levels.
SG&A Expenses
SG&A expenses were $46.8 million in the second quarter of 2025 compared to $47.4 million in the comparable period in 2024, a decrease of 1.3%. As a percentage of net sales, SG&A expenses were 11.7% in the second quarter of 2025 compared to 11.0% in corresponding 2024 period. These increases were driven by ongoing inflation, higher employee costs and fixed SG&A costs over lower sales levels.
Restructuring and Other Special Charges
During the second quarter of 2024, the Company recorded charges of $1.3 million in connection with restructuring and other special charges, spread across our business segments, which included $0.4 million in our Supply Technologies segment, $0.5 million in our Assembly Components segment and $0.4 million in our Engineered Products segment.
During the second quarter of 2024, the Company recorded charges of $1.2 million in connection with restructuring and other special charges, primarily in our Engineered Products segment.
Other Components of Pension and Other Postretirement Benefits (“OPEB”) Income, Net
Other components of pension and OPEB income, net was $1.8 million in the quarter ended June 30, 2025 compared to $1.4 million in the corresponding quarter in 2024. This increase was due to lower net actuarial losses impacting 2025 compared to 2024.
Interest Expense, Net
Interest expense, net was $11.2 million in the second quarter of 2025 compared to $12.0 million in the 2024 second quarter. The decrease was due primarily to lower interest rates and lower average outstanding debt balances in the 2025 second quarter compared to the same quarter a year ago.
Income Tax Expense
The effective income tax rates of 17% and 19% for the three months ended June 30, 2025 and 2024, respectively, differed from the U.S. federal statutory rate of 21% (the “U.S. statutory rate”) due primarily to federal research and development tax credit benefit (“R&D benefit”), partially offset by income earned at certain of our foreign entities that are taxed at higher rates than the U.S. statutory rate.
RESULTS OF CONTINUING OPERATIONS
Six Months Ended June 30, 2025 Compared with Six Months Ended June 30, 2024
| | | | | | | | | | | | | | | | | | | | | | | |
| Six Months Ended June 30, | | | | |
| 2025 | | 2024 | | $ Change | | % Change |
| (Dollars in millions, except per share data) |
| Net sales | $ | 805.5 | | | $ | 850.2 | | | $ | (44.7) | | | (5.3) | % |
| Cost of sales | 669.2 | | | 705.6 | | | (36.4) | | | (5.2) | % |
| | | | | | | |
| | | | | | | |
| SG&A expenses | 95.0 | | | 94.5 | | | 0.5 | | | 0.5 | % |
| SG&A expenses as a percentage of net sales | 11.8 | % | | 11.1 | % | | | | |
| Restructuring and other special charges | 2.3 | | | 1.5 | | | 0.8 | | | 53.3 | % |
| | | | | | | |
| | | | | | | |
| | | | | | | |
| Operating income | 39.0 | | | 48.6 | | | (9.6) | | | (19.8) | % |
Other components of pension and other postretirement benefits income, net | 3.6 | | | 2.7 | | | 0.9 | | | 33.3 | % |
| Interest expense, net | (22.2) | | | (23.9) | | | 1.7 | | | (7.1) | % |
| | | | | | | |
| Income from continuing operations before income taxes | 20.4 | | | 27.4 | | | (7.0) | | | (25.5) | % |
| Income tax expense | (3.7) | | | (5.9) | | | 2.2 | | | (37.3) | % |
| | | | | | | |
| | | | | | | |
| Income from continuing operations | 16.7 | | | 21.5 | | | (4.8) | | | (22.3) | % |
| Loss attributable to noncontrolling interests | 1.1 | | | 1.4 | | | (0.3) | | | (21.4) | % |
| Income from continuing operations attributable to Park-Ohio Holdings Corp. common shareholders | $ | 17.8 | | | $ | 22.9 | | | $ | (5.1) | | | (22.3) | % |
| | | | | | | |
| Earnings from continuing operations per common share attributable to Park-Ohio Holdings Corp. common shareholders: | | | | | | | |
| Basic: | | | | | | | |
| Continuing operations | $ | 1.30 | | | $ | 1.85 | | | $ | (0.55) | | | (29.7) | % |
| | | | | | | |
| | | | | | | |
| | | | | | | |
| Diluted: | | | | | | | |
| Continuing operations | $ | 1.28 | | | $ | 1.79 | | | $ | (0.51) | | | (28.5) | % |
| | | | | | | |
| | | | | | | |
*Calculation not meaningful
Net Sales
Net sales decreased 5.3% to $805.5 million in the first six months of 2025 compared to $850.2 million in the same period in 2024. This decrease was primarily due to lower demand in our Supply Technologies and Assembly Components segments.
The factors explaining the changes in segment net sales for the six months ended June 30, 2025 compared to the corresponding 2024 period are contained in the “Segment Results” section below.
Cost of Sales and Gross Margin
Cost of sales decreased to $669.2 million in the first six months of 2025 compared to $705.6 million in the same period in 2024, driven by the decrease in net sales described above. Gross margin was 16.9% in the 2025 period compared to 17.0% in the corresponding 2024 period. The year-over-year gross margin decrease was driven by the decrease in net sales described above, partially offset by cost-containment measures due to lower sales levels.
SG&A Expenses
SG&A expenses were $95.0 million in the first six months of 2025, compared to $94.5 million in the same period in 2024, an increase of 0.5%. As a percentage of net sales, SG&A expenses were 11.8% in the first six months of 2025 compared to 11.1% in the comparable period in 2024. These increases were driven by ongoing inflation, higher employee costs and fixed SG&A costs over lower sales levels.
Restructuring and Other Special Charges
During the first six months of 2025, the Company recorded $2.3 million in connection restructuring and other special charges which included $0.4 million in our Supply Technologies segment, $0.7 million in our Assembly Components segment and $1.2 million in our Engineered Products segment.
During 2024, the Company recorded $1.2 million in connection restructuring and other special charges, primarily in our Engineered Products segment, as well as acquisition-related charges of $0.3 million in connection with the acquisition of EMA Indutec GmbH (“EMA”)
Other Components of Pension and OPEB Income, Net
Other components of pension and OPEB income, net was $3.6 million in the first six months of 2025 compared to $2.7 million in the corresponding period in 2024. This increase was due to lower net actuarial losses impacting 2025 compared to 2024.
Interest Expense, Net
Interest expense, net was $22.2 million in the first six months of 2025 compared to $23.9 million in the 2024 period. The decrease was due primarily to lower interest rates and lower average outstanding debt balances in the 2025 period compared to the same period a year ago.
Income Tax Expense
The effective income tax rates of 18% and 22% for the six months ended June 30, 2025 and 2024, respectively, differed from the U.S. statutory rate of due primarily to the R&D benefit and income earned at certain of our foreign entities that are taxed at higher rates than the U.S. statutory rate.
SEGMENT RESULTS
For purposes of measuring business segment performance, the chief operating decision maker utilizes segment operating income, which is defined as revenues less expenses identifiable to the product lines within each segment. The Company does not allocate items that are non-operating; unusual in nature; or corporate costs, which include but are not limited to executive compensation and corporate office costs. Segment operating income reconciles to consolidated income before income taxes by adjusting for corporate costs; other components of pension and other postretirement benefits income, net; and interest expense, net.
Supply Technologies Segment
| | | | | | | | | | | | | | | | | | | | | | | |
| Three Months Ended June 30, | | Six Months Ended June 30, |
| 2025 | | 2024 | | 2025 | | 2024 |
| (Dollars in millions) |
| Net sales | $ | 187.1 | | | $ | 202.6 | | | $ | 374.9 | | | $ | 399.5 | |
| Segment operating income | $ | 16.3 | | | $ | 19.0 | | | $ | 34.1 | | | $ | 38.5 | |
| Segment operating income margin | 8.7 | % | | 9.4 | % | | 9.1 | % | | 9.6 | % |
Three months ended June 30:
Net sales decreased 7.7% in the three months ended June 30, 2025 compared to the 2024 period due primarily to lower customer demand in certain end markets in our supply chain business, including power sports, heavy duty truck and bus, industrial equipment and aerospace and defense, partially offset by increases in the electrical and semiconductor end markets. Sales in our fastener manufacturing business were down 10% year-over-year, driven by overall market softness.
Segment operating income was $16.3 million in the 2025 period compared to $19.0 million in the 2024 period. Operating income margin was 8.7% in the 2025 quarter compared to 9.4% in the 2024 period. In the 2025 period, profit-enhancement actions, including alignment of variable costs to lower demand levels, partially offset the impact of lower sales levels on profitability. In the 2025 and 2024 periods, charges related to restructuring and other special charges were $0.4 million and $0.2 million, respectively.
Six months ended June 30:
Net sales decreased 6.2% in the six months ended June 30, 2025 compared to the 2024 period due primarily to lower customer demand in certain end markets in our supply chain business, including power sports, heavy duty truck and bus, industrial and agricultural equipment and aerospace and defense, partially offset by increases in the electrical and semiconductor end markets. Sales in our fastener manufacturing business were down 10% year-over-year, driven by overall market softness.
Segment operating income was $34.1 million in the 2025 period compared to $38.5 million in the 2024 period. Operating income margin was 9.1% in the six month ended June 30, 2025 compared to 9.6% in the 2024 period. In the 2025 period, profit-enhancement actions, including alignment of variable costs to lower demand levels, partially offset the impact of lower sales levels on profitability. In the 2025 and 2024 periods, charges related to restructuring and other special charges were $0.4 million and $0.2 million, respectively.
Assembly Components Segment
| | | | | | | | | | | | | | | | | | | | | | | |
| Three Months Ended June 30, | | Six Months Ended June 30, |
| 2025 | | 2024 | | 2025 | | 2024 |
| (Dollars in millions) |
| Net sales | $ | 95.1 | | | $ | 103.1 | | | $ | 192.0 | | | $ | 210.3 | |
| Segment operating income | $ | 5.6 | | | $ | 6.9 | | | $ | 10.9 | | | $ | 15.5 | |
| Segment operating income margin | 5.9 | % | | 6.7 | % | | 5.7 | % | | 7.4 | % |
Three months ended June 30:
Net sales decreased 7.8% in the three months ended June 30, 2025 compared to the 2024 period. Sales were lower quarter-over-quarter due primarily to lower unit volumes in our fuel rail and extruded rubber products, customer delays on new business launches, and favorable pricing that ended in 2024 on certain legacy programs
Segment operating income in the 2025 period decreased by $1.3 million, and segment operating income margin decreased by 80 basis points compared to the corresponding period of 2024. The decreases in operating income and margin in the second quarter of 2025 compared to the 2024 period were due to the lower unit volumes. The 2025 period also included $0.5 million of charges related to restructuring and other special charges.
Six months ended June 30:
Net sales were $192.0 million, or 8.7%, lower in the six months ended June 30, 2025 compared to the 2024 period. The decrease was due primarily to lower unit volumes in our fuel rail and extruded rubber products, customer delays on new business launches, and favorable pricing that ended in 2024 on certain legacy programs
Segment operating income decreased to $10.9 million in the six months ended June 30, 2025 compared to $15.5 million in the 2024 period. The decrease was due to the lower unit volumes. The 2025 period also included $0.7 million of charges related to restructuring and other special charges.
Engineered Products Segment
| | | | | | | | | | | | | | | | | | | | | | | |
| Three Months Ended June 30, | | Six Months Ended June 30, |
| 2025 | | 2024 | | 2025 | | 2024 |
| (Dollars in millions) |
| Net sales | $ | 117.9 | | | $ | 126.9 | | | $ | 238.6 | | | $ | 240.4 | |
| Segment operating income | $ | 6.0 | | | $ | 6.3 | | | $ | 9.8 | | | $ | 9.8 | |
| Segment operating income margin | 5.1 | % | | 5.0 | % | | 4.1 | % | | 4.1 | % |
Three months ended June 30:
Net sales were $117.9 million in the 2025 second quarter, a decrease of 7.1%, compared to $126.9 million in last year's second quarter. The year-over-year decrease was driven by lower sales in our capital equipment business in North America, partially offset by sales growth in Europe and Asia. In our forged and machined products business, second quarter 2025 sales were down 22% compared to the same quarter a year ago, driven by order delays and closure of a small manufacturing operation in 2024.
Segment operating income in the 2025 period decreased by $0.3 million compared to the corresponding 2024 period. The decrease in the 2025 period was driven by the lower sales, partially offset by operational efficiencies, alignment of variable costs to lower demand levels and other profit-enhancement initiatives. The 2025 and 2024 periods also included $0.4 million and $1.0 million, respectively, of charges related to restructuring and other special charges.
Six months ended June 30:
Net sales were $238.6 million in the six months ended June 30, 2025 compared to $240.4 million in comparable 2024 period. The year-over-year decrease was driven by lower sales in our forged and machined products business, driven by order delays and closure of a small manufacturing operation in 2024, offset by a 5% increase in sales at our industrial equipment business.
Segment operating income in the 2025 and 2024 periods was $9.8 million. The 2025 and 2024 periods also included $1.2 million and $1.3 million, respectively, of charges related to restructuring and other special charges.
Liquidity and Capital Resources
The following table summarizes the major components of cash flow:
| | | | | | | | | | | | | | | | | |
| Six Months Ended June 30, | | |
| 2025 | | 2024 | | $ Change |
| Net cash (used in) provided by: | (In millions) |
| Operating activities | $ | (23.7) | | | $ | (0.4) | | | $ | (23.3) | |
| Investing activities | (16.9) | | | (24.2) | | | 7.3 | |
| Financing activities | 31.5 | | | 35.3 | | | (3.8) | |
| Discontinued operations | (0.3) | | | (4.1) | | | 3.8 | |
| Effect of exchange rate changes on cash | 1.9 | | | (1.5) | | | 3.4 | |
| (Decrease) increase in cash and cash equivalents | $ | (7.5) | | | $ | 5.1 | | | $ | (12.6) | |
Operating Activities
In the six months ended June 30, 2025, we utilized cash of $23.7 million compared to $0.4 million in the same period of 2024. Cash flow from operating activities was lower in 2025 due to higher working capital needs, primarily higher accounts receivable and lower accrued expenses.
Investing Activities
Capital expenditures were $16.9 million in the six months ended June 30, 2025 and were primarily to provide increased capacity for future growth in our Engineered Products and Assembly Components segments, to maintain existing operations and for information system implementations.
Capital expenditures were $13.2 million in the six months ended June 30, 2024 and were primarily to provide increased capacity for future growth in our Engineered Products and Assembly Components segments, to maintain existing operations and for information system implementations. Additionally, during the six months ended June 30, 2024, the Company paid $11.0 million, net of cash acquired for the EMA acquisition.
Financing Activities
During the six months ended June 30, 2025, we had net debt borrowings of $36.7 million to fund capital expenditures and working capital needs. In addition, the Company made cash dividend payments to shareholders totaling $3.6 million.
During the six months ended June 30, 2024, we had net debt borrowings of $41.7 million to fund capital expenditures and the EMA acquisition. In addition, in the six months ended June 30, 2024, the Company made scheduled payments related to prior acquisitions totaling $0.7 million and made cash dividend payments to shareholders totaling $3.3 million.
We do not have off-balance sheet arrangements, financing or other relationships with unconsolidated entities or other persons, other than the letters of credits disclosed in Note 8 to the condensed consolidated financial statements, included elsewhere herein.
Liquidity
Our liquidity needs are primarily for working capital, capital expenditures, dividends and acquisitions. Our primary sources of liquidity have been funds provided by operations, funds available from existing bank credit arrangements and the sale of our debt securities. Our existing financial resources (working capital, available bank borrowing arrangements and our at-the-market program) and anticipated cash flow from operations are expected to be adequate to meet anticipated cash requirements for at least the next twelve months and the foreseeable future thereafter, including but not limited to our ability to maintain current operations and fund capital expenditure requirements, service our debt, pursue acquisitions, pay dividends and repurchase common shares. For more information about our at the market program and other sales of common stock, see Note
13, “Weighted-Average Number of Shares Used in Computing Earnings Per Share,” to the condensed consolidated financial statements, included elsewhere herein.
As of June 30, 2025, we had total liquidity of $189.4 million, which included $45.6 million of cash and cash equivalents and $143.8 million of unused borrowing availability under our credit agreements, which includes $8.5 million of suppressed availability.
The Company had cash and cash equivalents held by foreign subsidiaries of $34.8 million at June 30, 2025 and $43.4 million at December 31, 2024. We do not expect restrictions on repatriation of cash held outside the U.S. to have a material effect on our overall liquidity, financial condition or results of operations for the foreseeable future.
The Company has two components to its assertion regarding reinvestment of foreign earnings outside of the United States. First, for all foreign subsidiaries except RB&W Corporation of Canada (“RB&W”), all earnings are permanently reinvested outside of the United States. Second, for RB&W, dividend distributions may be made, but only to the extent of current earnings in excess of cash required to fund its business operations; all accumulated earnings are permanently reinvested.
Senior Notes
In April 2017, Park-Ohio completed the sale, in a private placement, of $350.0 million aggregate principal amount of the Notes. The net proceeds from the issuance of the Notes were used to repay in full our previously outstanding 8.125% Senior Notes due 2021 and our outstanding term loan, and to repay a portion of the borrowings then outstanding under our revolving credit facility. On July 31, 2025, Park-Ohio completed its offering of $350.0 million aggregate principal amount of the New Notes in a private offering. Park-Ohio intends to use the net proceeds from the offering of the New Notes, along with cash on hand, to redeem all of the outstanding Notes. See the Condensed Consolidation Financial Statements Note 14 for further discussion.
Credit Agreement
In September 2023, Park-Ohio amended its Credit Agreement. The Credit Agreement provides for a revolving credit facility in the amount of $405.0 million, including a $40.0 million Canadian revolving subcommitment and a European revolving subcommitment in the amount of $30.0 million. Pursuant to the Credit Agreement, Park-Ohio has the option to increase the availability under the revolving credit facility by an aggregate incremental amount up to $70.0 million. The Credit Agreement was scheduled to mature on January 14, 2027. In July 2025, Park-Ohio entered into an amendment to the Credit Agreement in order to, among other things, extend the maturity date to the fifth anniversary from the closing of the amendment.
Finance Leases
As of June 30, 2025, the Company had finance leases totaling $15.1 million.
Covenants
The future availability of bank borrowings under the revolving credit facility provided by the Credit Agreement is based on (1) our calculated availability under the Credit Agreement and (2) if such calculated availability decreases below $50.625 million, our ability to meet a debt service ratio covenant. If our calculated availability is less than $50.625 million, our debt service coverage ratio must be greater than 1.0. At June 30, 2025, our calculated availability under the Credit Agreement was $102.7 million; therefore, the debt service ratio covenant did not apply.
Failure to maintain calculated availability of at least $50.625 million and meet the debt service ratio covenant could materially impact the availability and interest rate of future borrowings. Our debt service coverage ratio could be materially impacted by negative economic trends. To make certain permitted payments as defined under the Credit Agreement, including but not limited to acquisitions and dividends, we must meet defined availability thresholds ranging from $37.5 million to $50.625 million, and a defined debt service coverage ratio of 1.15.
As our calculated availability under the Credit Agreement was above $50.625 million, we were also in compliance with the other covenants contained in the revolving credit facility as of June 30, 2025. While we expect to remain in compliance throughout 2025, declines in sales volumes in the future, including due to the current macroeconomic conditions, could adversely impact our ability to remain in compliance with certain of these financial covenants. Additionally, to the extent our customers are adversely affected by declines in the economy in general, they may be unable to pay their accounts payable to us on a timely basis or at all, which could make our accounts receivable ineligible for purposes of the revolving credit facility and could reduce our borrowing base and our ability to borrow under such facility.
Dividends
The Company declared and paid dividends to shareholders of $3.6 million during the six months ended June 30, 2025. On July 18, 2025, the Company's Board of Directors declared a quarterly dividend of $0.125 per common share. The dividend will be paid on August 15, 2025 to shareholders of record as of the close of business on August 1, 2025 and will result in a cash outlay of approximately $1.8 million. Although we currently intend to pay a quarterly dividend on an ongoing basis, all future dividend declarations will be at the discretion of our Board of Directors and dependent upon then-existing conditions, including our operating results and financial condition, capital requirements, contractual restrictions, business prospects and other factors that our Board of Directors may deem relevant.
Seasonality; Variability of Operating Results
The timing of orders placed by our customers has varied with, among other factors, orders for customers’ finished goods, customer production schedules, competitive conditions and general economic conditions. The variability of the level and timing of orders has, from time to time, resulted in significant periodic and quarterly fluctuations in the operations of our businesses. Such variability is particularly evident in our capital equipment business, included in the Engineered Products segment, which typically ships large systems at a relatively lower pace than our other businesses.
Critical Accounting Policies
Our critical accounting policies are described in "Item. 7 Management’s Discussion and Analysis of Financial Condition and Results of Operations," and in the notes to our consolidated financial statements for the year ended December 31, 2024, both contained in our Annual Report on Form 10-K for the year ended December 31, 2024. There were no new critical accounting policies or updates to existing critical accounting policies as a result of new accounting pronouncements in this Quarterly Report on Form 10-Q.
The application of our critical accounting policies may require management to make judgments and estimates about the amounts reflected in the condensed consolidated financial statements. Management uses historical experience and all available information to make these estimates and judgments, and different amounts could be reported using different assumptions and estimates.
Forward-Looking Statements
This Quarterly Report on Form 10-Q contains certain statements that are “forward-looking statements” within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act. The words “believes”, “anticipates”, “plans”, “expects”, “intends”, “estimates” and similar expressions are intended to identify forward-looking statements.
These forward-looking statements, including statements regarding future performance of the Company, that are subject to known and unknown risks, uncertainties and other factors that may cause our actual results, performance and achievements, or industry results, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. These factors that could cause actual results to differ materially from expectations include, but are not limited to, the following: the impact supply chain and logistic issues have on our business, results of operations, financial position and liquidity; our substantial indebtedness; the uncertainty of the global economic environment; general business conditions and competitive factors, including pricing pressures and product innovation; demand for our products and services; the impact of labor disturbances affecting our customers; raw material availability and pricing; fluctuations in energy costs;
component part availability and pricing; changes in our relationships with customers and suppliers; the financial condition of our customers, including the impact of any bankruptcies; our ability to successfully integrate recent and future acquisitions into existing operations; the amounts and timing, if any, of purchases of our common stock; changes in general economic conditions such as inflation rates, interest rates, tax rates, unemployment rates, higher labor and healthcare costs, recessions and changing government policies, laws and regulations, including those related to the current global uncertainties and crises, such as tariffs and surcharges; adverse impacts to us, our suppliers and customers from acts of terrorism or hostilities, including the conflicts between Russia and Ukraine and in the Middle East, or political unrest, including the rising tension between China and the United States; public health issues, including the outbreak of infectious diseases and any impact on our facilities and operations and our customers and suppliers; our ability to meet various covenants, including financial covenants, contained in the agreements governing our indebtedness; disruptions, uncertainties or volatility in the credit markets that may limit our access to capital; potential disruption due to a partial or complete reconfiguration of the European Union; increasingly stringent domestic and foreign governmental regulations, including those affecting the environment or import and export controls and other trade barriers; inherent uncertainties involved in assessing our potential liability for environmental remediation-related activities; the outcome of pending and future litigation and other claims and disputes with customers; our dependence on the automotive and heavy-duty truck industries, which are highly cyclical; the dependence of the automotive industry on consumer spending; our ability to negotiate contracts with labor unions; our dependence on key management; our dependence on information systems; our ability to continue to pay cash dividends, and the timing and amount of any such dividends; and the other factors we describe under “Item 1A. Risk Factors” included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024. Any forward-looking statement speaks only as of the date on which such statement is made, and we undertake no obligation to update any forward-looking statement, whether as a result of new information, future events or otherwise, except as required by law. In light of these and other uncertainties, the inclusion of a forward-looking statement herein should not be regarded as a representation by us that our plans and objectives will be achieved.
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| Item 3. | Quantitative and Qualitative Disclosure About Market Risk |
We are exposed to market risk, including changes in interest rates. As of June 30, 2025, we are subject to interest rate risk on borrowings under the floating rate revolving credit facility provided by our Credit Agreement. A 100-basis-point increase in the interest rate would have resulted in an increase in interest expense on these borrowings of approximately $1.4 million during the six-month period ended June 30, 2025.
Our foreign subsidiaries generally conduct business in local currencies. We face translation risks related to the changes in foreign currency exchange rates. Amounts invested in our foreign operations are translated in U.S. dollars at the exchange rates in effect at the balance sheet date. The resulting translation adjustments are recorded as a component of Accumulated other comprehensive loss in the Shareholders' Equity section of the accompanying Condensed Consolidated Balance Sheets. Sales and expenses at our foreign operations are translated into U.S. dollars at the applicable monthly average exchange rates. Therefore, changes in exchange rates may either positively or negatively affect our net sales and expenses from foreign operations as expressed in U.S. dollars.
Our largest exposures to commodity prices relate to metal and rubber compounds, which have fluctuated widely in recent years. In 2025 and 2024, we entered into agreements to hedge foreign currency. These agreements did not have a material impact on the results of the Company. We have no other commodity swap agreements or forward purchase contracts.
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| Item 4. | Controls and Procedures |
Evaluation of disclosure controls and procedures.
Under the supervision of and with the participation of our management, including our chief executive officer and chief financial officer, we evaluated the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15(d)-15(e) under the Exchange Act) as of the end of the period covered by this Quarterly Report. Based on that evaluation, our chief executive officer and chief financial officer have concluded that, as of the end of the period covered by this Quarterly Report, our disclosure controls and procedures were effective.
Changes in internal control over financial reporting.
During the quarter ended June 30, 2025, there were no changes in our internal control over financial reporting that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
Part II. Other Information
We are involved in a variety of claims, suits, investigations and administrative proceedings with respect to commercial, premises liability, product liability, employment, personal injury and environmental matters arising from the ordinary course of business. While any such claims, suits, investigations and proceedings involve an element of uncertainty, in the opinion of management, liabilities, if any, arising from currently pending or threatened litigation are not expected to have a material adverse effect on our financial condition, liquidity or results of operations.
In addition to the routine lawsuits and asserted claims noted above, we were a party to the lawsuits and legal proceedings described below as of June 30, 2025:
We were a co-defendant in 110 cases asserting claims on behalf of 152 plaintiffs alleging personal injury as a result of exposure to asbestos. These asbestos cases generally relate to production and sale of asbestos-containing products and allege various theories of liability, including negligence, gross negligence and strict liability, and seek compensatory and, in some cases, punitive damages.
In every asbestos case in which we are named as a party, the complaints are filed against multiple named defendants. In substantially all of the asbestos cases, the plaintiffs either claim damages in excess of a specified amount, typically a minimum amount sufficient to establish jurisdiction of the court in which the case was filed (jurisdictional minimums generally range from $25,000 to $75,000), or do not specify the monetary damages sought. To the extent that any specific amount of damages is sought, the amount applies to claims against all named defendants.
Historically, we have been dismissed from asbestos cases on the basis that the plaintiff incorrectly sued one of our subsidiaries or because the plaintiff failed to identify any asbestos-containing product manufactured or sold by us or our subsidiaries. We intend to vigorously defend these asbestos cases, and believe we will continue to be successful in being dismissed from such cases. However, it is not possible to predict the ultimate outcome of asbestos-related lawsuits, claims and proceedings due to the unpredictable nature of personal injury litigation. Despite this uncertainty, and although our results of operations and cash flows for a particular period could be adversely affected by asbestos-related lawsuits, claims and proceedings, management believes that the ultimate resolution of these matters will not have a material adverse effect on our financial condition, liquidity or results of operations. Among the factors management considered in reaching this conclusion were: (a) our historical success in being dismissed from these types of lawsuits on the bases mentioned above; (b) many cases have been improperly filed against one of our subsidiaries; (c) in many cases the plaintiffs have been unable to establish any causal relationship to us or our products or premises; (d) in many cases, the plaintiffs have been unable to demonstrate that they have suffered any identifiable injury or compensable loss at all or that any injuries that they have incurred did in fact result from alleged exposure to asbestos; and (e) the complaints assert claims against multiple defendants and, in most cases, the damages alleged are not attributed to individual defendants. Additionally, we do not believe that the amounts claimed in any of the asbestos cases are meaningful indicators of our potential exposure because the amounts claimed typically bear no relation to the extent of the plaintiff's injury, if any.
Our cost of defending these lawsuits has not been material to date and, based upon available information, our management does not expect its future costs for asbestos-related lawsuits to have a material adverse effect on our results of operations, liquidity or financial position.
There have been no material changes in the risk factors previously disclosed in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024. Investors should not interpret the disclosure of any risk factor to imply that the risk has not already materialized.
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| Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds |
The table below summarizes the information regarding our repurchases of the Company's common stock during the quarter ended June 30, 2025.
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| Period | | Total Number of Shares Purchased | | Average Price Paid Per Share | | Total Number of Shares Purchased as Part of Publicly Announced Plans (1) | | Maximum Number of Shares That May Yet Be Purchased Under the Plans or Program (1) |
| April 1 — April 30, 2025 | | — | | (2) | | | — | | | 443,207 | |
| May 1 — May 31, 2025 | | 32,415 | | (2) | $ | 18.32 | | | — | | | 443,207 | |
| June 1 — June 30, 2025 | | 51,977 | | (2) | 17.62 | | | — | | | 443,207 | |
| Total | | 84,392 | | | $ | 17.89 | | | — | | | 443,207 | |
(1)On March 11, 2020, we announced a share repurchase program whereby we may repurchase up to 1.0 million shares of our outstanding common stock.
(2)Consists of an aggregate total of 84,392 shares of common stock we acquired from recipients of restricted stock awards at the time of vesting of such awards in order to settle recipient withholding tax liabilities.
During the quarter ended June 30, 2025, no director or officer (as defined in Rule 16a-1(f) promulgated under the Exchange Act) of the Company adopted or terminated a “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement” (as each term is defined in Item 408 of Regulation S-K).
The following exhibits are included herein:
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| 31.1 | Principal Executive Officer’s Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | |
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| 31.2 | Principal Financial Officer’s Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | |
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| 32 | Certification requirement under Section 906 of the Sarbanes-Oxley Act of 2002 | |
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| 101.INS | Inline XBRL Instance Document | |
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| 101.SCH | Inline XBRL Taxonomy Extension Schema Document | |
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| 101.CAL | Inline XBRL Taxonomy Extension Calculation Linkbase Document | |
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| 101.DEF | Inline XBRL Taxonomy Extension Definition Linkbase Document | |
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| 101.LAB | Inline XBRL Taxonomy Extension Label Linkbase Document | |
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| 101.PRE | Inline XBRL Taxonomy Extension Presentation Linkbase Document | |
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| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) | |
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.
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| PARK-OHIO HOLDINGS CORP. |
| (Registrant) |
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| By: | /s/ Patrick W. Fogarty |
| Name: | Patrick W. Fogarty |
| Title: | Vice President and Chief Financial Officer
(Principal Financial and Accounting Officer) |
Date: August 7, 2025
