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Core Viewpoint - Park-Ohio is focusing on long-term priorities such as asset allocation, durable growth, and deleveraging, while navigating demand volatility and investing in productivity improvements [2][3]. Financial Performance - Full-year 2025 sales were $1.6 billion, a decrease of 4% from 2024, with adjusted EPS falling to $2.70 from $3.59, although gross margin remained stable at 17% [4][12]. - Fourth-quarter cash flow was $49 million, with free cash flow of $36 million, enabling a $40 million reduction in long-term debt [9][6]. - For 2026, the company provided guidance for consolidated revenue of $1.675–1.71 billion (up 5–7%) and adjusted EPS of $2.90–3.20, with EBITDA projected at 8–9% of sales [5][15]. Operational Highlights - Management emphasized strong cost management and productivity improvements, which helped offset demand volatility and delayed new business launches [3][6]. - The company achieved record annual bookings of $217 million in the industrial equipment business, with a backlog of $180 million at the end of 2025, up 24% year over year [8][5]. Investment Strategy - More than a third of total capital spending was directed towards growth investments aimed at offerings with above-average margins and sustainable competitive advantages [2]. - Significant investments included over $12 million in information technology and the implementation of new ERP systems, as well as a new North American distribution center expected to be operational in 2026 [7]. Segment Performance - Supply Technologies reported fourth-quarter sales of $187 million, up from $182 million, with operating income increasing by 31% to $21 million [14]. - Assembly Components saw fourth-quarter sales rise to $92 million from $90 million, while Engineered Products maintained stable sales of approximately $116 million [14]. Market Exposure - Automotive remains the largest market for the company, now representing about 20% of the business, with no single end market beyond automotive exceeding 15% of revenue [19]. - The company continues to focus on markets such as heavy-duty truck, semiconductor, and electrical, while maintaining a presence in China [19].

Financial Performance - For the year ended December 31, 2025, Park-Ohio Holdings Corp. reported net sales of $747.5 million in Supply Technologies, $380.6 million in Assembly Components, and $471.0 million in Engineered Products[15]. - Net sales decreased by 3.4% to $1,599.1 million in 2025 from $1,656.2 million in 2024, primarily due to lower customer demand across all business segments[123]. - Cost of sales also decreased by 3.4% to $1,327.9 million in 2025 compared to $1,374.8 million in 2024, maintaining a gross margin of 17.0% in both years[124]. - SG&A expenses increased to $189.6 million in 2025, representing 11.9% of net sales, up from $187.4 million or 11.3% in 2024, driven by inflation and higher employee costs[125]. - Income from continuing operations attributable to common shareholders was $24.8 million in 2025, down 41% from $42.2 million in 2024[122]. - In the Supply Technologies segment, net sales decreased by 3.6% to $747.5 million in 2025, with segment operating income at $72.3 million[135][137]. - The Assembly Components segment saw net sales decline by 4.5% to $380.6 million in 2025, with operating income dropping to $19.1 million[138][140]. - Engineered Products segment net sales decreased by 2.2% to $481.7 million in 2025, with operating income significantly reduced to $6.6 million[141][143]. Customer and Market Insights - Approximately 56% of Supply Technologies' net sales were to domestic customers, with the top five customers accounting for approximately 36% of sales in 2025[17]. - Assembly Components generated approximately 61% of its net sales from domestic customers, with the top five customers representing about 53% of segment sales in 2025[22]. - Engineered Products had approximately 57% of its net sales from domestic customers, serving industries such as automotive, construction equipment, and oil and gas[26]. - The company derived 32% and 7% of its net sales from the automotive and heavy-duty truck industries for the year ended December 31, 2025[53]. - The ten largest customers accounted for approximately 25% of the company's net sales for the year ended December 31, 2025[56]. Operational Structure - The Supply Technologies segment operates around 80 logistics service centers globally, including locations in the United States, Mexico, and Europe[17]. - Assembly Components operates 11 manufacturing facilities and three technical offices across the United States, Mexico, China, the United Kingdom, and the Czech Republic[21]. - The company employed approximately 6,300 people as of December 31, 2025, with about 20% covered by collective bargaining agreements[37]. - The company operates numerous manufacturing and supply chain logistics facilities across 28 states in the U.S. and internationally, indicating a broad operational footprint[100]. Financial Position and Debt - As of December 31, 2025, cash and cash equivalents were $44.8 million, down from $53.1 million in 2024, with total liquidity of $204.2 million[151]. - The company had gross debt of $635.7 million as of December 31, 2025, with net debt as a percentage of capitalization at 58%[151]. - The company completed the sale of $350.0 million aggregate principal amount of the 2030 Notes on July 31, 2025, to redeem the 2027 Notes[154]. - The company’s calculated availability under the Credit Agreement was $126.1 million as of December 31, 2025, indicating compliance with financial covenants[159]. - The Company had borrowings of $257.4 million under a floating rate revolving credit facility, with a potential increase in interest expense of approximately $2.6 million for a 100-basis point rise in interest rates[189]. Risks and Challenges - The company faces significant risks from economic conditions, including inflation and tariffs, which could adversely affect its financial condition and results of operations[51][52]. - The company relies on third-party suppliers for substantially all of its component parts, exposing it to risks of price fluctuations and delivery delays[59]. - Labor shortages have led to increased labor costs and production inefficiencies, adversely affecting business operations and financial condition[75]. - The company is exposed to potential product liability risks, which could adversely impact financial condition and operations if claims arise[77]. - The company recognizes cybersecurity threats and incidents as a risk, with no material cybersecurity events identified in 2025 that affected business strategy or financial condition[67]. - The introduction of AI technologies may present compliance and reputational risks, potentially leading to liabilities and inaccuracies in outputs[68]. - The company is subject to significant environmental, health, and safety laws, with compliance requiring substantial expenditures and potential liabilities[84]. - International operations expose the company to risks from political and economic instability, trade regulations, and compliance with anti-bribery laws[79]. Compliance and Governance - The company is focused on regulatory compliance and employee safety, which are critical to its operational success[39]. - The company has a strong commitment to ethics and compliance, with a Code of Business Conduct guiding employee behavior[40]. - The company is dedicated to training and talent development, with various programs aimed at accelerating future leaders[42]. - The Company is involved in various legal proceedings, including approximately 116 asbestos-related cases, but management believes these will not materially affect its financial condition[106][109]. - The Company has established a valuation allowance for certain deferred tax assets when it is more likely than not that they will not be realized, based on factors such as future taxable income and tax planning strategies[178]. Goodwill and Impairment - As of December 31, 2025, the company reported goodwill of $115.8 million, which may be subject to impairment charges affecting financial results[70]. - The company's annual goodwill impairment analysis confirmed that estimated fair values exceeded carrying values, with no impairment as of October 1 for 2025, 2024, and 2023[173]. - Goodwill impairment assessment involved complex valuation methodologies, including discounted cash flow and guideline public company methods[202]. - Sensitivity analyses were performed on inputs, including WACC, to evaluate changes in fair value of reporting units[202]. Cash Flow and Capital Expenditures - Operating cash flow in 2025 was $42.3 million, an increase from $35.0 million in 2024, attributed to lower working capital needs despite lower profitability[145]. - Capital expenditures rose to $40.3 million in 2025 from $31.4 million in 2024, primarily for growth initiatives and maintaining existing operations[146]. - Cash provided by financing activities in 2025 included net debt borrowings of $6.7 million and cash dividend payments totaling $7.8 million[148]. Dividends and Share Repurchase - The company reported a total of 2,853 shares repurchased during the fourth quarter of 2025 at an average price of $20.68 per share[114]. - A quarterly dividend of $0.125 per common share was declared on January 26, 2026, resulting in cash payments of $1.8 million[120]. - The company paid dividends totaling $7.2 million during 2025, with a quarterly dividend of $0.125 per common share declared on January 26, 2026[161].

Financial Data and Key Metrics Changes - The company achieved fourth quarter net sales of $395 million, a 2% increase year-over-year, driven by higher sales in Supply Technologies and Assembly Components segments [16] - Full-year sales totaled $1.6 billion, a decline of 4% from 2024 levels, primarily due to lower demand in North American industrial end markets [17] - Fourth quarter gross margin improved to 17.3%, up 70 basis points year-over-year, while full-year gross margins remained stable at 17% [17][18] - Adjusted earnings per share for the fourth quarter was $0.65, down from $0.67 in the previous year, with full-year adjusted earnings per share at $2.70 compared to $3.59 in 2024 [18] Business Line Data and Key Metrics Changes - In Supply Technologies, fourth quarter sales were $187 million, up from $182 million in 2024, with operating income increasing 31% to $21 million [19] - Assembly Components segment saw fourth quarter sales of $92 million, a 2% increase from $90 million, with adjusted operating income stable at approximately $4 million [20] - Engineered Products segment reported fourth quarter sales of approximately $116 million, stable year-over-year, with full-year sales at $471 million, down from $482 million in 2024 [22] Market Data and Key Metrics Changes - Demand in power sports, industrial equipment, and heavy-duty truck end markets is expected to recover in 2026, with continued sales growth from electrical distribution customers supporting AI data center expansion [13] - The company anticipates consolidated revenues to grow to $1.675-1.71 billion in 2026, representing a 5-7% increase over 2025 [12] Company Strategy and Development Direction - The company is focusing on long-term goals regarding asset allocation, durable growth, and deleveraging, with significant investments in automation and information technology [3][8] - Growth capital investment represented more than a third of total capital expense, aimed at products and services with above-average margins and sustainable competitive advantages [7] - The company is committed to improving productivity and lowering costs through automation and vertical integration [6] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about returning to growth in 2026, despite previous volatility in demand due to tariffs and economic uncertainty [24] - The company is confident in its ability to manage cash flow better in 2026, aided by improved visibility and productivity tools [40] - Management highlighted the importance of better throughput in production to drive profitability and the potential for upside in 2026 guidance [80] Other Important Information - The company refinanced $350 million in senior notes and amended its revolving credit agreement to extend the maturity date by five years, enhancing its capital structure [9] - Investments of over $12 million in information technology were made during the year, with new ERP systems being implemented [10] Q&A Session Summary Question: Can you elaborate on the assumptions for price versus volume in the sales growth guidance? - Management indicated that the majority of the expected growth in 2026 will come from production volume increases, with pricing increases being a smaller component [30] Question: What are the expectations for sales growth by segment? - Management refrained from commenting on individual segments but noted that growth is expected across the board, with Engineered Products anticipated to reach record sales levels [35] Question: What gives confidence in the free cash flow guidance of $20-30 million? - Management cited improved visibility and better management of working capital as key factors contributing to confidence in achieving the free cash flow target [38] Question: What are the top end markets for the company? - The top markets include automotive, heavy-duty truck, semiconductor, power sports, and AI data center-related sectors, with no single market dominating revenues [66] Question: How did China perform last year? - China remains a good market, with the company focusing on successful products and services, generating cash and maintaining accretive margins [70]

Financial Data and Key Metrics Changes - The company achieved fourth quarter net sales of $395 million, a 2% year-over-year increase, driven by higher sales in Supply Technologies and Assembly Components segments [16] - Full-year sales totaled $1.6 billion, a decline of 4% from 2024 levels, primarily due to lower demand in North American industrial end markets [17] - Fourth quarter gross margin improved to 17.3%, up 70 basis points year-over-year, while full-year gross margins remained stable at 17% [17][18] - Adjusted earnings per share for the fourth quarter was $0.65, down from $0.67 in the previous year, with full-year adjusted earnings per share at $2.70 compared to $3.59 in 2024 [18] Business Line Data and Key Metrics Changes - In Supply Technologies, fourth quarter sales were $187 million, up from $182 million in 2024, with operating income increasing 31% to $21 million [19] - Assembly Components segment saw fourth quarter sales of $92 million, a 2% increase from $90 million, with full-year sales at $381 million, down from $399 million [20] - Engineered Products segment reported fourth quarter sales of approximately $116 million, stable year-over-year, with full-year sales at $471 million, down from $482 million [22] Market Data and Key Metrics Changes - Demand in power sports, industrial equipment, and heavy-duty truck end markets is expected to recover in 2026, with continued sales growth from electrical distribution customers supporting AI data center expansion [13] - The company anticipates record revenues in the Engineered Products segment in 2026, driven by strong new equipment backlogs in oil and gas, steel, and aerospace markets [14] Company Strategy and Development Direction - The company is focusing on long-term goals regarding asset allocation, durable growth, and deleveraging, with significant investments in automation and information technology [3][8] - Growth capital investment represented more than a third of total capital expenses, targeting products and services with above-average margins and sustainable competitive advantages [7] - The company is committed to improving productivity and lowering costs through automation and vertical integration [6][10] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about returning to growth in 2026, despite previous volatility in demand due to tariffs and economic uncertainty [25] - The company expects consolidated revenues to grow to $1.675 billion-$1.71 billion in 2026, with adjusted earnings per share projected to increase to $2.90-$3.20 [12] - Management highlighted the importance of better visibility in planning for 2026, with expectations for improved cash flow and reduced working capital needs [40][44] Other Important Information - The company refinanced $350 million in senior notes and amended its revolving credit agreement to extend the maturity date by five years, providing a solid capital structure for future growth [9] - Significant investments in information technology and new ERP systems are expected to yield benefits in lower working capital levels and improved operational efficiency [10] Q&A Session Summary Question: Can you elaborate on the assumptions for price versus volume in the sales growth guidance? - Management indicated that the majority of the expected growth in 2026 will come from production volume increases, with pricing increases primarily in the Assembly Components group [31] Question: What are the expected improvements in gross margin by business segment? - Management refrained from providing specific guidance on segment profitability but expects improved flow-through in each business segment based on increased revenue [32] Question: What gives you confidence in the free cash flow guidance for 2026? - Management cited better visibility and improved management of working capital as key factors contributing to confidence in achieving the $20 million-$30 million free cash flow guidance [40][44] Question: Can you provide insights on the record backlog in Engineered Products? - Management noted that the backlog reflects strong demand across various industrial segments, including data centers and AI, with no unusual burn rate expected [52] Question: What are the top end markets for the company? - The top markets include automotive, heavy-duty truck, semiconductor, power sports, and AI data centers, with no single market dominating revenues [70] Question: How did China perform last year compared to previous years? - Management reported that China remains a good market, focusing on generating cash and serving global partnerships, despite the challenges of doing business there [73]

Financial Data and Key Metrics Changes - The company achieved consolidated fourth quarter net sales of $395 million, representing a 2% year-over-year increase, driven by higher sales in the Supply Technologies and Assembly Components segments [16] - Full-year sales totaled $1.6 billion, a decline of 4% from 2024 levels, primarily due to lower demand in North American industrial end markets [17] - Fourth quarter gross margin improved to 17.3%, up 70 basis points year-over-year, while full-year gross margins remained stable at 17% [17][18] - Adjusted earnings per share for the fourth quarter was $0.65, down from $0.67 in the same period last year, with full-year adjusted earnings per share at $2.70 compared to $3.59 in 2024 [18] Business Line Data and Key Metrics Changes - In the Supply Technologies segment, fourth quarter sales increased to $187 million from $182 million, with operating income rising 31% to $21 million [19] - Assembly Components segment saw fourth quarter sales of $92 million, up 2% from $90 million, with adjusted operating income stable at approximately $4 million [20] - Engineered Products segment reported fourth quarter sales of approximately $116 million, stable year-over-year, with full-year sales at $471 million, down from $482 million in 2024 [22] Market Data and Key Metrics Changes - Demand in power sports, industrial equipment, and heavy-duty truck end markets is expected to recover in 2026, contributing to sales growth [13] - The company anticipates continued strong growth from semiconductor, aerospace, defense, and agriculture end markets [13] - The Engineered Products segment is expected to see record revenues in 2026, driven by strong new equipment backlogs and aftermarket demand [14] Company Strategy and Development Direction - The company is focusing on long-term goals regarding asset allocation, durable growth, and deleveraging, with significant investments in automation and information technology [3][4] - Growth capital investment represented more than a third of total capital expenses, targeting products and services with above-average margins [4] - The company is committed to improving productivity and lowering costs through automation and vertical integration [6] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about returning to growth in 2026, despite previous demand volatility due to tariffs and economic uncertainty [25] - The company expects consolidated revenues to grow to $1.675 billion-$1.71 billion in 2026, driven by sales growth across all business segments [12] - Management highlighted the importance of improved visibility and better management of working capital as key factors for future cash flow generation [40][41] Other Important Information - The company refinanced $350 million in senior notes and amended its revolving credit agreement, providing a capital structure to support future sales growth [9] - Investments of over $12 million in information technology were made during the year, with new ERP systems being implemented [10] - The company achieved record annual bookings of $217 million in its industrial equipment business, including a significant order from a leading steel producer [11] Q&A Session Summary Question: Can you elaborate on the assumptions for price versus volume in the sales growth guidance? - Management indicated that approximately 75% of the expected growth in 2026 will come from production volume increases, with price increases primarily in the Assembly Components group [31] Question: What are the expected improvements in gross margin by business segment? - Management refrained from providing specific guidance but expects improved flow-through in each business segment based on increased revenue [32] Question: What is the confidence level in the free cash flow guidance of $20 million-$30 million? - Management expressed confidence due to better visibility in demand and improved management of working capital, anticipating lower working capital usage relative to sales increases [39][43] Question: Can you provide insights on the record backlog in Engineered Products? - Management noted that the backlog reflects strong demand across various industrial segments, including data centers and AI, with no unusual burn rate expected [51][52] Question: What are the top end markets for the company? - The top markets include automotive, heavy-duty truck, semiconductor, power sports, and AI data centers, with no single market dominating revenues [70] Question: How did China perform last year compared to the previous year? - Management reported that China remains a good market, focusing on generating cash and serving global partnerships, despite the competitive landscape [74]

Park-Ohio Holdings Corp. Fourth Quarter and Full Year 2025 Earnings Call Presentation March 5, 2026 Forward-Looking Statements and Non-GAAP Measures These slides contain 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 expre ...

Revenue and Sales Performance - Revenue for Q4 2025 was $395.0 million, a 2% increase from $388.4 million in Q4 2024[6] - Full year 2025 revenue was $1.6 billion, down from $1.7 billion in 2024, with a GAAP EPS of $1.77 and an Adjusted EPS of $2.70[15] - The company expects net sales for 2026 to be between $1.675 billion and $1.710 billion, representing a 5% to 7% increase over 2025[15] - Supply Technologies segment revenue increased by 3% to $187.1 million, with operating margins improving by 240 basis points to 11.1%[6] - Engineered Products segment recorded $116.3 million in revenue, with a backlog of $180 million, up 24% from year-end 2024[7] - For the three months ended December 31, 2025, net sales reached $395.0 million, an increase from $388.4 million in the same period of 2024, representing a growth of 1.7%[30] Earnings and Profitability - GAAP EPS from continuing operations was $0.11, with an Adjusted EPS of $0.65, reflecting non-cash asset impairment charges of $8.9 million[6] - Adjusted earnings from continuing operations for Q4 2025 were $9.0 million, or $0.65 per share, compared to $9.3 million, or $0.67 per share in Q4 2024[21] - The operating income for the year ended December 31, 2025, was $66.3 million, compared to $86.6 million in 2024, indicating a decrease of 23.4%[31] - The company reported a loss from continuing operations before income taxes of $1.1 million for the three months ended December 31, 2025, compared to income of $4.4 million in the same period of 2024[30] - For the year ended December 31, 2025, adjusted operating income reached $81.6 million, a decrease from $94.0 million in 2024, indicating a decline of about 13.2%[34] Cash Flow and Financial Position - Operating cash flow was $49 million, and free cash flow was $36 million, with a reduction of $40 million in borrowings under the revolving credit facility during the quarter[6] - Free cash flow for 2026 is anticipated to be between $20 million and $30 million[15] - Free cash flow for Q4 2025 was reported at $36.0 million, derived from net cash provided by operating activities of $48.7 million after deducting $12.7 million for property, plant, and equipment purchases[34] - The company reported a net cash provided by operating activities from continuing operations of $48.7 million for the three months ended December 31, 2025, up from $26.4 million in the same period of 2024[28] - Total cash and cash equivalents at the end of the year were $44.8 million, down from $53.1 million at the end of 2024, reflecting a decrease of 15.5%[28] Asset and Liability Management - Total assets increased to $1,419.6 million in 2025 from $1,365.1 million in 2024, reflecting a growth of approximately 4.0%[27] - Total current assets rose to $852.5 million in 2025, up from $836.0 million in 2024, representing an increase of approximately 2.0%[27] - The company reported total current liabilities of $366.6 million in 2025, slightly higher than $361.1 million in 2024[27] - Long-term debt remained relatively stable at $620.7 million in 2025 compared to $618.3 million in 2024[27] Segment Performance - Supply Technologies segment reported an adjusted operating income of $73.7 million for 2025, slightly down from $75.2 million in 2024, a decrease of approximately 2.0%[34] - Assembly Components segment adjusted operating income was $21.9 million in 2025, down from $26.5 million in 2024, reflecting a decline of about 17.3%[34] - Engineered Products segment showed an adjusted operating income of $17.3 million for 2025, compared to $21.3 million in 2024, a decrease of approximately 18.8%[34] - Corporate segment reported an adjusted operating loss of $31.3 million in 2025, slightly worse than the loss of $29.0 million in 2024[34] Special Charges and Adjustments - The company incurred restructuring and other special charges of $1.3 million in Q4 2025, compared to $2.5 million in Q4 2024[21] - The tax effect of adjustments for Q4 2025 was $(1.4) million, compared to $(1.2) million in Q4 2024[21] - The company incurred asset impairment charges of $8.9 million in the year ended December 31, 2025, consistent with the previous year[31] - The company experienced a significant adjustment of $15.3 million in operating income for the year 2025, compared to $7.4 million in 2024, indicating increased adjustments year-over-year[34] Corporate Expenses and Interest - Corporate expenses for the year ended December 31, 2025, totaled $31.3 million, compared to $29.0 million in 2024, showing an increase of 7.9%[31] - Interest expense for the year ended December 31, 2025, was $47.5 million, compared to $47.4 million in 2024, indicating a marginal increase[31] Operational Efficiency - The company emphasizes the importance of free cash flow as a key performance measure, highlighting its utility in assessing operational efficiency[34] - The financial results indicate a focus on managing operating performance through adjusted metrics, which exclude certain non-cash items and infrequent charges[34]

Core Viewpoint - Park-Ohio Holdings Corp. considers 2025 a pivotal year for implementing its long-term strategy focused on reshaping its industrial portfolio and enhancing productivity [1] Group 1: Financial Results - The company announced its results for the fourth quarter and full year 2025 [1] Group 2: Strategic Focus - The long-term strategy is built around three core principles: reshaping the industrial portfolio, allocating capital towards productivity-enhancing tools, and driving durable growth and operating leverage [1]

Core Viewpoint - Park-Ohio Holdings Corp. (NASDAQ:PKOH) demonstrates resilience in financial performance with stable revenue and improved cash flow, despite facing modest revenue challenges in certain quarters [2][3][4]. Financial Performance - The consensus price target for PKOH has remained stable at $37 over the past month, quarter, and year, indicating consistent market confidence [2][6]. - In Q3 2025, PKOH reported stable results with consistent revenue and EBITDA, alongside improved cash flow, demonstrating strong operational discipline [3][6]. - In Q2 2025, PKOH showed margin expansion and earnings growth, despite modest revenue challenges, highlighting its ability to navigate a mixed industrial environment [4][6]. Segment Performance - The Engineered Products segment showed positive indicators of increased activity and backlog, contributing to the company's overall stability [4][5]. - The company's diverse product offerings and geographical reach, including operations in the United States, Europe, Asia, Mexico, and Canada, enhance its resilience [1][5]. Future Outlook - The company's forecast considers economic factors like tariffs, suggesting a cautious yet optimistic approach to future growth [5].