ParkOhio(PKOH) - 2025 Q1 - Quarterly Results

Financial and Operational Highlights ParkOhio reported resilient Q1 2025 results despite lower revenue, with a rebound beginning in its Engineered Products Group Q1 2025 Key Financial Metrics vs. Q1 2024 | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net Sales | $405M | $418M | | GAAP EPS from continuing operations | $0.61 | $0.83 | | Adjusted EPS from continuing operations | $0.66 | $0.85 | | Income from continuing operations (PKOH shareholders) | $8.5M | $10.6M | | EBITDA, as defined | $34M | $38M | - The CEO highlighted the strength of the company's diversity in products, end markets, and geographies, with an anticipated rebound in the Engineered Products Group throughout 2025[2] - The company expects to offset potential tariff costs through supply chain and commercial solutions and notes that many North American businesses may benefit from shifting customer supply chains[2] Segment Performance Segment performance was mixed in Q1 2025, with sales declines in two segments offset by growth in Engineered Products Supply Technologies Supply Technologies' net sales decreased due to reduced demand in several key markets, slightly compressing its operating margin Supply Technologies Performance (Q1 2025 vs. Q1 2024) | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net Sales | $187.8M | $196.9M | | Operating Income | $17.8M | $19.5M | | Operating Margin | 9.5% | 9.9% | - The sales decrease was driven by lower demand in powersports, industrial equipment, and electrical equipment markets, while demand increased in heavy-duty truck, semiconductor equipment, and consumer electronics[6] Assembly Components The Assembly Components segment saw lower sales and operating income due to reduced volumes and unfavorable pricing changes Assembly Components Performance (Q1 2025 vs. Q1 2024) | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net Sales | $96.9M | $107.2M | | Operating Income | $5.3M | $8.6M | | Operating Margin | 5.5% | 8.0% | - Reasons for the sales decline include lower unit volumes in fuel rail and extruded rubber, customer delays on new business, and the end of favorable pricing on certain legacy programs in 2024[9] Engineered Products Engineered Products delivered strong sales growth driven by its industrial equipment business, boosting its adjusted operating income Engineered Products Performance (Q1 2025 vs. Q1 2024) | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net Sales | $120.7M | $113.5M | | Operating Income | $3.8M | $3.5M | | Adjusted Operating Income | $4.6M | $3.8M | - The segment's growth was driven by the industrial equipment business, with new equipment sales up 12% and aftermarket sales up 5%[10] - New equipment backlog stood at $136 million at the end of Q1 2025, down from $145 million at the end of 2024[10] Cash Flow and Liquidity The company used cash from operations in Q1 2025 due to higher accounts receivable but maintained a strong overall liquidity position Cash Flow Summary (Q1 2025 vs. Q1 2024) | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Operating Cash Flow | ($10.0M) | $2.3M | | Capital Expenditures | $9.5M | $5.8M | | Free Cash Flow | ($19.5M) | ($3.5M) | - Total liquidity was $209.5 million as of March 31, 2025, comprising $54.5 million in cash and $155.0 million in unused borrowing availability[12] 2025 Outlook ParkOhio reaffirmed its full-year 2025 guidance, acknowledging macroeconomic uncertainty but expecting to benefit from sourcing trends Full-Year 2025 Guidance | Metric | Guidance Range | | :--- | :--- | | Net Sales | $1.6B - $1.7B | | Adjusted EPS | $3.00 - $3.50 | - The company is working to mitigate the impact of added costs from tariffs and believes many of its businesses are positioned to benefit from localized sourcing back into the United States[14] - Free cash flow is expected to improve year over year in 2025[14] Financial Statements This section presents the unaudited condensed consolidated financial statements for the three months ended March 31, 2025 and 2024 Condensed Consolidated Statements of Income The company reported lower net sales and operating income in Q1 2025 compared to the prior-year period Condensed Consolidated Statements of Income (Unaudited) | (In millions, except per share data) | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :--- | :--- | :--- | | Net sales | $405.4 | $417.6 | | Operating income | $18.9 | $24.0 | | Income from continuing operations | $7.8 | $10.1 | | Net income attributable to PKOH shareholders | $8.3 | $9.6 | | Diluted EPS (Continuing operations) | $0.61 | $0.83 | | Diluted EPS (Total) | $0.60 | $0.75 | | Dividends per common share | $0.125 | $0.125 | Condensed Consolidated Balance Sheets Total assets and liabilities increased as of March 31, 2025, driven by higher accounts receivable and long-term debt Condensed Consolidated Balance Sheets (In millions) | | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | ASSETS | | | | Total current assets | $870.0 | $836.0 | | Total assets | $1,411.8 | $1,365.1 | | LIABILITIES AND SHAREHOLDERS' EQUITY | | | | Total current liabilities | $360.8 | $361.1 | | Long-term debt | $642.1 | $618.3 | | Total liabilities | $1,057.0 | $1,028.0 | | Total equity | $354.8 | $337.1 | | Total liabilities and shareholders' equity | $1,411.8 | $1,365.1 | Condensed Consolidated Statements of Cash Flows The company used cash in operating activities and saw a net increase in cash due to financing activities in Q1 2025 Condensed Consolidated Statements of Cash Flows (In millions) | Three Months Ended March 31, | 2025 | 2024 | | :--- | :--- | :--- | | Net cash (used in) provided by operating activities | ($10.0) | $2.3 | | Net cash used in investing activities | ($9.5) | ($16.8) | | Net cash provided by financing activities | $20.3 | $25.8 | | Increase in cash and cash equivalents | $1.4 | $6.8 | | Cash and cash equivalents at end of period | $54.5 | $61.6 | Business Segment Information This table details the net sales and operating income performance for each of the company's three business segments Segment Operating Income (Loss) (In millions) | Three Months Ended March 31, | Supply Technologies | Assembly Components | Engineered Products | Corporate | Total | | :--- | :--- | :--- | :--- | :--- | :--- | | 2025 | | | | | | | Net Sales | $187.8 | $96.9 | $120.7 | - | $405.4 | | Operating Income (Loss) | $17.8 | $5.3 | $3.8 | ($8.0) | $18.9 | | 2024 | | | | | | | Net Sales | $196.9 | $107.2 | $113.5 | - | $417.6 | | Operating Income (Loss) | $19.5 | $8.6 | $3.5 | ($7.6) | $24.0 | Non-GAAP Financial Measures This section provides reconciliations for non-GAAP measures like Adjusted Earnings and EBITDA to their comparable GAAP figures Reconciliation of Adjusted Earnings Adjusted earnings from continuing operations were $9.3 million in Q1 2025 after excluding special charges Reconciliation to Adjusted Earnings (In millions, except EPS) | | Q1 2025 Earnings | Q1 2025 Diluted EPS | Q1 2024 Earnings | Q1 2024 Diluted EPS | | :--- | :--- | :--- | :--- | :--- | | GAAP Income from continuing operations | $8.5 | $0.61 | $10.6 | $0.83 | | Restructuring & other special charges | $1.0 | $0.07 | $0.3 | $0.03 | | Tax effect of adjustments | ($0.2) | ($0.02) | ($0.1) | ($0.01) | | Adjusted Earnings | $9.3 | $0.66 | $10.8 | $0.85 | Reconciliation of EBITDA, as defined EBITDA, as defined by the company's credit facility, decreased to $33.9 million in Q1 2025 from $37.8 million in Q1 2024 Reconciliation to EBITDA, as defined (In millions) | | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :--- | :--- | :--- | | Income from continuing operations (PKOH shareholders) | $8.5 | $10.6 | | Interest expense, net | $11.0 | $11.9 | | Income tax expense | $1.9 | $3.3 | | Depreciation and amortization | $8.3 | $8.4 | | Other adjustments | $4.2 | $3.6 | | EBITDA, as defined | $33.9 | $37.8 | Reconciliation of Adjusted Segment Operating Income Total adjusted operating income was $19.9 million in Q1 2025, with adjustments made to two of the three segments Adjusted Segment Operating Income (In millions) | Q1 2025 | As Reported | Adjustments | As Adjusted | | :--- | :--- | :--- | :--- | | Supply Technologies | $17.8 | $— | $17.8 | | Assembly Components | $5.3 | $0.2 | $5.5 | | Engineered Products | $3.8 | $0.8 | $4.6 | | Corporate | ($8.0) | $— | ($8.0) | | Total | $18.9 | $1.0 | $19.9 | Reconciliation of Free Cash Flow Free cash flow was a use of $19.5 million in Q1 2025, a larger use than the prior-year period due to higher capex Reconciliation to Free Cash Flow (In millions) | | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :--- | :--- | :--- | | Net cash (used in) provided by operating activities | ($10.0) | $2.3 | | Less: purchases of property plant and equipment | ($9.5) | ($5.8) | | Free cash flow | ($19.5) | ($3.5) |