ParkOhio(US:PKOH)2025-05-07 19:05Financial Performance - Net sales decreased by 2.9% to $405.4 million in Q1 2025 compared to $417.6 million in Q1 2024, primarily due to lower demand in Supply Technologies and Assembly Components segments [72]. - Operating income fell by 21.3% to $18.9 million in Q1 2025 from $24.0 million in Q1 2024, reflecting lower sales levels [71]. - SG&A expenses increased by 2.3% to $48.2 million in Q1 2025, representing 11.9% of net sales compared to 11.3% in Q1 2024, driven by inflation and higher employee costs [75]. - The Supply Technologies segment reported a 4.6% decrease in net sales to $187.8 million in Q1 2025, with segment operating income down by $1.7 million [81]. - The Assembly Components segment experienced a 9.6% decline in net sales to $96.9 million in Q1 2025, with operating income decreasing by $3.3 million [83]. - The Engineered Products segment saw a 6.3% increase in net sales to $120.7 million in Q1 2025, with operating income rising by $0.3 million [85]. Cash Flow and Liquidity - Cash used in operating activities was $10.0 million in Q1 2025, a decrease from cash generated of $2.3 million in Q1 2024, due to higher working capital needs [88]. - As of March 31, 2025, the company had total liquidity of $209.5 million, which included $54.5 million in cash and cash equivalents and $155.0 million of unused borrowing availability under credit agreements [95]. - The company had net debt borrowings of $22.1 million during the three months ended March 31, 2025, compared to $27.5 million in the same period of 2024 [91]. - The company had cash and cash equivalents held by foreign subsidiaries of $44.2 million at March 31, 2025, showing a slight increase from $43.4 million at December 31, 2024 [96]. - The company expects its existing financial resources and anticipated cash flow from operations to be adequate to meet cash requirements for at least the next twelve months [94]. - The company does not expect restrictions on repatriation of cash held outside the U.S. to materially affect its overall liquidity [96]. Capital Expenditures and Investments - Capital expenditures were $9.5 million in Q1 2025, aimed at increasing capacity for future growth in Engineered Products and Assembly Components segments [89]. Tax and Pension - The effective income tax rate for Q1 2025 was 20%, down from 25% in Q1 2024, primarily due to federal research and development tax credits [79]. - Other components of pension and OPEB income increased to $1.8 million in Q1 2025 from $1.3 million in Q1 2024, attributed to lower net actuarial losses [77]. Dividends and Financial Agreements - The company declared and paid dividends totaling $1.8 million during the three months ended March 31, 2025, with a quarterly dividend of $0.125 per common share declared on April 17, 2025 [105]. - The company’s calculated availability under the Credit Agreement was $118.0 million as of March 31, 2025, indicating compliance with financial covenants [101]. - The company has the option to increase the availability under its revolving credit facility by an aggregate incremental amount up to $70.0 million [99]. Interest Rates and Financial Impact - A 100-basis-point increase in interest rates would have resulted in an increase in interest expense of approximately $0.7 million during the three-month period ended March 31, 2025 [112]. - The company had finance leases totaling $15.7 million as of March 31, 2025 [100].