ParkOhio(US:PKOH)2024-04-30 19:40Financial Performance - Net sales decreased 1.4% to $417.6 million in Q1 2024 compared to $423.5 million in Q1 2023, primarily due to lower sales in the Engineered Products and Assembly Components segments [84]. - Cost of sales decreased 2.8% to $346.2 million in Q1 2024, resulting in a gross margin improvement to 17.1% from 15.9% in Q1 2023, driven by higher operating profit in the Supply Technologies segment [86]. - SG&A expenses increased by 4.0% to $47.1 million in Q1 2024, representing 11.3% of net sales compared to 10.7% in Q1 2023, attributed to ongoing inflation and higher employee costs [88]. - Operating income increased 18.8% to $24.0 million in Q1 2024, with income from continuing operations attributable to common shareholders rising 41.3% to $10.6 million [84]. Segment Performance - The Supply Technologies segment reported net sales of $196.9 million in Q1 2024, with segment operating income increasing to $19.5 million, reflecting a margin improvement to 9.9% [95]. - The Assembly Components segment's net sales decreased to $107.2 million in Q1 2024, but segment operating income improved 17.8% to $8.6 million [98]. - The Engineered Products segment experienced a 3.2% decrease in net sales to $113.5 million, with segment operating income declining to $3.5 million due to lower sales and higher operating costs [101]. Cash Flow and Capital Expenditures - Cash flow from operating activities increased to $2.3 million in Q1 2024 from $0.2 million in Q1 2023, driven by higher income from continuing operations [105]. - Capital expenditures were $5.8 million in Q1 2024, aimed at increasing capacity for future growth in the Engineered Products and Assembly Components segments [106]. - Capital expenditures were $6.0 million for the three months ended March 31, 2023, primarily for future growth capacity in Engineered Products and Assembly Components segments [107]. Liquidity and Debt - As of March 31, 2024, total liquidity was $167.5 million, including $61.6 million in cash and cash equivalents and $105.9 million in unused borrowing availability [112]. - Net debt borrowings of $27.5 million were made during the three months ended March 31, 2024, to fund the EMA acquisition and capital expenditures [108]. - The Company had finance leases totaling $15.5 million as of March 31, 2024 [117]. - The Company made net debt borrowings of $7.4 million during the three months ended March 31, 2023, to fund higher working capital levels [109]. Dividends and Interest Rates - The Company declared and paid dividends totaling $1.6 million during the three months ended March 31, 2024, with a quarterly dividend of $0.125 per common share declared on April 19, 2024 [121]. - 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, 2024 [128]. Credit Facilities - The Credit Agreement provides for a revolving credit facility of $405.0 million, with an option to increase availability by up to $70.0 million [116]. - The calculated availability under the Credit Agreement was $100.8 million as of March 31, 2024, indicating compliance with financial covenants [120]. Foreign Cash Holdings - Cash and cash equivalents held by foreign subsidiaries were $50.4 million at March 31, 2024, compared to $44.6 million at December 31, 2023 [113].