ParkOhio(US:PKOH)2021-05-05 17:36Financial Performance - Net sales decreased by 1.8% to $359.6 million in Q1 2021 compared to $366.3 million in Q1 2020, primarily due to lower customer demand in the Engineered Products segment [89]. - Gross profit for Q1 2021 was $52.0 million, with a gross margin of 14.5%, down from $53.9 million and 14.7% in Q1 2020 [88][92]. - SG&A expenses were $39.7 million, or 11.0% of net sales, in Q1 2021, a decrease of 2.9% from $40.9 million, or 11.2% of net sales, in Q1 2020 [93]. - The Engineered Products segment experienced a 22.0% decline in net sales to $75.9 million in Q1 2021, attributed to lower demand in key markets such as oil and gas and aerospace [102]. - The Assembly Components segment reported net sales of $126.0 million in Q1 2021, a decrease of 1.7% from $128.2 million in Q1 2020, returning to pre-pandemic demand levels [100]. - The Supply Technologies segment saw net sales increase by 12.0% to $157.7 million in Q1 2021, driven by higher demand in truck-related markets, which rose by 26% year-over-year [98]. Net Income and Tax - Net income attributable to Park-Ohio Holdings Corp. common shareholders increased to $5.5 million in Q1 2021, compared to $1.2 million in Q1 2020, reflecting a 358.3% increase [88]. - The effective income tax rate for Q1 2021 was 26%, significantly lower than the 81% rate in Q1 2020, due to changes in income mix and foreign tax considerations [96]. Cash Flow and Liquidity - Operating activities generated net cash of $9.9 million in Q1 2021, an increase of $13.8 million compared to a net cash usage of $3.9 million in Q1 2020 [105]. - Total liquidity as of March 31, 2021, was $264.4 million, including $205.5 million of unused borrowing availability and $58.9 million in cash and cash equivalents [111]. - Cash and cash equivalents held by foreign subsidiaries increased to $48.1 million as of March 31, 2021, from $44.7 million at the end of 2020 [112]. - The company expects its existing financial resources and anticipated cash flow to be adequate for at least the next twelve months to meet operational and capital expenditure needs [110]. Debt and Interest - Interest expense decreased to $7.4 million in Q1 2021 from $8.0 million in Q1 2020, reflecting lower average borrowings and interest rates [95]. - Net debt borrowings amounted to $3.2 million in Q1 2021, down from $14.0 million in Q1 2020, which was used to fund various cash needs [108]. - A 100-basis-point increase in interest rates would have resulted in an additional interest expense of approximately $0.4 million for the three-month period ended March 31, 2021 [128]. Capital Expenditures and Investments - Capital expenditures were $6.6 million in Q1 2021, aimed at increasing capacity for future growth, compared to $3.5 million in Q1 2020 [107]. - The company acquired NYK Component Solutions Limited for $5.7 million, enhancing its Supply Technologies segment with complementary products [85]. Dividends and Financial Reporting - The company paid dividends of $1.6 million during Q1 2021, with a declared quarterly dividend of $0.125 per common share [121]. - The calculated availability under the Credit Agreement was $182.6 million as of March 31, 2021, indicating compliance with financial covenants [117]. - The company does not have off-balance sheet arrangements or relationships with unconsolidated entities, ensuring transparency in financial reporting [109].