PARK OHIO HOLDINGS CORP

Previous wording

The factors explaining the changes in segment net sales for the three months ended March 31, 2025 compared to the corresponding 2024 period are contained in the “Segment Results” section below.

Current wording

The factors explaining the changes in segment net sales for the three months ended June 30, 2025 compared to the corresponding 2024 period are contained within the “Segment Results” section below.

Previous wording

During the first three months of 2025, the Company recorded $1.0 million in connection restructuring and other special charges, primarily in our Engineered Products segment.

Current wording

During the second quarter of 2024, the Company recorded charges of $1.2 million in connection with restructuring and other special charges, primarily in our Engineered Products segment.

Previous wording

Net sales decreased 2.9% to $405.4 million in the first three months of 2025 compared to $417.6 million in the same period in 2024. This decrease was primarily due to lower demand in our Supply Technologies and Assembly Components segments.

Current wording

Net sales decreased 5.3% to $805.5 million in the first six months of 2025 compared to $850.2 million in the same period in 2024. This decrease was primarily due to lower demand in our Supply Technologies and Assembly Components segments.

Previous wording

Cost of sales decreased to $337.3 million in the first three months of 2025 compared to $346.2 million in the same period in 2024, driven by the decrease in net sales described above. Gross margin was 16.8% in the 2025 period compared to 17.1% in the corresponding 2024 period. The year-over-year gross margin decrease was driven by the decrease in net sales described above.

Current wording

Cost of sales decreased to $669.2 million in the first six months of 2025 compared to $705.6 million in the same period in 2024, driven by the decrease in net sales described above. Gross margin was 16.9% in the 2025 period compared to 17.0% in the corresponding 2024 period. The year-over-year gross margin decrease was driven by the decrease in net sales described above, partially offset by cost-containment measures due to lower sales levels.

Previous wording

SG&A expenses were $48.2 million in the first three months of 2025, compared to $47.1 million in the same period in 2024, an increase of 2.3%. As a percentage of net sales, SG&A expenses were 11.9% in the first three months of 2025 compared to 11.3% in the comparable period in 2024. These increases were driven by ongoing inflation, higher employee costs and fixed SG&A costs over lower sales levels.

Current wording

SG&A expenses were $95.0 million in the first six months of 2025, compared to $94.5 million in the same period in 2024, an increase of 0.5%. As a percentage of net sales, SG&A expenses were 11.8% in the first six months of 2025 compared to 11.1% in the comparable period in 2024. These increases were driven by ongoing inflation, higher employee costs and fixed SG&A costs over lower sales levels.

Previous wording

During the first three months of 2024, the Company recorded acquisition-related charges of $0.3 in connection with the acquisition of EMA Indutec GmbH (“EMA”).

Current wording

During 2024, the Company recorded $1.2 million in connection restructuring and other special charges, primarily in our Engineered Products segment, as well as acquisition-related charges of $0.3 million in connection with the acquisition of EMA Indutec GmbH (“EMA”)

Previous wording

Other components of pension and OPEB income, net was $1.8 million in the first three months of 2025 compared to $1.3 million in the corresponding period in 2024. This increase was due to lower net actuarial losses impacting 2025 compared to 2024.

Current wording

Other components of pension and OPEB income, net was $3.6 million in the first six months of 2025 compared to $2.7 million in the corresponding period in 2024. This increase was due to lower net actuarial losses impacting 2025 compared to 2024.

Previous wording

Interest expense, net was $11.0 million in the first three months of 2025 compared to $11.9 million in the 2024 period. The decrease was due primarily to lower average outstanding debt balances and lower interest rates in the 2025 period compared to the same period a year ago.

Current wording

Interest expense, net was $22.2 million in the first six months of 2025 compared to $23.9 million in the 2024 period. The decrease was due primarily to lower interest rates and lower average outstanding debt balances in the 2025 period compared to the same period a year ago.

Previous wording

Net sales decreased 4.6% in the three months ended March 31, 2025 compared to the 2024 period due primarily to lower demand in certain end markets in North America, including power sports, agriculture and industrial equipment, and in our industrial supplies product lines. These decreases were partially offset by strong demand from the heavy-duty truck market, semiconductor equipment, consumer electronics, and aerospace and defense markets. Sales in our fastener manufacturing business were down 9% due to a slower start to the year, with improving sales in March, which were consistent with record sales in this business in the first quarter of 2024.

Current wording

Net sales decreased 7.7% in the three months ended June 30, 2025 compared to the 2024 period due primarily to lower customer demand in certain end markets in our supply chain business, including power sports, heavy duty truck and bus, industrial equipment and aerospace and defense, partially offset by increases in the electrical and semiconductor end markets. Sales in our fastener manufacturing business were down 10% year-over-year, driven by overall market softness.

Previous wording

Segment operating income in the 2025 period decreased by $3.3 million, and segment operating income margin decreased by 250 basis points compared to the corresponding period of 2024. The decrease in segment profitability in the 2025 period compared to the prior-year period was driven by the same factors impacting net sales.

Current wording

Segment operating income in the 2025 period decreased by $1.3 million, and segment operating income margin decreased by 80 basis points compared to the corresponding period of 2024. The decreases in operating income and margin in the second quarter of 2025 compared to the 2024 period were due to the lower unit volumes. The 2025 period also included $0.5 million of charges related to restructuring and other special charges.

Previous wording

In the three months ended March 31, 2025, we utilized cash of $10.0 million compared to generating cash of $2.3 million in the same period of 2024. Cash flow from operating activities was lower in 2025 due to higher working capital needs, primarily higher accounts receivable from higher sales in the first quarter of 2025 compared to the fourth quarter of 2024.

Current wording

In the six months ended June 30, 2025, we utilized cash of $23.7 million compared to $0.4 million in the same period of 2024. Cash flow from operating activities was lower in 2025 due to higher working capital needs, primarily higher accounts receivable and lower accrued expenses.

Previous wording

Capital expenditures were $9.5 million in the three months ended March 31, 2025 and were primarily to provide increased capacity for future growth in our Engineered Products and Assembly Components segments, to maintain existing operations and for information system implementations.

Current wording

Capital expenditures were $16.9 million in the six months ended June 30, 2025 and were primarily to provide increased capacity for future growth in our Engineered Products and Assembly Components segments, to maintain existing operations and for information system implementations.

Previous wording

Capital expenditures were $5.8 million in the three months ended March 31, 2024 and were primarily to provide increased capacity for future growth in our Engineered Products and Assembly Components segments, to maintain existing operations and for information system implementations. Additionally, during the three months ended March 31, 2024, the Company paid $11.0 million, net of cash acquired for the EMA acquisition.

Current wording

Capital expenditures were $13.2 million in the six months ended June 30, 2024 and were primarily to provide increased capacity for future growth in our Engineered Products and Assembly Components segments, to maintain existing operations and for information system implementations. Additionally, during the six months ended June 30, 2024, the Company paid $11.0 million, net of cash acquired for the EMA acquisition.

Previous wording

During the three months ended March 31, 2025, we had net debt borrowings of $22.1 million to fund capital expenditures and working capital needs. In addition, the Company made cash dividend payments to shareholders totaling $1.8 million.

Current wording

During the six months ended June 30, 2025, we had net debt borrowings of $36.7 million to fund capital expenditures and working capital needs. In addition, the Company made cash dividend payments to shareholders totaling $3.6 million.

Previous wording

During the three months ended March 31, 2024, we had net debt borrowings of $27.5 million to fund the EMA acquisition and capital expenditures. In addition, the Company made cash dividend payments to shareholders totaling $1.6 million.

Current wording

During the six months ended June 30, 2024, we had net debt borrowings of $41.7 million to fund capital expenditures and the EMA acquisition. In addition, in the six months ended June 30, 2024, the Company made scheduled payments related to prior acquisitions totaling $0.7 million and made cash dividend payments to shareholders totaling $3.3 million.

Previous wording

Our liquidity needs are primarily for working capital, capital expenditures, dividends and acquisitions. Our primary sources of liquidity have been funds provided by operations, funds available from existing bank credit arrangements and the sale of our debt securities. Our existing financial resources (working capital, available bank borrowing arrangements and our at-the-market program) and anticipated cash flow from operations are expected to be adequate to meet anticipated cash requirements for at least the next twelve months and the foreseeable future thereafter, including but not limited to our ability to maintain current operations and fund capital expenditure requirements, service our debt, pursue acquisitions, pay dividends and repurchase common shares. For more information about our at the market program and other sales of common stock, see Note 13, “Weighted-Average Number of Shares Used in Computing Earnings Per Share,” to the condensed consolidated financial statements, included elsewhere herein.

Current wording

Our liquidity needs are primarily for working capital, capital expenditures, dividends and acquisitions. Our primary sources of liquidity have been funds provided by operations, funds available from existing bank credit arrangements and the sale of our debt securities. Our existing financial resources (working capital, available bank borrowing arrangements and our at-the-market program) and anticipated cash flow from operations are expected to be adequate to meet anticipated cash requirements for at least the next twelve months and the foreseeable future thereafter, including but not limited to our ability to maintain current operations and fund capital expenditure requirements, service our debt, pursue acquisitions, pay dividends and repurchase common shares. For more information about our at the market program and other sales of common stock, see Note

Previous wording

As of March 31, 2025, we had total liquidity of $209.5 million, which included $54.5 million of cash and cash equivalents and $155.0 million of unused borrowing availability under our credit agreements, which includes $9.4 million of suppressed availability.

Current wording

As of June 30, 2025, we had total liquidity of $189.4 million, which included $45.6 million of cash and cash equivalents and $143.8 million of unused borrowing availability under our credit agreements, which includes $8.5 million of suppressed availability.

Previous wording

The Company had cash and cash equivalents held by foreign subsidiaries of $44.2 million at March 31, 2025 and $43.4 million at December 31, 2024. We do not expect restrictions on repatriation of cash held outside the U.S. to have a material effect on our overall liquidity, financial condition or results of operations for the foreseeable future.

Current wording

The Company had cash and cash equivalents held by foreign subsidiaries of $34.8 million at June 30, 2025 and $43.4 million at December 31, 2024. We do not expect restrictions on repatriation of cash held outside the U.S. to have a material effect on our overall liquidity, financial condition or results of operations for the foreseeable future.

Previous wording

In April 2017, Park-Ohio Industries, Inc. (“Park-Ohio”), the operating subsidiary of Park-Ohio Holdings Corp., completed the sale, in a private placement, of $350.0 million aggregate principal amount of 6.625% Senior Notes due 2027 (the “Notes”). The net proceeds from the issuance of the Notes were used to repay in full our previously outstanding 8.125% Senior Notes due 2021 and our outstanding term loan, and to repay a portion of the borrowings then outstanding under our revolving credit facility.

Current wording

In April 2017, Park-Ohio completed the sale, in a private placement, of $350.0 million aggregate principal amount of the Notes. The net proceeds from the issuance of the Notes were used to repay in full our previously outstanding 8.125% Senior Notes due 2021 and our outstanding term loan, and to repay a portion of the borrowings then outstanding under our revolving credit facility. On July 31, 2025, Park-Ohio completed its offering of $350.0 million aggregate principal amount of the New Notes in a private offering. Park-Ohio intends to use the net proceeds from the offering of the New Notes, along with cash on hand, to redeem all of the outstanding Notes. See the Condensed Consolidation Financial Statements Note 14 for further discussion.

Previous wording

In September 2023, Park-Ohio amended its Seventh Amended and Restated Credit Agreement (the “Credit Agreement”). The Credit Agreement provides for a revolving credit facility in the amount of $405.0 million, including a $40.0 million Canadian revolving subcommitment and a European revolving subcommitment in the amount of $30.0 million. Pursuant to the Credit Agreement, Park-Ohio has the option to increase the availability under the revolving credit facility by an aggregate incremental amount up to $70.0 million. The Credit Agreement matures on January 14, 2027.

Current wording

In September 2023, Park-Ohio amended its Credit Agreement. The Credit Agreement provides for a revolving credit facility in the amount of $405.0 million, including a $40.0 million Canadian revolving subcommitment and a European revolving subcommitment in the amount of $30.0 million. Pursuant to the Credit Agreement, Park-Ohio has the option to increase the availability under the revolving credit facility by an aggregate incremental amount up to $70.0 million. The Credit Agreement was scheduled to mature on January 14, 2027. In July 2025, Park-Ohio entered into an amendment to the Credit Agreement in order to, among other things, extend the maturity date to the fifth anniversary from the closing of the amendment.

Previous wording

As of March 31, 2025, the Company had finance leases totaling $15.7 million.

Current wording

As of June 30, 2025, the Company had finance leases totaling $15.1 million.

Previous wording

The future availability of bank borrowings under the revolving credit facility provided by the Credit Agreement is based on (1) our calculated availability under the Credit Agreement and (2) if such calculated availability decreases below $50.625 million, our ability to meet a debt service ratio covenant. If our calculated availability is less than $50.625 million, our debt service coverage ratio must be greater than 1.0. At March 31, 2025, our calculated availability under the Credit Agreement was $118.0 million; therefore, the debt service ratio covenant did not apply.

Current wording

The future availability of bank borrowings under the revolving credit facility provided by the Credit Agreement is based on (1) our calculated availability under the Credit Agreement and (2) if such calculated availability decreases below $50.625 million, our ability to meet a debt service ratio covenant. If our calculated availability is less than $50.625 million, our debt service coverage ratio must be greater than 1.0. At June 30, 2025, our calculated availability under the Credit Agreement was $102.7 million; therefore, the debt service ratio covenant did not apply.

Previous wording

The Company declared and paid dividends to shareholders of $1.8 million during the three months ended March 31, 2025. On April 17, 2025, the Company's Board of Directors declared a quarterly dividend of $0.125 per common share. The dividend will be paid on May 16, 2025 to shareholders of record as of the close of business on May 2, 2025 and will result in a cash outlay of approximately $1.8 million. Although we currently intend to pay a quarterly dividend on an ongoing basis, all future dividend declarations will be at the discretion of our Board of Directors and dependent upon then-existing conditions, including our operating results and financial condition, capital requirements, contractual restrictions, business prospects and other factors that our Board of Directors may deem relevant.

Current wording

The Company declared and paid dividends to shareholders of $3.6 million during the six months ended June 30, 2025. On July 18, 2025, the Company's Board of Directors declared a quarterly dividend of $0.125 per common share. The dividend will be paid on August 15, 2025 to shareholders of record as of the close of business on August 1, 2025 and will result in a cash outlay of approximately $1.8 million. Although we currently intend to pay a quarterly dividend on an ongoing basis, all future dividend declarations will be at the discretion of our Board of Directors and dependent upon then-existing conditions, including our operating results and financial condition, capital requirements, contractual restrictions, business prospects and other factors that our Board of Directors may deem relevant.

Previous wording

These 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 expressed or implied by such forward-looking statements. These factors that could cause actual results to differ materially from expectations include, but are not limited to, the following: the impact supply chain and logistic issues have on our business, results of operations, financial position and liquidity; our substantial indebtedness; the uncertainty of the global economic environment; general business conditions and competitive factors, including pricing pressures and product innovation; demand for our products and services; the impact of labor disturbances affecting our customers; raw material availability and pricing; fluctuations in energy costs; component part availability and pricing; changes in our relationships with customers and suppliers; the financial condition of our customers, including the impact of any bankruptcies; our ability to successfully integrate recent and future acquisitions into existing operations; the amounts and timing, if any, of purchases of our common stock; changes in general economic conditions such as inflation rates, interest rates, tax rates, unemployment rates, higher labor and healthcare costs, recessions and changing government policies, laws and regulations, including those related to the current global uncertainties and crises, such as tariffs and surcharges; adverse impacts to us, our suppliers and customers from acts of terrorism or hostilities, including the conflicts between Russia and Ukraine and in the Middle East, or political unrest, including the rising tension between China and the United States; public health issues, including the outbreak of infectious diseases and any impact on our facilities and operations and our customers and suppliers; our ability to meet various covenants, including financial covenants, contained in the agreements governing our indebtedness; disruptions, uncertainties or volatility in the credit markets that may limit our access to capital; potential disruption due to a partial or complete reconfiguration of the European Union; increasingly stringent domestic and foreign governmental regulations, including those affecting the environment or import and export controls and other trade barriers; inherent uncertainties involved in assessing our potential liability for environmental remediation-related activities; the outcome of pending and future litigation and other claims and disputes with customers; our dependence on the automotive and heavy-duty truck industries, which are highly cyclical; the dependence of the automotive industry on consumer spending; our ability to negotiate contracts with labor unions; our dependence on key ma…

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Current wording

component part availability and pricing; changes in our relationships with customers and suppliers; the financial condition of our customers, including the impact of any bankruptcies; our ability to successfully integrate recent and future acquisitions into existing operations; the amounts and timing, if any, of purchases of our common stock; changes in general economic conditions such as inflation rates, interest rates, tax rates, unemployment rates, higher labor and healthcare costs, recessions and changing government policies, laws and regulations, including those related to the current global uncertainties and crises, such as tariffs and surcharges; adverse impacts to us, our suppliers and customers from acts of terrorism or hostilities, including the conflicts between Russia and Ukraine and in the Middle East, or political unrest, including the rising tension between China and the United States; public health issues, including the outbreak of infectious diseases and any impact on our facilities and operations and our customers and suppliers; our ability to meet various covenants, including financial covenants, contained in the agreements governing our indebtedness; disruptions, uncertainties or volatility in the credit markets that may limit our access to capital; potential disruption due to a partial or complete reconfiguration of the European Union; increasingly stringent domestic and foreign governmental regulations, including those affecting the environment or import and export controls and other trade barriers; inherent uncertainties involved in assessing our potential liability for environmental remediation-related activities; the outcome of pending and future litigation and other claims and disputes with customers; our dependence on the automotive and heavy-duty truck industries, which are highly cyclical; the dependence of the automotive industry on consumer spending; our ability to negotiate contracts with labor unions; our dependence on key management; our dependence on information systems; our ability to continue to pay cash dividends, and the timing and amount of any such dividends; and the other factors we describe under “Item 1A. Risk Factors” included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024. Any forward-looking statement speaks only as of the date on which such statement is made, and we undertake no obligation to update any forward-looking statement, whether as a result of new information, future events or otherwise, except as required by law. In light of these and other uncertainties, the inclusion of a forward-looking statement herein should not be regarded as a representation by us that our plans and objectives will be achieved.