PARK OHIO HOLDINGS CORP

Previous wording

Engineered Products operates a diverse group of niche manufacturing businesses that design and manufacture a broad range of highly-engineered products, including induction heating and melting systems, pipe threading systems and forged and machined products. Engineered Products also produces and provides services and spare parts for the equipment it manufactures. The principal customers of Engineered Products are OEMs, sub-assemblers and end users in the following industries: ferrous and non-ferrous metals; coatings; forging; foundry; heavy-duty truck; construction equipment; automotive; oil and gas; rail; aerospace and defense; and power generation.

Current wording

Engineered Products operates a diverse group of niche manufacturing businesses that design and manufacture a broad range of highly-engineered products, including induction heating and melting systems, pipe threading systems, inverters and forged and machined products. Engineered Products also produces and provides services and spare parts for the equipment it manufactures. The principal customers of Engineered Products are OEMs, sub-assemblers and end users in the following industries: ferrous and non-ferrous metals; coatings; forging; foundry; heavy-duty truck; construction equipment; automotive; oil and gas; rail; aerospace and defense; and power generation.

Previous wording

Net sales decreased 5.0% to $1,204.1 million in the first nine months of 2025 compared to $1,267.8 million in the same period in 2024. This decrease was primarily due to lower demand in each of our business segments.

Current wording

Net sales increased 3.8% to $421.0 million in the first three months of 2026 compared to $405.4 million in the same period in 2025. This increase was primarily due to higher customer demand in each of our business segments.

Previous wording

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

Current wording

The factors explaining the changes in segment net sales for the three months ended March 31, 2026 compared to the corresponding 2025 period are contained in the “Segment Results” section below.

Previous wording

Cost of sales decreased to $1,001.2 million in the first nine months of 2025 compared to $1,050.9 million in the same period in 2024, driven by the decrease in net sales described above and the impact of ongoing profit improvement initiatives. Gross margin was 16.9% 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 increased to $348.3 million in the first three months of 2026 compared to $337.3 million in the same period in 2025, driven by the increase in net sales described above. Gross margin was 17.3% in the 2026 period compared to 16.8% in the corresponding 2025 period. The year-over-year gross margin increase was driven by the increase in net sales described above and ongoing profit-enhancement activities throughout the company.

Previous wording

SG&A expenses were $141.5 million in the first nine months of 2025, compared to $142.3 million in the same period in 2024, a decrease of 0.6%. As a percentage of net sales, SG&A expenses were 11.8% in the first nine months of 2025 compared to 11.2% in the comparable period in 2024. This increase as a percentage of net sales was driven by ongoing inflation, higher employee costs and fixed SG&A costs over lower sales levels.

Current wording

SG&A expenses were $51.7 million in the first three months of 2026, compared to $48.2 million in the same period in 2025. As a percentage of net sales, SG&A expenses were 12.3% in the first three months of 2026 compared to 11.9% in the comparable period in 2025. The increases were driven by ongoing inflation and higher employee costs.

Previous wording

During the third quarter of 2024, the Company recorded charges of $0.9 million in connection with restructuring and other special charges, which included $0.5 million in our Assembly Components segment and $0.4 million in our Engineered Products segment.

Current wording

During the first three months of 2026, the Company recorded $1.3 million in connection with restructuring and other special charges, which included $0.4 million in our Assembly Components segment, $0.5 million in our Engineered Products segment and $0.4 million at Corporate.

Previous wording

During the first nine months of 2024, the Company recorded $2.1 million in connection restructuring and other special charges, primarily in our Assembly Components and Engineered Products segments, as well as acquisition-related charges of $0.3 million in connection with the acquisition of EMA Indutec GmbH (“EMA”).

Current wording

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

Previous wording

Other components of pension and OPEB income, net was $5.3 million in the first nine months of 2025 compared to $3.8 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 $2.1 million in the first three months of 2026 compared to $1.8 million in the corresponding period in 2025. This increase was due to higher return on plan assets in 2026 compared to 2025.

Previous wording

Interest expense, net was $34.7 million in the first nine months of 2025 compared to $36.0 million in the 2024 period. The decrease was due primarily to lower interest rates on our revolver and lower average outstanding debt balances in the 2025 period compared to the same period a year ago, both partially offset by higher interest on our 2030 Notes at 8.500% compared to the 2027 Notes at 6.625%.

Current wording

Interest expense, net was $12.3 million in the first three months of 2026 compared to $11.0 million in the 2025 period. The increase was due primarily to the higher rate of 8.500% on our 2030 Notes compared to the 6.625% Senior Notes due 2027 (the “2027 Notes”) and higher average outstanding debt balances in the 2026 period compared to the same period a year ago, partially offset by lower rates on our revolving credit facility.

Previous wording

In the nine months ended September 30, 2025, we utilized cash of $6.4 million compared to $8.6 million of cash generated in the same period of 2024. Cash flow from operating activities was lower in 2025 due to lower profitability and higher working capital needs.

Current wording

In the three months ended March 31, 2026, we utilized cash of $7.8 million compared to $10.0 million in the same period of 2025. Cash flow from operating activities improved in 2026 due to lower working capital needs.

Previous wording

Capital expenditures of $27.6 million in the nine months ended September 30, 2025 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 of $12.5 million and $9.5 million in the three months ended March 31, 2026 and 2025, respectively, were primarily to provide increased capacity and automation for future growth, to maintain existing operations and for information system implementations.

Previous wording

During the nine months ended September 30, 2025, we had net debt borrowings of $46.0 million to fund capital expenditures and working capital needs. In addition, Park-Ohio issued the 2030 notes and used the net proceeds, along with cash on hand, to redeem all of our outstanding 2027 Notes, which resulted in a cash outlay of $6.5 million for debt refinancing fees and expenses. We also made cash dividend payments totaling $6.0 million.

Current wording

During the three months ended March 31, 2026, we had net debt borrowings of $24.3 million to fund capital expenditures and working capital needs. In addition, the Company made cash dividend payments to shareholders totaling $1.8 million.

Previous wording

As of September 30, 2025, we had total liquidity of $187.4 million, which included $50.8 million of cash and cash equivalents and $136.6 million of unused borrowing availability under our credit agreements, which includes $10.6 million of suppressed availability.

Current wording

As of March 31, 2026, we had total liquidity of $199.0 million, which included $46.7 million of cash and cash equivalents and $152.3 million of unused borrowing availability under our credit agreements, which includes $8.8 million of suppressed availability.

Previous wording

The Company had cash and cash equivalents held by foreign subsidiaries of $38.1 million at September 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.

Current wording

The Company had cash and cash equivalents held by foreign subsidiaries of $36.6 million at March 31, 2026 and $34.1 million at December 31, 2025. 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

On July 31, 2025, Park-Ohio completed the sale, in a private offering, of $350.0 million aggregate principal amount of the 2030 Notes. The net proceeds from the offering of the 2030 Notes, along with cash on hand, were used to repay in full our 2027 Notes and pay related fees and expenses.

Current wording

In July 2025, Park-Ohio completed the sale, in a private offering, of $350.0 million aggregate principal amount of the 2030 Notes bearing interest 8.500%. The net proceeds from the offering of the 2030 Notes, along with cash on hand, were used to redeem in full the 2027 Notes and pay related fees and expenses. Interest on the Notes is payable semi-annually in arrears on January 31 and July 31 of each year.

Previous wording

On July 17, 2025, Park-Ohio amended its Seventh Amended and Restated Credit Agreement (the “Credit Agreement”), in order to, among other things, (a) extend the maturity date to the fifth anniversary from the closing of the revolving credit facility amendment, (b) permit the issuance of the 2030 Notes and (c) permit the 2030 Notes to be secured by (i) a first-priority lien on the substantially all of the U.S. equipment (including machinery) of the Park-Ohio and the Park-Ohio’s existing and future domestic subsidiaries (the “Guarantors”) that guarantee debt under the Credit Agreement (the “Notes Priority Collateral”) and (ii) a second-priority lien (junior to the Credit Agreement) on substantially all of the U.S. assets of Park-Ohio and the Guarantors (including the 65% pledge of the foreign equity owned by the Guarantors), other than assets constituting Notes Priority Collateral, securing the revolving credit facility (the “ABL Priority Collateral”). 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.

Current wording

In July 2025, Park-Ohio amended its Seventh Amended and Restated Credit Agreement (the “Credit Agreement”), in order to, among other things, (a) extend the maturity date to the fifth anniversary from the closing of the revolving credit facility amendment, (b) permit the issuance of the 2030 Notes and (c) permit the 2030 Notes to be secured by (i) a first-priority lien on the substantially all of the U.S. equipment (including machinery) of the Park-Ohio and the Park-Ohio’s existing and future domestic subsidiaries (the “Guarantors”) that guarantee debt under the Credit Agreement (the “Notes Priority Collateral”) and (ii) a second-priority lien (junior to the Credit Agreement) on substantially all of the U.S. assets of Park-Ohio and the Guarantors (including the 65% pledge of the foreign equity owned by the Guarantors), other than assets constituting Notes Priority Collateral, securing the revolving credit facility (the “ABL Priority Collateral”). 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.

Previous wording

As of September 30, 2025, the Company had finance leases totaling $15.3 million.

Current wording

As of March 31, 2026, the Company had finance leases totaling $16.0 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 September 30, 2025, our calculated availability under the Credit Agreement was $93.2 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 March 31, 2026, our calculated availability under the Credit Agreement was $108.4 million; therefore, the debt service ratio covenant did not apply.

Previous wording

The Company declared and paid dividends to shareholders of $5.4 million during the nine months ended September 30, 2025. On October 31, 2025, the Company's Board of Directors declared a quarterly dividend of $0.125 per common share. The dividend will be paid on November 28, 2025 to shareholders of record as of the close of business on November 14, 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 $1.8 million during the three months ended March 31, 2026. On April 17, 2026, the Company's Board of Directors declared a quarterly dividend of $0.125 per common share. The dividend will be paid on May 14, 2026 to shareholders of record as of the close of business on May 1, 2026 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…

Excerpt shortened here; the source contains the full paragraph.

Current 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 outcome of our strategic review of the SSP business; 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, or geopolitical unrest; 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 c…

Excerpt shortened here; the source contains the full paragraph.