What changed in this filing

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Item 1. Financial Statements

2022-05-10 compared with 2021-11-03 · 99 added, 207 removed, 299 unchanged (51% of the section changed)

3 unchanged sentences

Condensed Consolidated Balance Sheets

September 30,

2022 December 31,

33 unchanged sentences

Condensed Consolidated Statements of Operations (Unaudited)

Three Months Ended September 30, Nine Months Ended September 30,

2021 2020 2021 2020

Three Months Ended March 31,

(In millions, except per share data)

3 unchanged sentences

Selling, general and administrative expenses 45.8 39.7

Operating (loss) income ( 5.0 ) 11.0 3.9 3.1

Operating income 7.9 12.3

Other components of pension income and other postretirement benefits expense, net

2.4 1.9 7.3 5.5

Interest expense, net ( 7.8 ) ( 7.4 )

(Loss) income before income taxes ( 10.2 ) 5.5 ( 11.2 ) ( 14.3 )

Income before income taxes 2.9 7.3

Income tax benefit (expense) 3.4 ( 1.9 )

Net (loss) income ( 7.4 ) 5.2 ( 7.5 ) ( 10.5 )

Net loss attributable to noncontrolling interests 0.2 0.1 0.5 0.4

Net (loss) income attributable to Park-Ohio Holdings Corp.

Net income 6.3 5.4

Net (income) loss attributable to noncontrolling interests ( 0.2 ) 0.1

Net income attributable to Park-Ohio Holdings Corp.

common shareholders $ 6.1 $ 5.5

(Loss) income per common share attributable to Park-Ohio Holdings Corp.

Income per common share attributable to Park-Ohio Holdings Corp.

common shareholders:

1 unchanged sentence

Diluted $ 0.50 $ 0.45

Weighted-average shares used to compute (loss) income per share:

Weighted-average shares used to compute income per share:

Basic 12.0 12.0

3 unchanged sentences

and Subsidiaries

Condensed Consolidated Statements of Comprehensive Income (Loss) (Unaudited)

Three Months Ended September 30, Nine Months Ended September 30,

2021 2020 2021 2020

Condensed Consolidated Statements of Comprehensive Income (Unaudited)

Three Months Ended March 31,

(In millions)

Net (loss) income $ ( 7.4 ) $ 5.2 $ ( 7.5 ) $ ( 10.5 )

Net income $ 6.3 $ 5.4

Other comprehensive (loss) income, net of tax:

Currency translation ( 3.9 ) ( 4.3 )

Foreign currency forward contracts 0.7 —

Pension and other postretirement benefits 0.1 0.2

Total other comprehensive (loss) income ( 5.3 ) 12.9 ( 7.6 ) 0.1

Total comprehensive (loss) income, net of tax ( 12.7 ) 18.1 ( 15.1 ) ( 10.4 )

Comprehensive loss attributable to noncontrolling interests 0.2 0.1 0.5 0.4

Comprehensive (loss) income attributable to Park-Ohio Holdings Corp.

Total other comprehensive loss ( 3.1 ) ( 4.1 )

Total comprehensive income, net of tax 3.2 1.3

Comprehensive (income) loss attributable to noncontrolling interests ( 0.2 ) 0.1

Comprehensive income attributable to Park-Ohio Holdings Corp.

common shareholders $ 3.0 $ 1.4

6 unchanged sentences

Earnings Treasury Stock Accumulated

Comprehensive (Loss) Income Noncontrolling Interests Total

Comprehensive Loss Noncontrolling Interests Total

(In whole shares) (In millions)

5 unchanged sentences

Dividends — — — ( 1.6 ) — — — ( 1.6 )

Increase in Park-Ohio ownership interest — — 1.1 — — — ( 1.1 ) —

Payments of withholding taxes on share awards

1 unchanged sentence

Balance at March 31, 2022 16,334,220 $ 16.3 $ 144.5 $ 263.9 $ ( 85.4 ) $ ( 22.3 ) $ 10.9 $ 327.9

Other comprehensive (loss) income — — — ( 5.3 ) — 1.8 ( 0.2 ) ( 3.7 )

Stock-based compensation expense — — 1.4 — — — — 1.4

Stock-based compensation activity 174,746 0.2 ( 0.2 ) — — — — —

Dividends — — — ( 1.5 ) — — — ( 1.5 )

Payments of withholding taxes on share awards

— — — — ( 2.1 ) — — ( 2.1 )

Balance at June 30, 2021 16,316,870 16.3 139.4 287.6 ( 82.0 ) ( 20.4 ) 12.3 353.2

Other comprehensive (loss) income — — — ( 7.2 ) — ( 5.3 ) ( 0.2 ) ( 12.7 )

Stock-based compensation expense — — 1.7 — — — — 1.7

Stock-based compensation activity 2,500 — — — — — — —

Dividends — — — ( 1.6 ) — — — ( 1.6 )

Purchases of treasury stock ( 99,661 shares)

— — — — ( 2.5 ) — — ( 2.5 )

Payments of withholding taxes on share awards

— — — — ( 0.4 ) — — ( 0.4 )

Balance at September 30, 2020 16,319,370 $ 16.3 $ 141.1 $ 278.8 $ ( 84.9 ) $ ( 25.7 ) $ 12.1 $ 337.7

Shares Amount Additional

9 unchanged sentences

Dividends — — — ( 1.6 ) — — — ( 1.6 )

Purchases of treasury stock ( 180,827 shares)

— — — — ( 2.9 ) — — ( 2.9 )

Increase in Park-Ohio ownership interest — — 1.1 — — — ( 1.1 ) —

Payments of withholding taxes on share awards

1 unchanged sentence

Balance at March 31, 2021 16,142,124 $ 16.1 $ 138.2 $ 294.4 $ ( 79.9 ) $ ( 22.2 ) $ 12.5 $ 359.1

Other comprehensive (loss) income — — — ( 16.6 ) — 3.3 ( 0.4 ) ( 13.7 )

Stock-based compensation expense — — 1.3 — — — — 1.3

Stock-based compensation activity 283,993 0.3 ( 0.3 ) — — — — —

Purchases of treasury stock ( 149,376 shares)

— — — — ( 2.4 ) — — ( 2.4 )

Payments of withholding taxes on share awards

— — — — ( 0.6 ) — — ( 0.6 )

Balance at June 30, 2020 15,991,391 16.0 132.2 281.2 ( 77.1 ) ( 49.8 ) 13.7 316.2

Other comprehensive income (loss) — — — 5.3 — 12.9 ( 0.1 ) 18.1

Stock-based compensation expense — — 1.6 — — — — 1.6

Stock-based compensation activity 157,400 0.2 ( 0.2 ) — — — — —

Purchases of treasury stock ( 119,831 shares)

— — — — ( 1.9 ) — — ( 1.9 )

Balance at September 30, 2020 16,148,791 $ 16.2 $ 133.6 $ 286.5 $ ( 79.0 ) $ ( 36.9 ) $ 13.6 $ 334.0

Three Months Ended September 30, Nine Months Ended September 30,

2021 2020 2021 2020

Three Months Ended March 31,

Dividends per common share $ 0.125 $ 0.125

3 unchanged sentences

Condensed Consolidated Statements of Cash Flows (Unaudited)

Nine Months Ended September 30,

Three Months Ended March 31,

(In millions)

OPERATING ACTIVITIES

Net loss $ ( 7.5 ) $ ( 10.5 )

Adjustments to reconcile net loss to net cash (used) provided by operating activities:

Net income $ 6.3 $ 5.4

Adjustments to reconcile net income to net cash (used) provided by operating activities:

Depreciation and amortization 9.7 9.4

9 unchanged sentences

Purchases of property, plant and equipment ( 7.1 ) ( 6.6 )

Business acquisition, net of cash acquired ( 5.4 ) —

Proceeds from sale of an asset — 1.4

Net cash used by investing activities ( 7.1 ) ( 6.6 )

FINANCING ACTIVITIES

Proceeds (payments) from revolving credit facility, net 78.4 ( 7.7 )

Proceeds from revolving credit facility, net 29.2 5.7

Payments on other debt ( 0.7 ) ( 2.8 )

2 unchanged sentences

Dividends ( 1.6 ) ( 1.6 )

Purchases of treasury shares ( 2.5 ) ( 7.2 )

Payments of withholding taxes on share awards ( 0.1 ) ( 0.1 )

Net cash provided (used) by financing activities 62.0 ( 24.1 )

Net cash provided by financing activities 25.2 1.5

Effect of exchange rate changes on cash ( 0.5 ) ( 0.9 )

Increase (decrease) in cash and cash equivalents 4.6 ( 5.1 )

Increase in cash and cash equivalents 7.5 3.9

Cash and cash equivalents at beginning of period 54.1 55.0

1 unchanged sentence

Interest paid $ 1.7 $ 1.1

Income taxes (received) paid, net $ ( 4.6 ) $ 2.0

Income taxes paid $ 1.4 $ 1.8

Refer to the accompanying notes to these unaudited condensed consolidated financial statements.

2 unchanged sentences

Notes to Unaudited Condensed Consolidated Financial Statements

September 30, 2021

March 31, 2022

NOTE 1 — Basis of Presentation

6 unchanged sentences

In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included.

Operating results for the three- and nine- month periods ended September 30, 2021 are not necessarily indicative of the results that may be expected for the year ending December 31, 2021.

Operating results for the three- month period ended March 31, 2022 are not necessarily indicative of the results that may be expected for the year ending December 31, 2022.

The balance sheet at December 31, 2021 has been derived from the audited financial statements at that date but does not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements.

8 unchanged sentences

However, the relief is temporary and generally cannot be applied to contract modifications that occur after December 31, 2022 or hedging relationships entered into or evaluated after that date.

The Company is currently evaluating the expected impact of this standard.

This standard is not expected to have a material impact once adopted.

No other recently issued ASUs are expected to have a material impact on our results of operations, financial condition or liquidity.

5 unchanged sentences

Notes to Unaudited Condensed Consolidated Financial Statements

September 30, 2021

Three Months Ended September 30, Nine Months Ended September 30,

2021 2020 2021 2020

March 31, 2022

Three Months Ended March 31,

(In millions)

11 unchanged sentences

(In millions)

Three Months Ended September 30, 2021

Three Months Ended March 31, 2022

GEOGRAPHIC REGION

6 unchanged sentences

Total $ 168.8 $ 158.6 $ 91.0 $ 418.4

Three Months Ended September 30, 2020

Three Months Ended March 31, 2021

GEOGRAPHIC REGION

9 unchanged sentences

Notes to Unaudited Condensed Consolidated Financial Statements

September 30, 2021

Supply Technologies Segment Assembly Components Segment Engineered Products Segment Total Revenues

(In millions)

Nine Months Ended September 30, 2021

GEOGRAPHIC REGION

United States $ 281.4 $ 241.8 $ 126.7 $ 649.9

Europe 84.7 10.7 46.3 141.7

Asia 42.4 19.0 38.5 99.9

Mexico 48.2 38.6 13.4 100.2

Canada 8.6 44.3 12.5 65.4

Other 1.4 1.3 8.3 11.0

Total $ 466.7 $ 355.7 $ 245.7 $ 1,068.1

Nine Months Ended September 30, 2020

GEOGRAPHIC REGION

United States $ 228.3 $ 212.9 $ 141.7 $ 582.9

Europe 59.3 10.2 42.4 111.9

Asia 31.5 19.8 46.1 97.4

Mexico 40.0 23.8 5.5 69.3

Canada 7.0 42.3 15.1 64.4

Other 1.1 1.0 6.8 8.9

Total $ 367.2 $ 310.0 $ 257.6 $ 934.8

March 31, 2022

For over time arrangements, contract liabilities primarily relate to advances or deposits received from the Company’s customers before revenue is recognized.

These amounts, which totaled $ 38.6 million and $ 37.4 million at September 30, 2021 and December 31, 2020, respectively, are recorded in Accrued expenses and other in the Condensed Consolidated Balance Sheets.

These amounts, which totaled $ 56.6 million and $ 51.7 million at March 31, 2022 and December 31, 2021, respectively, are recorded in Accrued expenses and other in the Condensed Consolidated Balance Sheets.

For over time arrangements, contract assets primarily relate to revenue recognized in advance of billings to customers under long-term contracts accounted for under percentage of completion.

These amounts, which totaled $ 50.0 million and $ 56.9 million at September 30, 2021 and December 31, 2020, respectively, are recorded in Prepaid and other current assets in the Condensed Consolidated Balance Sheets.

These amounts, which totaled $ 56.6 million and $ 55.0 million at March 31, 2022 and December 31, 2021, respectively, are recorded in Prepaid and other current assets in the Condensed Consolidated Balance Sheets.

NOTE 4 — Segments

8 unchanged sentences

Results by business segment were as follows:

Park-Ohio Holdings Corp.

and Subsidiaries

Notes to Unaudited Condensed Consolidated Financial Statements

September 30, 2021

Three Months Ended September 30, Nine Months Ended September 30,

2021 2020 2021 2020

Three Months Ended March 31,

(In millions)

9 unchanged sentences

Corporate costs ( 7.9 ) ( 5.0 )

Operating (loss) income ( 5.0 ) 11.0 3.9 3.1

Operating income 7.9 12.3

Other components of pension income and other postretirement benefits expense, net

2.4 1.9 7.3 5.5

Interest expense, net ( 7.8 ) ( 7.4 )

(Loss) income before income taxes $ ( 10.2 ) $ 5.5 $ ( 11.2 ) $ ( 14.3 )

NOTE 5 — Plant Closure and Consolidation

In the three and nine months ended September 30, 2021, the Company recorded expenses totaling $ 1.8 million and $ 3.1 million, respectively, in its Assembly Components segment.

These charges were recorded in connection with actions taken to close and consolidate its extrusion operations in Tennessee and its fuel operations in Michigan, and to complete other cost-reduction actions in this segment.

In the three and nine months ended September 30, 2021, the expenses included facility-related costs of $ 1.8 million and $ 2.8 million, respectively, which were included in cost of sales in the Condensed Consolidated Statements of Operations.

For the nine months ended September 30, 2021, expenses also included severance costs of $ 0.3 million, which were included in selling, general and administrative expenses in the Condensed Consolidated Statements of Operations.

The Company expects to incur additional moving and other facility-related costs related to these initiatives of approximately $ 1.9 million in the fourth quarter of 2021.

In the three and nine months ended September 30, 2021, the Company recorded expenses related to plant closure and consolidation in its Engineered Products segment totaling $ 0.6 million and $ 1.9 million, respectively, which are included in selling, general and administrative expenses in the Condensed Consolidated Statements of Operations.

The Company expects to incur additional costs related to these initiatives of approximately $ 1.6 million in the fourth quarter of 2021.

During the third quarter of 2021, in connection with the plant closure and consolidation activities in its Engineered Products segment, the Company committed to a plan to sell real estate at two operating locations.

The Company determined that these assets met the criteria to be classified as held for sale during the third quarter and, therefore, the aggregate carrying value of approximately $ 4.9 million is included in assets held for sale and presented in Prepaid and other current assets in the Condensed Consolidated Balance Sheet at September 30, 2021.

The Company believes that the fair value less costs to sell of these assets exceeds their respective carrying values.

Income before income taxes $ 2.9 $ 7.3

Park-Ohio Holdings Corp.

1 unchanged sentence

Notes to Unaudited Condensed Consolidated Financial Statements

September 30, 2021

NOTE 6 — Acquisition

On April 1, 2021, the Company acquired NYK Component Solutions Limited (“NYK”) for $ 5.4 million in cash, net of cash acquired, plus estimated contingent consideration of up to an additional $ 1.8 million.

NYK, which is included in our Supply Technologies segment, is headquartered in Southampton, United Kingdom and is a leading distributor of circular connectors and accessories for use in aerospace, defense, and other industrial applications.

NYK provides complementary products to our existing products in Supply Technologies.

The allocation of the purchase price of NYK is subject to finalization of the Company's determination of the fair values of the assets acquired and the liabilities assumed as of the acquisition date, and could be materially different than the estimates presented below.

The Company has not yet completed its analysis of the fair value of the intangible assets or the contingent consideration.

The final allocation is expected to be completed in the fourth quarter of 2021, but no later than one year after the acquisition date.

Below is the estimated purchase price allocation related to the acquisition of NYK;

the total purchase price is net of cash acquired and includes estimated contingent consideration of $ 1.8 million.

(In millions)

Accounts receivable $ 1.0

Inventories 2.2

Accounts payable and accrued expenses ( 1.0 )

Property, plant and equipment 0.1

Other, net 0.1

Intangible assets 2.8

Deferred income tax liability ( 0.5 )

Total purchase price (including the estimated contingent consideration of $ 1.8 million)

March 31, 2022

NOTE 5 — Plant Closure and Consolidation

In the three months ended March 31, 2022, the Company recorded expenses totaling $ 2.0 million in its Assembly Components segment in connection with its plant closure and consolidation activities.

Expenses of $ 1.8 million were included in cost of sales and $ 0.2 million were included in selling, general and administrative expenses in the Condensed Consolidated Statements of Operations.

The Company expects to incur additional restructuring costs of approximately $ 1.0 million in this segment in the remainder of 2022.

In the three months ended March 31, 2022, the Company recorded expenses totaling $ 0.6 million in its Engineered Products segment in connection with plant closure and consolidation activities.

The expenses are included in selling, general and administrative expenses in the Condensed Consolidated Statements of Operations, which consisted of severance of $ 0.1 million and other restructuring activities of $ 0.5 million.

The Company expects to incur additional costs of approximately $ 6.0 million related to the initiatives in this segment in the remainder of 2022.

In the three months ended March 31, 2021, the Company recorded expenses totaling $ 0.6 million in its Assembly Components segment in connection with actions taken to close and consolidate its extrusion operations in Tennessee and its fuel operations in Michigan, and to complete other cost-reduction actions in this segment.

The expenses, which were included in cost of sales in the Condensed Consolidated Statements of Operations, were comprised of severance of $ 0.2 million and other facility-related costs of $ 0.4 million.

In the three months ended March 31, 2021, the Company recorded expenses totaling $ 0.7 million in its Engineered Products segment in connection with plant closure and consolidation activities.

The expenses are included in selling, general and administrative expenses in the Condensed Consolidated Statements of Operations, were comprised of severance of $ 0.3 million and other restructuring activities of $ 0.4 million.

NOTE 6 — Inventories

Inventories, net consist of the following:

September 30, 2021 December 31, 2020

March 31, 2022 December 31, 2021

(In millions)

6 unchanged sentences

Notes to Unaudited Condensed Consolidated Financial Statements

September 30, 2021

March 31, 2022

NOTE 7 — Accrued Warranty Costs

1 unchanged sentence

Actual warranty expense could differ from the estimates made by the Company based on product performance.

The following table presents changes in the Company’s product warranty liability for the three and nine months ended September 30, 2021 and 2020:

Three Months Ended September 30, Nine Months Ended September 30,

2021 2020 2021 2020

The following table presents changes in the Company’s product warranty liability for the three months ended March 31, 2022 and 2021:

Three Months Ended March 31,

(In millions)

5 unchanged sentences

The Company’s tax provision for interim periods is determined using an estimate of its annual effective rate, adjusted for discrete items, if any, in each period.

On March 27, 2020, the President of the United States signed the Coronavirus Aid, Relief, and Economic Security (“CARES”) Act, a substantial tax-and-spending package intended to provide additional economic stimulus to address the impact of the COVID-19 pandemic.

Significant impacts of the CARES Act include the ability to carry back a net operating loss for five years and an increase of the Internal Revenue Code Section 163(j) interest expense disallowance limitations from 30% to 50% of adjusted taxable income, which will allow the Company to deduct additional interest expense for the 2019 and 2020 tax years.

The Company is assessing the potential impact of global relief packages and the CARES Act.

Income tax benefit for the three months ended September 30, 2021 was $ 2.8 million, representing an effective rate of 27 %, compared to income tax expense of $ 0.3 million, or 5 %, for the three months ended September 30, 2020.

The rate in the 2021 period is higher than the U.S.

statutory rate of 21% due primarily to the additional tax benefit recorded as result of stock compensation that vested and state and local taxes during the quarter.

The rate in the 2020 period is lower than the U.S.

statutory rate of 21% due primarily to a U.S.

net operating loss carryback to a prior year under the CARES Act, a tax benefit from the favorable impact of final Global Intangible Low-Taxed Income (“GILTI”) regulations and a decrease in our Transition Tax liability.

Income tax benefit for the nine months ended September 30, 2021 was $ 3.7 million, representing an effective rate of 33 %, compared to $ 3.8 million, or 27 %, for the nine months ended September 30, 2020.

The rate in the 2021 period is higher than the U.S.

statutory rate of 21% due primarily to the additional benefit recorded as result of the net operating loss carryback claim under the CARES Act and the composition of earnings.

The rate in the 2020 period is higher than the U.S.

statutory rate due to the impact of earnings in foreign jurisdictions with statutory income tax rates higher than the U.S.

In the three months ended March 31, 2022, income tax benefit was $ 3.4 million on pre-tax income of $ 2.9 million.

The benefit included a discrete tax benefit of $ 4.1 million related to a federal research and development credit.

In the three months ended March 31, 2021, income tax expense was $ 1.9 million, representing an effective income tax rate of 26 %.

This rate is higher than the U.S.

statutory rate of 21% primarily due to income subject to foreign tax at tax rates higher than the U.S.

statutory rate and state taxes.

NOTE 9 — Financing Arrangements

Debt consists of the following:

Park-Ohio Holdings Corp.

and Subsidiaries

Notes to Unaudited Condensed Consolidated Financial Statements

September 30, 2021

Carrying Value at

Maturity Date Interest Rate at

September 30, 2021 September 30, 2021 December 31, 2020

March 31, 2022 March 31, 2022 December 31, 2021

(In millions)

7 unchanged sentences

Total long-term debt, net $ 619.2 $ 591.5

In 2018, Park-Ohio Industries, Inc.

(“Park-Ohio”), the operating subsidiary of Park-Ohio Holdings Corp., entered into Amendment No.

1 to Seventh Amended and Restated Credit Agreement (the “Credit Agreement”) with a group of banks to increase the availability under the revolving credit facility from $ 350.0 million to $ 375.0 million, the Canadian revolving subcommitment from $ 35.0 million to $ 40.0 million and the European revolving subcommitment from $ 25.0 million to $ 30.0 million.

Furthermore, Park-Ohio has the option, pursuant to the Credit Agreement, to increase the availability under the revolving credit facility by an aggregate incremental amount up to $ 100.0 million.

In 2019, Park-Ohio entered into Amendment No.

4 to the Credit Agreement, extending the maturity of the Credit Agreement to November 26, 2024.

We had outstanding bank guarantees and letters of credit under the Credit Agreement of approximately $ 35.3 million at September 30, 2021 and $ 34.9 million at December 31, 2020.

Park-Ohio's Seventh Amended and Restated Credit Agreement (the “Credit Agreement”) provides for a revolving credit facility in the amount of $ 375.0 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, the Company has the option to increase the availability under the revolving credit facility by an aggregate incremental amount up to $ 100.0 million.

Park-Ohio Holdings Corp.

and Subsidiaries

Notes to Unaudited Condensed Consolidated Financial Statements

March 31, 2022

Agreement matures on November 26, 2024.

As of March 31, 2022, we had borrowing availability of $ 109.5 million under the credit agreement.

We had outstanding bank guarantees and letters of credit under the Credit Agreement of approximately $ 43.6 million at March 31, 2022 and $ 39.7 million at December 31, 2021.

In 2017, Park-Ohio completed the issuance, in a private placement, of $ 350.0 million aggregate principal amount of 6.625 % Senior Notes due 2027 (the “Notes”).

The Notes are unsecured senior obligations of Park-Ohio and are guaranteed on an unsecured senior basis by the 100 % owned material domestic subsidiaries of Park-Ohio.

In 2016, the Company, through its subsidiary, IEGE Industrial Equipment Holding Company Limited, entered into a financing agreement with Banco Bilbao Vizcaya Argentaria, S.A.

The financing agreement provides the Company a loan up to $ 28.9 million as of September 30, 2021, as well as a revolving credit facility for up to $ 11.6 million to fund working capital and general corporate needs.

No amounts were outstanding under the loan agreement or the revolving credit facility as of September 30, 2021.

In 2015, the Company entered into a finance lease agreement (the “Lease Agreement”).

The Lease Agreement provides the Company up to $ 50.0 million for finance leases.

Finance lease obligations of $ 15.2 million were borrowed under the Lease Agreement to acquire machinery and equipment as of September 30, 2021.

Finance lease obligations of $ 16.0 million were borrowed under the Lease Agreement to acquire machinery and equipment as of March 31, 2022.

In 2015, the Company, through its Southwest Steel Processing LLC subsidiary, entered into a financing agreement with the Arkansas Development Finance Authority which matures in September 2025.

The financing agreement provides the Company the ability to borrow up to $ 11.0 million for expansion of its manufacturing facility in Arkansas.

The Company had $ 6.1 million of borrowings outstanding under this agreement as of September 30, 2021, which is included in Other above.

The Company had $ 5.3 million of borrowings outstanding under this agreement as of March 31, 2022, which is included in Other above.

The following table represents fair value information of the Notes, classified as Level 1 using estimated quoted market prices.

Park-Ohio Holdings Corp.

and Subsidiaries

Notes to Unaudited Condensed Consolidated Financial Statements

September 30, 2021

September 30, 2021 December 31, 2020

March 31, 2022 December 31, 2021

(In millions)

2 unchanged sentences

NOTE 10 — Stock-Based Compensation

A summary of restricted share activity for the nine months ended September 30, 2021 is as follows:

A summary of restricted share activity for the three months ended March 31, 2022 is as follows:

Time-Based Performance-Based

3 unchanged sentences

Outstanding - beginning of year 655,093 $ 24.62 50,000 $ 32.55

183,401 33.64 — —

Granted — — — —

Vested ( 9,667 ) 33.07 — —

1 unchanged sentence

Outstanding - end of period 639,924 $ 24.47 50,000 $ 32.55

(a) - Included in this amount are 4,905 restricted share units.

Stock-based compensation is included in Selling, general and administrative expenses in the Condensed Consolidated Statements of Operations.

Total stock-based compensation expense for the three months ended September 30, 2021 and 2020 was $ 1.7 million and $ 1.6 million, respectively.

Total stock-based compensation expense for the nine months ended September 30, 2021 and 2020 was $ 4.7 million and $ 4.4 million, respectively.

As of September 30, 2021, there was $ 11.4 million of unrecognized compensation cost related to non-vested stock-based compensation, which cost is expected to be recognized over a weighted-average period of 2.0 years.

Total stock-based compensation expense was $ 1.6 million in both the three months ended March 31, 2022 and 2021.

As of March 31, 2022, there was $ 8.4 million of unrecognized compensation cost related to non-vested stock-based compensation, which cost is expected to be recognized over a weighted-average period of 1.7 years.

Park-Ohio Holdings Corp.

and Subsidiaries

Notes to Unaudited Condensed Consolidated Financial Statements

March 31, 2022

NOTE 11 — Commitments and Contingencies

7 unchanged sentences

however, actual results may differ materially from our estimates.

In addition to the routine lawsuits and asserted claims noted above, we are also a co-defendant in approximately 124 cases asserting claims on behalf of approximately 228 plaintiffs alleging personal injury as a result of exposure to asbestos.

In addition to the routine lawsuits and asserted claims noted above, we are also a co-defendant in 99 cases asserting claims on behalf of 161 plaintiffs alleging personal injury as a result of exposure to asbestos.

In every asbestos case in which we are named as a party, the complaints are filed against multiple named defendants.

1 unchanged sentence

We intend to vigorously defend these cases and believe we will continue to be successful in being dismissed from such cases.

Park-Ohio Holdings Corp.

and Subsidiaries

Notes to Unaudited Condensed Consolidated Financial Statements

September 30, 2021

While it is not possible to predict the ultimate outcome of asbestos-related lawsuits, claims and proceedings due to the unpredictable nature of personal injury litigation, and although our results of operations and cash flows for a particular period could be adversely affected by asbestos-related lawsuits, claims and proceedings, management believes that the ultimate resolution of these matters will not have a material adverse effect on our financial condition, liquidity or results of operations.

NOTE 12 — Pension and Postretirement Benefits

The components of net periodic benefit (income) expense costs recognized for the three and nine months ended September 30, 2021 and 2020 were as follows:

The components of net periodic benefit (income) expense costs recognized for the three months ended March 31, 2022 and 2021 were as follows:

Pension Benefits Postretirement Benefits

Three Months Ended September 30, Nine Months Ended September 30, Three Months Ended September 30, Nine Months Ended September 30,

Three Months Ended March 31, Three Months Ended March 31,

2022 2021 2022 2021

5 unchanged sentences

Net periodic benefit (income) expense $ ( 1.7 ) $ ( 1.5 ) $ — $ 0.1

NOTE 14 — Accumulated Other Comprehensive (Loss) Income

The components of and changes in accumulated other comprehensive loss for the three and nine months ended September 30, 2021 and 2020 were as follows:

Cumulative Translation Adjustment Pension and Postretirement Benefits Total Cumulative Translation Adjustment Pension and Postretirement Benefits Total

NOTE 13 — Accumulated Other Comprehensive Loss

The components of and changes in accumulated other comprehensive loss for the three months ended March 31, 2022 and 2021 were as follows:

Park-Ohio Holdings Corp.

and Subsidiaries

Notes to Unaudited Condensed Consolidated Financial Statements

March 31, 2022

Cumulative Translation Adjustment Cash Flow Hedges Pension and Postretirement Benefits Total Cumulative Translation Adjustment Cash Flow Hedges Pension and Postretirement Benefits Total

(In millions)

Three Months Ended September 30, 2021 Three Months Ended September 30, 2020

Beginning balance $ ( 11.0 ) $ ( 9.4 ) $ ( 20.4 ) $ ( 36.1 ) $ ( 13.7 ) $ ( 49.8 )

Currency translation (a)

( 5.5 ) — ( 5.5 ) 12.6 — 12.6

Pension and OPEB activity, net of tax — 0.2 0.2 — 0.3 0.3

Ending balance $ ( 16.5 ) $ ( 9.2 ) $ ( 25.7 ) $ ( 23.5 ) $ ( 13.4 ) $ ( 36.9 )

Nine Months Ended September 30, 2021 Nine Months Ended September 30, 2020

Three Months Ended March 31, 2022 Three Months Ended March 31, 2021

Beginning balance $ ( 18.3 ) $ — $ ( 0.9 ) $ ( 19.2 ) $ ( 8.3 ) $ — $ ( 9.8 ) $ ( 18.1 )

1 unchanged sentence

( 3.9 ) — — ( 3.9 ) ( 4.3 ) — — ( 4.3 )

Foreign currency forward contracts — 0.7 — 0.7 — — — —

Pension and OPEB activity, net of tax — — 0.1 0.1 — — 0.2 0.2

3 unchanged sentences

The following table sets forth the weighted-average number of shares used in the computation of earnings per share:

Park-Ohio Holdings Corp.

and Subsidiaries

Notes to Unaudited Condensed Consolidated Financial Statements

September 30, 2021

Three Months Ended September 30, Nine Months Ended September 30,

2021 2020 2021 2020

Three Months Ended March 31,

(In millions)

3 unchanged sentences

Certain restricted stock awards are anti-dilutive and therefore excluded from the computation of diluted earnings per share.

Anti-dilutive shares were 0.2 million and 0.5 million for the three months ended September 30, 2021 and 2020, respectively.

Anti-dilutive shares were 0.1 million and 0.3 million for the nine months ended September 30, 2021 and 2020, respectively.

Anti-dilutive shares were 0.2 million and 0.0 million for the three months ended March 31, 2022 and 2021, respectively.

NOTE 15 — Subsequent Event

On April 22, 2022, the Company's Board of Directors declared a quarterly dividend of $ 0.125 per common share.

The dividend will be paid on May 20, 2022 to shareholders of record as of the close of business on May 6, 2022 and will result in a cash outlay of approximately $ 1.6 million.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements