What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2025-03-06 compared with 2024-03-06 · 215 added, 210 removed, 907 unchanged (32% of the section changed)

2 unchanged sentences

Report of Independent Registered Public Accounting Firm (PCAOB ID:

Report of Independent Registered Public Accounting Firm

Report of Independent Registered Public Accounting Firm (PCAOB ID 42)

Consolidated Balance Sheets — December 31, 2024 and 2023

5 unchanged sentences

Supplementary Financial Data

Schedule II — Valuation and Qualifying accounts

Report of Independent Registered Public Accounting Firm

47 unchanged sentences

and Subsidiaries (the Company) maintained, in all material respects, effective internal control over financial reporting as of December 31, 2024, based on the COSO criteria.

As indicated in the accompanying Management’s Report on Internal Control over Financial Reporting, management’s assessment of and conclusion on the effectiveness of internal control over financial reporting did not include the internal controls of EMA Indutec GmbH (“EMA”), which is included in the 2024 consolidated financial statements of the Company and constituted less than 3% of total assets as of December 31, 2024 and less than 2% of total revenues for the year then ended.

Our audit of internal control over financial reporting of the Company also did not include an evaluation of the internal control over financial reporting of EMA.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the Company as of December 31, 2024 and 2023, the related consolidated statements of operations, comprehensive income (loss), shareholders' equity and cash flows for each of the three years in the period ended December 31, 2024, and the related notes and financial statement schedule listed in the Index at Item 15(a)(2) and our report dated March 6, 2025 expressed an unqualified opinion thereon.

27 unchanged sentences

Inventories, net 422.9 411.1

Promissory note related to financing arrangement — 25.0

Other current assets 110.5 95.2

Current assets held-for-sale - discontinued operations — 107.2

Total current assets 836.0 824.4

12 unchanged sentences

Accrued employee compensation 35.7 31.8

Financing arrangement liability — 45.0

Other accrued expenses 111.5 107.8

Current liabilities held-for-sale - discontinued operations — 43.8

Total current liabilities 361.1 363.6

36 unchanged sentences

Gains on sales of assets, net ( 2.5 ) ( 0.8 ) ( 2.4 )

Other expense 5.0 — —

Operating income 86.6 84.1 33.4

1 unchanged sentence

Interest expense, net ( 47.4 ) ( 45.1 ) ( 33.8 )

Income (loss) from continuing operations before income taxes 41.5 10.7 ( 1.1 )

Income from continuing operations before income taxes 44.4 41.5 10.7

Income tax (expense) benefit ( 4.9 ) ( 8.5 ) 0.7

Income (loss) from continuing operations 33.0 11.4 ( 0.1 )

Income from continuing operations 39.5 33.0 11.4

Loss (income) attributable to noncontrolling interest 2.7 1.0 ( 1.3 )

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Net income (loss) attributable to ParkOhio common shareholders before noncontrolling interest $ 29.1 $ 6.8 $ ( 12.9 )

Other comprehensive income (loss):

Other comprehensive (loss) income:

Currency translation ( 15.9 ) 7.7 ( 19.9 )

Pensions and other postretirement benefits, net of tax 7.8 10.4 ( 22.7 )

Total other comprehensive income (loss) 18.1 ( 42.6 ) ( 1.1 )

Total other comprehensive (loss) income ( 8.1 ) 18.1 ( 42.6 )

Total comprehensive income (loss), net of tax 21.0 24.9 ( 55.5 )

12 unchanged sentences

Balance at January 1, 2022 16,339,722 16.3 $ 142.9 $ 259.4 $ ( 85.3 ) $ ( 19.2 ) $ 10.7 $ 324.8

Comprehensive loss — — — ( 24.8 ) — ( 1.1 ) ( 1.2 ) ( 27.1 )

Comprehensive (loss) income — — — ( 14.2 ) — ( 42.6 ) 1.3 ( 55.5 )

Stock-based compensation — — 7.2 — — — — 7.2

2 unchanged sentences

Dividends — — — ( 6.4 ) — — ( 0.6 ) ( 7.0 )

Purchase of treasury stock ( 191,983 )

— — — — ( 5.5 ) — — ( 5.5 )

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

Payments of withholding taxes on share awards — — — — ( 1.6 ) — — ( 1.6 )

Balance at December 31, 2022 16,653,928 16.6 149.8 238.8 ( 86.9 ) ( 61.8 ) 11.4 267.9

Comprehensive (loss) income — — — ( 14.2 ) — ( 42.6 ) 1.3 ( 55.5 )

Comprehensive income (loss) — — — 7.8 — 18.1 ( 1.0 ) 24.9

Stock-based compensation — — 6.5 — — — — 6.5

2 unchanged sentences

Dividends — — — ( 6.5 ) — — ( 0.9 ) ( 7.4 )

Purchase of treasury stock ( 94,867 )

— — — — ( 1.6 ) — — ( 1.6 )

Payments of withholding taxes on share awards — — — — ( 2.0 ) — — ( 2.0 )

Balance at December 31, 2023 17,029,938 17.0 155.9 240.1 ( 88.9 ) ( 43.7 ) 9.5 289.9

3 unchanged sentences

Restricted stock cancelled ( 36,698 ) — — — — — — —

Issuances of common stock 1,041,590 1.0 29.4 — — — — 30.4

Dividends — — — ( 6.7 ) — — ( 0.5 ) ( 7.2 )

Purchase of treasury stock ( 112,106 )

— — — — ( 2.0 ) — — ( 2.0 )

Payments of withholding taxes on share awards — — — — ( 2.6 ) — — ( 2.6 )

Balance at December 31, 2024 18,292,490 18.3 $ 190.6 $ 265.2 $ ( 91.5 ) $ ( 51.8 ) $ 6.3 $ 337.1

9 unchanged sentences

OPERATING ACTIVITIES FROM CONTINUING OPERATIONS (In millions)

Income (loss) from continuing operations $ 33.0 $ 11.4 $ ( 0.1 )

Adjustments to reconcile income (loss) from continuing operations to net cash provided (used) by operating activities from continuing operations:

Income from continuing operations $ 39.5 $ 33.0 $ 11.4

Adjustments to reconcile income from continuing operations to net cash provided by (used in) operating activities from continuing operations:

Depreciation and amortization 33.6 31.7 30.2

Stock-based compensation 5.6 6.5 7.2

Gain on sales of assets, net ( 0.8 ) ( 2.4 ) ( 14.7 )

Gains on sales of assets, net ( 2.5 ) ( 0.8 ) ( 2.4 )

Deferred income taxes ( 14.6 ) ( 7.2 ) ( 8.3 )

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Other ( 7.1 ) 3.5 ( 7.5 )

Net cash provided (used) by operating activities from continuing operations 53.4 ( 26.6 ) ( 12.2 )

Net cash provided by (used in) operating activities from continuing operations 35.0 53.4 ( 26.6 )

INVESTING ACTIVITIES FROM CONTINUING OPERATIONS

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Business acquisitions, net of cash acquired ( 11.0 ) ( 1.2 ) ( 23.3 )

Net cash used by investing activities from continuing operations ( 11.9 ) ( 40.7 ) ( 7.4 )

Net cash used in investing activities from continuing operations ( 30.9 ) ( 11.9 ) ( 40.7 )

FINANCING ACTIVITIES FROM CONTINUING OPERATIONS

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Proceeds from other long-term debt 5.8 4.3 3.5

Proceeds from (payments on) finance lease facilities, net 0.9 8.5 ( 0.3 )

Proceeds from finance lease facilities, net 0.7 0.9 8.5

Net proceeds from common stock issuances 30.4 — —

Proceeds from down payment for sale of discontinued operations — — 20.0

1 unchanged sentence

Dividends ( 7.2 ) ( 7.4 ) ( 7.0 )

Purchases of treasury stock — — ( 2.5 )

Payments of withholding taxes on stock awards ( 2.0 ) ( 1.6 ) ( 3.0 )

Net cash (used) provided by financing activities from continuing operations ( 36.6 ) 84.6 60.8

Payments of withholding taxes on share awards ( 2.6 ) ( 2.0 ) ( 1.6 )

Net cash provided by (used in) financing activities from continuing operations 1.6 ( 36.6 ) 84.6

DISCONTINUED OPERATIONS 1 :

Total used by operating activities ( 2.9 ) ( 1.0 ) ( 31.1 )

Total used by investing activities ( 3.9 ) ( 4.8 ) ( 8.8 )

Total used by financing activities ( 2.4 ) ( 3.4 ) ( 0.9 )

Total used in operating activities ( 5.2 ) ( 2.9 ) ( 1.0 )

Total used in investing activities — ( 3.9 ) ( 4.8 )

Total used in financing activities — ( 2.4 ) ( 3.4 )

Decrease in cash and cash equivalents from discontinued operations ( 5.2 ) ( 9.2 ) ( 9.2 )

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Cash and cash equivalents at end of year $ 53.1 $ 54.8 $ 58.2

Income taxes paid (received), net $ 7.3 $ 10.7 $ ( 1.0 )

Income taxes paid, net $ 14.5 $ 7.3 $ 10.7

Interest paid $ 47.0 $ 47.6 $ 34.5

(1) - Our continuing operations exclude the results of our Aluminum Products business unit, which was sold December 29, 2023 and presented in discontinued operations for all periods presented.

(1) - Our continuing operations exclude the results of our Aluminum Products business unit, which was sold on December 29, 2023 and presented in discontinued operations for all periods presented.

The accompanying notes are an integral part of these consolidated financial statements.

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Transactions with related parties are not material to the Company’s financial position, results of operations or cash flows.

Discontinued Operations:

During the fourth quarter of 2022, we determined that our Aluminum Products business met the held-for-sale and discontinued operations accounting criteria.

Accordingly, the Company has reported the held-for-sale assets and liabilities, the operating results and the cash flows of Aluminum Products in discontinued operations for all periods presented throughout this Annual Report on Form 10-K.

On December 29, 2023, the Company sold this business to Angstrom Automotive Group (“Angstrom”) for approximately $ 50 million in cash and promissory notes, plus the assumption of approximately $ 3 million of financial lease obligations.

Unless otherwise indicated, amounts and activity in this Annual Report are presented on a continuing operations basis.

See Note 4, “Discontinued Operations,” for further information.

Accounting Estimates:

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Accounts Receivable and Allowance for Doubtful Accounts:

Accounts receivable are recorded at net realizable value.

Accounts receivable are reduced by an allowance for amounts that may become uncollectible in the future.

Accounts receivable are recorded at net realizable value and reduced by an allowance for amounts that may become uncollectible in the future.

The allowance for doubtful accounts was $ 3.9 million and $ 3.6 million at December 31, 2024 and 2023, respectively.

2 unchanged sentences

Sales of accounts receivable are reflected as a reduction of accounts receivable in the Consolidated Balance Sheets, and the proceeds are included in cash flows from operating activities in the Consolidated Statements of Cash Flows.

Expense in the amount of $ 2.4 million and $ 1.0 million in 2023 and 2022, respectively, related to the discount on sale of accounts receivable is recorded in the Consolidated Statements of Operations.

Expense in the amount of $ 2.4 million in both 2024 and 2023 related to the discount on sale of accounts receivable is recorded in the Consolidated Statements of Operations.

Inventories are valued using first-in, first-out or the weighted-average inventory method and stated at the lower of cost or net realizable value.

PARK-OHIO HOLDINGS CORP.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Major Classes of Inventories December 31, 2024 December 31, 2023

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Depreciation of fixed assets, including amounts capitalized under finance leases, is computed by the straight-line method based on the estimated useful lives of the assets ranging from five to 40 years for buildings, and three to 20 years for machinery and equipment.

PARK-OHIO HOLDINGS CORP.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

The following table summarizes property, plant and equipment:

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Upon indications of impairment, assets and liabilities are grouped at the lowest level for which identifiable cash flows are largely independent of the cash flows of other assets and liabilities.

The asset group would be considered impaired if the

PARK-OHIO HOLDINGS CORP.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

estimated future net undiscounted cash flows generated by the asset group are less than its carrying value.

The asset group would be considered impaired if the estimated future net undiscounted cash flows generated by the asset group are less than its carrying value.

Impairment losses are measured by comparing the estimated fair value of the asset group to its carrying value.

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however, we do not believe any such changes would have a material impact on our financial condition, results of operations or cash flows.

The carrying value of cash and cash equivalents, accounts receivable, accounts payable and borrowings under the Credit Agreement (as defined in Note 9) approximate fair value at December 31, 2023 and December 31, 2022 because of the short-term nature of these instruments.

The carrying value of cash and cash equivalents, accounts receivable and accounts payable approximate fair value at December 31, 2024 and 2023 because

PARK-OHIO HOLDINGS CORP.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

of the short-term nature of these instruments.

The fair values of long-term debt and pension plan assets are disclosed in Note 9 and Note 14, respectively.

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We have elected to account for global intangible low-taxed income (“GILTI”) as a current period expense.

The impact of GILTI at December 31, 2023 and 2022 was tax expense of $ 2.4 million and $ 1.8 million, respectively.

The impact of GILTI for the years ended December 31, 2024, 2023 and 2022 was tax expense of $ 1.5 million, $ 2.4 million and $ 1.8 million, respectively.

Revenue Recognition:

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We follow this method since reasonably reliable estimates of revenue and costs of a contract can be made.

See Note 2 for additional disclosure on revenue.

See Note 2 for additional disclosures regarding revenue.

Cost of Sales :

Cost of sales is primarily comprised of direct materials and supplies consumed in the manufacture of product;

manufacturing labor, depreciation expense and direct overhead expense;

and shipping and handling costs.

Cost of sales is primarily comprised of direct materials and supplies consumed in the manufacture of product, manufacturing labor, depreciation expense, direct overhead expense, and shipping and handling costs.

Concentration of Credit Risk:

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The Company establishes an allowance for doubtful accounts based upon factors surrounding the credit risk of specific customers, historical trends, current conditions and reasonable forecasts.

As of December 31, 2023 and 2022, the Company had uncollateralized receivables with five customers in the automotive industry, each with several locations, aggregating $ 26.3 million and $ 28.1 million, respectively, which represented approximately 10 % and 11 %, respectively, of the

PARK-OHIO HOLDINGS CORP.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Company’s trade accounts receivable.

As of December 31, 2024 and 2023, the Company had uncollateralized receivables with five customers in the automotive industry, each with several locations, aggregating $ 22.1 million and $ 26.3 million, respectively, which represented approximately 9 % and 10 %, respectively, of the Company’s trade accounts receivable.

During 2024 and 2023, sales to these customers amounted to approximately $ 235.9 million and $ 259.5 million, respectively, which represented approximately 14 % and 16 %, respectively, of the Company’s net sales.

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Gains and losses resulting from foreign currency transactions, including intercompany transactions that are not considered long-term investments, are included in the Consolidated Statements of Operations.

PARK-OHIO HOLDINGS CORP.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Discontinued Operations:

During the fourth quarter of 2022, we determined that our Aluminum Products business met the held-for-sale and discontinued operations accounting criteria.

Unless otherwise indicated, amounts and activity in this Annual Report are presented on a continuing operations basis.

See Note 4, “Discontinued Operations,” for further information.

The Company estimates the amount of warranty claims on sold products that may be incurred based on current and historical data.

6 unchanged sentences

Warranty expense 1.4 2.2 1.0

Acquisition 0.6 — —

Foreign currency translation ( 0.4 ) 0.2 ( 0.7 )

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This guidance requires additional annual and interim disclosures for reportable segments.

This new standard does not affect the recognition, measurement or financial statement presentation.

The amendments are effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024.

PARK-OHIO HOLDINGS CORP.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

This new standard did not affect the recognition, measurement or financial statement presentation.

The Company adopted this standard as of December 31, 2024.

Refer to Note 3 for the additional disclosures for our reportable segments.

Accounting Standards Not Yet Adopted

In December 2023, the FASB issued ASU No.

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This guidance requires additional annual disclosures for income taxes.

This new standard does not affect the recognition, measurement or financial statement presentation.

This new standard will not affect the recognition, measurement or financial statement presentation.

The amendments are effective for fiscal years beginning after December 15, 2024.

We are in the process of evaluating the impact of adopting this new guidance on our consolidated financial statement disclosures.

PARK-OHIO HOLDINGS CORP.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

In November 2024, the FASB issued ASU No.

2024-03, Income Statement-Reporting Comprehensive Income-Expense Disaggregation Disclosures (Subtopic 220-40):

Disaggregation of Income Statement Expenses.

The guidance requires tabular footnote disclosure of certain operating expenses disaggregated into categories, such as employee compensation, depreciation, and intangible asset amortization, included within each interim and annual income statement’s expense caption, as applicable.

The effective date is for fiscal years beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027.

We are in the process of evaluating the impact of adopting this new guidance on our consolidated financial statement disclosures.

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

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Revenue is recognized at a point in time, which is the shipping point, as that is when control transfers to the customer.

Assembly Components designs, develops and manufactures:

highly efficient, high pressure direct fuel injection fuel rails and pipes;

Assembly Components designs, develops and manufactures highly efficient, high pressure direct fuel injection fuel rails and pipes;

fuel filler pipes that route fuel from the gas cap to the gas tank;

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Over time arrangements represent 17 % of the Company's total consolidated sales for the year ended December 31, 2024.

The Company uses the input method to calculate the contract revenues to be recognized, which utilizes costs incurred to date in relation to total expected costs to satisfy the Company’s performance obligation under the contract.

Incurred costs represent work performed and therefore best depict the transfer of control to the customer.

The Company uses the input method to calculate the contract revenues to be recognized, which utilizes costs incurred to date in relation to total expected costs to satisfy the

PARK-OHIO HOLDINGS CORP.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Company’s performance obligation under the contract.

Incurred costs represent work performed and therefore best depict the transfer of control to the customer.

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

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Supply Technologies, Assembly Components and Engineered Products.

For purposes of measuring business segment performance, the chief operating decision maker utilizes segment operating income (loss), which is defined as revenues less expenses identifiable to the product lines within each segment.

The chief operating decision maker is the Company's Chief Executive Officer.

For purposes of measuring business segment performance, the chief operating decision maker utilizes segment operating income, which is defined as revenues less expenses identifiable to the product lines within each segment.

The Company does not allocate items that are non-operating;

unusual in nature;

or are corporate costs, which include but are not limited to executive and share-based compensation and corporate office costs.

Segment operating (loss) income reconciles to consolidated income (loss) before income taxes by deducting corporate costs, certain non-cash and/or non-operating items;

Other components of pension and other postretirement benefits (“OPEB”) income, net;

or corporate costs, which include but are not limited to executive compensation and corporate office costs.

Segment operating income reconciles to consolidated income before income taxes by adjusting for corporate costs;

gains on sales of assets;

other expenses;

other components of pension and other postretirement benefits income, net;

and interest expense, net.

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Year Ended December 31, 2024

2023 2022 2021

Supply Technologies $ 763.4 $ 711.5 $ 619.5

Assembly Components 427.8 388.8 321.5

Engineered Products 468.5 392.6 336.0

$ 1,659.7 $ 1,492.9 $ 1,277.0

Supply Technologies Assembly Components Engineered Products Corporate Total

(In millions)

Net sales $ 775.8 $ 398.7 $ 481.7 $ — $ 1,656.2

Cost of sales 631.5 353.6 389.7 — 1,374.8

Selling, general and administrative expenses 69.1 18.6 70.7 29.0 187.4

Restructuring and other special charges 0.2 1.1 3.6 — 4.9

Segment operating income (loss) $ 75.0 $ 25.4 $ 17.7 $ ( 29.0 ) 89.1

Supply Technologies $ 59.0 $ 45.7 $ 42.8

Assembly Components 33.4 1.1 ( 2.6 )

Engineered Products 19.1 14.8 ( 12.2 )

Total segment operating income 111.5 61.6 28.0

Corporate costs ( 28.2 ) ( 30.6 ) ( 26.4 )

Gains on sales of assets, net ( 2.5 )

Other expense 5.0

Operating income 86.6

1 unchanged sentence

Interest expense, net ( 47.4 )

Income (loss) from continuing operations before income taxes $ 41.5 $ 10.7 $ ( 1.1 )

Income from continuing operations before income taxes $ 44.4

Year Ended December 31, 2023

Supply Technologies Assembly Components Engineered Products Corporate Total

(In millions)

Net sales $ 763.4 $ 427.8 $ 468.5 $ — $ 1,659.7

Cost of sales 639.1 369.5 379.7 — 1,388.3

Selling, general and administrative expenses 65.1 23.4 64.8 28.2 181.5

Restructuring, acquisition-related and other special charges 0.2 1.5 4.9 — 6.6

Segment operating income (loss) $ 59.0 $ 33.4 $ 19.1 $ ( 28.2 ) 83.3

Gains on sales of assets, net ( 0.8 )

Operating income 84.1

Other components of pension and other postretirement benefits income, net 2.5

Interest expense, net ( 45.1 )

Income from continuing operations before income taxes $ 41.5

Year Ended December 31, 2022

Supply Technologies Assembly Components Engineered Products Corporate Total

(In millions)

Net sales $ 711.5 $ 388.8 $ 392.6 $ — $ 1,492.9

Cost of sales 608.2 366.3 307.9 — 1,282.4

Selling, general and administrative expenses 56.0 15.8 61.5 28.9 162.2

PARK-OHIO HOLDINGS CORP.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Restructuring, acquisition-related and other special charges 1.6 5.6 8.4 1.7 17.3

Segment operating income (loss) $ 45.7 $ 1.1 $ 14.8 $ ( 30.6 ) 31.0

Gains on sales of assets, net ( 2.4 )

Operating income 33.4

Other components of pension and other postretirement benefits income, net 11.1

Interest expense, net ( 33.8 )

Income from continuing operations before income taxes $ 10.7

Year Ended December 31,

2024 2023 2022

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$ 1,365.1 $ 1,340.7 $ 1,436.6

PARK-OHIO HOLDINGS CORP.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

At December 31, 2024, 2023 and 2022, approximately 66 %, 67 % and 71 %, respectively, of the Company’s assets were located in the United States.

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cash of $ 15.5 million paid to the Company at closing;

and promissory notes totaling $ 15.0 million payable to the Company on December 31, 2024, of which $ 10.0 million is contingent on the Aluminum Products business attaining certain purchase commitments during 2024.

In connection with the sale agreement, the promissory note of $ 25.0 million previously issued to the Company was deemed to be satisfied in full.

and promissory notes totaling $ 15.0 million payable to the Company on December 31, 2024, of which $ 10.0 million were contingent on the Aluminum Products business attaining certain purchase commitments during 2024.

The Company determined that the purchase commitments were not attained during 2024 and subsequently wrote-off the $ 10.0 million contingent notes during 2024.

PARK-OHIO HOLDINGS CORP.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Year Ended December 31,

7 unchanged sentences

Interest expense — ( 3.3 ) ( 2.8 )

( 3.3 ) ( 2.8 ) ( 3.0 )

Loss from operation of discontinued operations — ( 3.4 ) ( 30.5 )

3 unchanged sentences

Loss from discontinued operations, net of tax $ ( 10.4 ) $ ( 26.2 ) $ ( 24.3 )

(1) - Interest expense includes an allocation of interest that is not directly attributable to our Aluminum Products business, totaling $ 3.0 million, $ 2.5 million and $ 2.6 million in 2023, 2022 and 2021, respectively.

NOTE 5 — Plant Closure and Consolidation

During 2024, the Company consolidated an Assembly Components facility and closed an Engineered Products operation in Ohio.

In connection with these actions, the Company received cash proceeds of $ 11.5 million and recorded a gain on sale of assets of $ 2.5 million, which is included on a separate line in the Statements of Consolidated Operations.

During 2023 and 2022, the Company incurred the following expenses related to plant closure and consolidation in connection with its profit-improvement actions across its businesses.

PARK-OHIO HOLDINGS CORP.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

The actions in the Assembly Components segment were primarily in connection with actions taken to close and consolidate its extrusion operations in Ohio, to relocate certain production to lower-cost facilities with open capacity, and to complete other cost-reduction actions.

The actions in the Engineered Product segment were primarily in connection with plant closure and consolidation of a facility in Ohio, and to complete other cost-reduction actions in this segment.

Facility Related Costs Severance and Other Total

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Total $ 13.8 $ 0.2 $ 14.0

Assembly Components $ 3.8 $ — $ 3.8

Engineered Products 10.8 0.9 11.7

Total $ 14.6 $ 0.9 $ 15.5

The actions in the Assembly Components segment were primarily in connection with actions taken to close and consolidate its extrusion operations in Tennessee and its fuel operations in Michigan, to relocate certain production to lower-cost facilities with open capacity, and to complete other cost-reduction actions.

The actions in the Engineered Product segment were primarily in connection with plant closure and consolidation of multiple locations, and to complete other cost-reduction actions in this segment.

In connection with the above actions, the Company sold certain real estate for cash proceeds and gains on sales as follows.

The Company sold certain real estate for cash proceeds and gains on sales as follows.

Gains are recorded on a separate line in the Consolidated Statements of Operations and are excluded from segment operating income.

Cash Proceeds from Sales of Assets Net Book Value Gains on Sales of Assets

PARK-OHIO HOLDINGS CORP.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Cash Proceeds from Sales of Assets Gains on Sales of Assets

2024 $ 11.5 $ 2.5

2 unchanged sentences

NOTE 6 — Acquisitions

In July 2022, the Company acquired Charter Automotive (Changzhou) Co.

(“Charter”) for $ 9.3 million, net of cash acquired.

In February 2024, the Company acquired all of the outstanding shares of EMA Indutec GmbH (“EMA”), headquartered in Meckesheim, Germany, from the Aichelin Group, headquartered in Modling, Austria.

EMA, which is included in our Engineered Products segment, is a leading manufacturer of induction heating equipment and converters and operates through its two locations in Meckesheim, Germany and Beijing, China.

The purchase price, net of cash acquired, was $ 11.0 million.

The allocation of the purchase price of EMA was finalized in 2024 and is summarized as follows:

(In millions)

Accounts receivable $ 6.0

Inventories 4.7

Other current assets 0.5

Property, plant and equipment 1.3

Intangibles 6.8

Other assets 0.1

Accounts payable and accrued expenses ( 10.0 )

Deferred income tax liability ( 2.3 )

Total purchase price, net of cash acquired $ 11.0

During 2024, the Company paid $ 3.0 million, as scheduled, related to deferred purchase price for the 2022 acquisitions of Charter Automotive (Changzhou) Co.

(“Charter”) and Southern Fasteners & Supply, Inc.

(“Southern Fasteners”).

In July 2022, the Company acquired Charter for $ 9.3 million, net of cash acquired.

Charter, which is included in our Supply Technologies segment, is headquartered in Changzhou, China and is strategic to our existing fastener manufacturing business, will accelerate the global growth of the Company's proprietary products to electric vehicle and other auto-related platforms.

The Company has paid $ 7.6 million for Charter as of December 31, 2023 and is scheduled to pay the remaining balance throughout 2024.

In August 2022, the Company acquired Southern Fasteners & Supply, Inc.

(“Southern Fasteners”) for $ 18.7 million, net of cash acquired.

The purchase price included cash of $ 16.7 million paid at closing plus $ 0.5 million paid in 2023 (included in Business acquisitions, net of cash acquired in the Consolidated Statements of Cash Flows) and a $ 1.5 million Note that will be paid to the seller in 2024.

In August 2022, the Company acquired Southern Fasteners for $ 18.7 million, net of cash acquired.

Southern Fasteners, which is included in our Supply Technologies segment, is headquartered in Winston-Salem, North Carolina.

Southern Fasteners provides commercial fasteners and industrial supplies to a diverse base of maintenance, repair and operations (“MRO”) and original equipment manufacturing (“OEM”) customers throughout the United

Southern Fasteners complements Supply Technologies’ continued efforts to grow the initiatives centered around industrial supply and MRO products to our global OEM customer base.

PARK-OHIO HOLDINGS CORP.

1 unchanged sentence

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

States and specializes in the design of customized inventory programs for its customers.

Southern Fasteners complements Supply Technologies’ continued efforts to grow the initiatives centered around industrial supply and MRO products to our global OEM customer base.

In 2021, the Company acquired NYK Component Solutions Limited (“NYK”).

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 Company paid $ 7.2 million for NYK, including $ 5.4 million in cash at closing and an additional $ 0.6 million in 2022 and $ 1.3 million in 2023 related to contingent considerations based on profitability over the two years after the acquisition.

NOTE 7 — Goodwill

2 unchanged sentences

Balance at January 1, 2023 $ 21.1 $ 51.3 $ 36.5 $ 108.9

Acquisition 6.2 — — 6.2

Foreign currency translation ( 1.4 ) ( 0.2 ) ( 1.7 ) ( 3.3 )

Currency translation 0.7 0.1 0.5 1.3

Balance at December 31, 2023 21.8 51.4 37.0 110.2

Foreign currency translation 0.7 0.1 0.5 1.3

Acquisition — — 3.9 3.9

Disposal — — ( 0.5 ) ( 0.5 )

Currency translation ( 0.2 ) 0.1 ( 1.8 ) ( 1.9 )

Balance at December 31, 2024 $ 21.6 $ 51.5 $ 38.6 $ 111.7

10 unchanged sentences

* Not applicable, as these tradenames have an indefinite life.

Amortization expense of other intangible assets as follows:

Amortization expense of other intangible assets was as follows:

Year Ended December 31,

1 unchanged sentence

Amortization expense $ 6.8 $ 6.7 $ 6.6

We estimate amortization expense for the five years subsequent to 2024 as follows:

NOTE 9 — Financing Arrangements

PARK-OHIO HOLDINGS CORP.

1 unchanged sentence

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

We estimate amortization expense for the five years subsequent to 2023 as follows:

NOTE 9 — Financing Arrangements

Debt consists of the following:

11 unchanged sentences

$ 618.3 $ 633.4

On September 13, 2023, Park-Ohio Industries, Inc.

(“Park-Ohio”), the operating subsidiary of the Company, entered into the Eighth Amended and Restated Credit Agreement (the “Credit Agreement”).

In September 2023, Park-Ohio Industries, Inc.

(“Park-Ohio”), the operating subsidiary of the Company, 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.

7 unchanged sentences

The fair value was estimated using quoted market prices.

PARK-OHIO HOLDINGS CORP.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

December 31, 2024 December 31, 2023

5 unchanged sentences

The weighted average interest rate on all debt was approximately 7.0 % in 2024, 6.6 % in 2023 and 5.1 % in 2022.

PARK-OHIO HOLDINGS CORP.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

NOTE 10 — Income Taxes

Income (loss) from continuing operations before income taxes consists of the following:

(Loss) income from continuing operations before income taxes consists of the following:

Year Ended December 31,

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$ 44.4 $ 41.5 $ 10.7

Income taxes consists of the following:

Income tax expense (benefit) consists of the following:

Year Ended December 31,

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Foreign 15.6 13.9 9.4

19.5 15.7 7.6

Deferred (benefit) expense:

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Income tax expense (benefit) $ 4.9 $ 8.5 $ ( 0.7 )

PARK-OHIO HOLDINGS CORP.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

In 2024, the effective tax rate of 11.0 % was less than the U.S.

statutory rate of 21%, primarily as a result of the tax benefit of the research and development tax credit and the release of certain valuation allowances.

Several countries in which Park-Ohio Holdings does business have proposed or enacted new laws or are actively considering changes to their tax laws to align with the Organization for Economic Co-operation and Development (“OECD”) proposals.

Significant details around the provisions are still uncertain as the OECD and participating countries continue to work on defining the underlying rules and administrative procedures.

Enactment of this and similar legislation could significantly increase our tax obligations in countries where we do business.

We will continue to monitor and reflect the impact of such legislative changes in future financial statements as appropriate.

During 2024, certain countries in which Park-Ohio Holdings operates enacted Pillar Two laws, but these countries’ results did not have a material impact on income tax expense.

In 2023, the effective tax rate of 20.5 % approximated the U.S.

3 unchanged sentences

The completed study resulted in additional research and development tax credit benefits being recorded in 2022.

The Coronavirus Aid, Relief, and Economic Security (“CARES”) Act was enacted on March 27, 2020 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 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.

The Company has recorded a significant benefit for the impact of the net operating loss carryback, which provides for refunds related to tax years in which the U.S.

tax rate was 35% versus the current U.S.

tax rate of 21%.

This additional tax benefit of 14% increased the 2021 tax benefit.

A reconciliation of income tax expense (benefit) computed by applying the statutory federal income tax rate to income tax benefit as recorded is as follows:

PARK-OHIO HOLDINGS CORP.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Year Ended December 31,

2024 2023 2022

Income tax expense (benefit) at U.S.

Income tax expense at U.S.

statutory rate $ 9.3 $ 8.7 $ 2.3

5 unchanged sentences

Equity compensation 0.8 1.4 1.4

CARES Act NOL carryback — — ( 3.1 )

Foreign tax credit ( 4.7 ) ( 4.3 ) ( 4.1 )

4 unchanged sentences

Income tax expense (benefit) as recorded $ 4.9 $ 8.5 $ ( 0.7 )

PARK-OHIO HOLDINGS CORP.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Significant components of the Company’s net deferred income tax assets and liabilities are as follows:

23 unchanged sentences

The foreign net operating loss carryforward is $ 16.0 million, of which $ 11.6 million expires between 2025 and 2043 and the remainder has no expiration date.

The Company has a tax benefit from a state net operating loss carryforward of $ 3.9 million, of which $ 3.5 million expires between 2024 and 2043 and the remainder has no expiration date.

The Company has a tax benefit from a state net operating loss carryforward of $ 4.2 million, of which

PARK-OHIO HOLDINGS CORP.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

$ 3.8 million expires between 2025 and 2044 and the remainder has no expiration date.

The Company also has a non-consolidated U.S.

1 unchanged sentence

The Company has recorded a valuation allowance of $ 4.9 million against these net operating loss carryforwards in jurisdictions where those losses are not expected to be realized.

The foreign tax credit carryforward is $ 1.9 million and expires between 2031 and 2033.

The foreign tax credit carryforward is $ 1.2 million and expires in 2032.

research and development tax credit carryforward is $ 6.1 million and expires between 2031 and 2044.

As of December 31, 2023 and 2022, the Company was in a cumulative three-year loss position.

As of December 31, 2024 and 2023, the Company was in a cumulative three-year loss position in the U.S.

The Company has determined that it was more likely than not that its U.S.

8 unchanged sentences

Unrecognized Tax Benefit — December 31 $ 1.2 $ 0.5 $ 0.8

PARK-OHIO HOLDINGS CORP.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

The total amount of unrecognized tax benefits that, if recognized, would affect the effective tax rate is $ 0.1 million at both December 31, 2023 and December 31, 2022.

The total amount of unrecognized tax benefits that, if recognized, would affect the effective tax rate is $ 0.8 million and $ 0.1 million at December 31, 2024 and December 31, 2023, respectively.

The Company recognizes accrued interest and penalties related to unrecognized tax benefits in income tax expense.

During 2024 and 2023, the Company recognized a tax benefit of approximately $ 0.1 million in net interest and penalties due to the expiration of various uncertain tax positions.

The Company had approximately $ 0.1 million for the payment of interest and penalties accrued at both December 31, 2023 and 2022.

The Company had approximately $ 0.1 million for the payment of interest and penalties accrued at December 31, 2023.

It is reasonably possible that, within the next twelve months, the amount of gross unrecognized tax benefits could be reduced by approximately $ 0.4 million as a result of the closure of tax statutes related to existing uncertain tax positions.

3 unchanged sentences

As of December 31, 2024, the Company has accumulated undistributed earnings generated by our foreign subsidiaries of approximately $ 325.6 million.

Because $ 135.9 million of such earnings have previously been subject to the one-time transition taxes required by the U.S.

Tax Cuts and Jobs Act (the “TCJA”), any additional taxes due with respect to such earnings or the excess of the amount for financial reporting over the tax basis of our foreign investments would generally be limited to foreign withholding and state income taxes.

We intend, however, to indefinitely reinvest these earnings and expect future U.S.

We intend to indefinitely reinvest these earnings and expect future U.S.

cash generation to be sufficient to meet future U.S.

2 unchanged sentences

Compensation expense for awards with service conditions only that are subject to graded vesting is recognized on a straight-line basis over the term of the vesting period.

A summary of time-based and performance-based activity for the year ended December 31, 2023 is as follows:

Time-Based Performance-Based

Shares Weighted

Fair Value Number of

Shares Weighted

(in whole shares) (in whole shares)

A summary of activity for the year ended December 31, 2024 is as follows:

PARK-OHIO HOLDINGS CORP.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Shares Weighted Average

Grant Date Fair Value

(in whole shares)

Outstanding — beginning of year 755,064 $ 18.70

4 unchanged sentences

(a) Included in the granted amount are 2,175 restricted share units.

The Company recognized compensation expense of $ 6.5 million, $ 7.2 million and $ 6.5 million for the years ended December 31, 2023, 2022 and 2021, respectively, relating to time-based awards and performance-based awards.

The 50,000 share performance-based award in 2019 relates to a five-year cumulative profit target through 2023.

As of December 31, 2023, these shares have expired and no compensation expense was recognized as achievement of the performance target was not met.

The Company recognized compensation expense of $ 5.6 million, $ 6.5 million and $ 7.2 million for the years ended December 31, 2024, 2023 and 2022, respectively, relating to stock-based awards.

The total fair value of restricted shares and share units that vested during the years ended December 31, 2024, 2023 and 2022 was $ 5.9 million, $ 6.9 million and $ 6.5 million, respectively.

1 unchanged sentence

The unrecognized compensation expense is expected to be recognized over a total weighted average period of 1.9 years.

PARK-OHIO HOLDINGS CORP.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

NOTE 12 — Commitments and Contingencies

15 unchanged sentences

Despite this uncertainty, 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.

Among the factors management considered in reaching this conclusion were:

Among the factors

PARK-OHIO HOLDINGS CORP.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

management considered in reaching this conclusion were:

(a) our historical success in being dismissed from these types of lawsuits on the bases mentioned above;

12 unchanged sentences

The incremental borrowing rate is calculated based on lease term, currency and collateral adjustments.

During 2024, the Company obtained right-of-use assets in exchange for new operating lease liabilities of $ 7.4 million.

Balance Sheet as of December 31, 2024 and 2023

PARK-OHIO HOLDINGS CORP.

1 unchanged sentence

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

During 2023, the Company obtained right-of-use assets in exchange for new operating lease liabilities of $ 2.0 million.

Balance Sheet as of December 31, 2023 and 2022

Classification on the Balance Sheet December 31, 2024 December 31, 2023

24 unchanged sentences

Cash Flow Information for 2024, 2023 and 2022

PARK-OHIO HOLDINGS CORP.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

2024 2023 2022

2 unchanged sentences

Operating cash outflows for finance leases $ ( 0.9 ) $ ( 1.0 ) $ ( 0.3 )

Financing cash inflows (outflows) for finance leases $ 0.9 $ 8.5 $ ( 0.3 )

Financing cash inflows for finance leases $ 0.7 $ 0.9 $ 8.5

PARK-OHIO HOLDINGS CORP.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Maturities of Lease Liabilities as of December 31, 2024, were as follows:

1 unchanged sentence

2025 $ 12.5 $ 3.8

2025 10.2 3.0

Thereafter 5.8 1.8

25 unchanged sentences

Interest cost 3.4 3.5 0.2 0.3

Actuarial loss (gain) 3.2 ( 15.8 ) 0.2 ( 0.8 )

Actuarial (gain) loss ( 1.2 ) 3.2 ( 0.5 ) 0.2

Benefits and expenses paid ( 8.5 ) ( 6.2 ) ( 0.7 ) ( 0.7 )

3 unchanged sentences

Fair value of plan assets at beginning of year $ 147.9 $ 131.5 $ 3.4 $ 3.6

Actual return (loss) on plan assets 22.6 ( 32.0 ) 0.5 0.1

Actual return on plan assets 16.7 22.6 0.4 0.5

Benefits and expenses paid ( 8.5 ) ( 6.2 ) ( 0.7 ) ( 0.7 )

5 unchanged sentences

Pension assets $ 85.3 $ 75.1 $ — $ —

Other current liabilities — — — —

Other long-term liabilities — — 0.9 1.6

60 unchanged sentences

Discount rate 5.55 % 5.14 % 5.48 % 5.43 % 5.06 % 5.41 %

Rate of compensation increase 3.00 % 3.00 % 3.00 % N/A N/A N/A

Rate of compensation increase 3.00 % to 7.00 %

3.00 % 3.00 % N/A N/A N/A

Health care cost trend rate N/A N/A N/A 6.50 % 6.75 % 7.00 %

6 unchanged sentences

Expected return on plan assets 7.50 % 7.75 % 7.75 % 7.50 % 7.75 % 7.75 %

Rate of compensation increase 3.00 % 3.00 % 3.00 % N/A N/A N/A

Rate of compensation increase 3.00 % to 7.00 %

3.00 % 3.00 % N/A N/A N/A

Medical health care benefits rate increase N/A N/A N/A 6.50 % 6.75 % 7.00 %

11 unchanged sentences

Recognized net actuarial loss 1.8 3.6 — 0.2 0.3 0.2

Benefit costs (income) - continuing operations 1.5 ( 6.8 ) ( 5.9 ) 0.3 — 0.4

Benefit (income) costs - continuing operations ( 1.1 ) 1.5 ( 6.8 ) 0.2 0.3 —

Curtailment loss - discontinued operations — 0.4 — — — —

Total benefit (income) costs $ ( 1.1 ) $ 1.9 $ ( 6.8 ) $ 0.2 $ 0.3 $ —

Other changes in plan assets and benefit obligations recognized in accumulated other comprehensive (income) loss (“AOCI”)

Other changes in plan assets and benefit obligations recognized in accumulated other comprehensive loss (income) (“AOCI”)

AOCI at beginning of year $ 26.9 $ 40.0 $ 10.9 $ 2.0 $ 2.4 $ 2.2

Net income arising during the year ( 3.7 ) — ( 0.8 ) ( 0.3 ) ( 0.2 ) ( 0.3 )

Net loss amortization ( 1.8 ) ( 3.7 ) — ( 0.2 ) ( 0.3 ) ( 0.2 )

Recognition of actuarial (gain) loss ( 7.3 ) ( 9.4 ) 29.1 ( 0.8 ) ( 0.1 ) 0.4

38 unchanged sentences

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Effective February 29, 2024, the Company acquired all of the outstanding shares of EMA Indutec GmbH (“EMA”), headquartered in Meckesheim, Germany, from the Aichelin Group, headquartered in Modling, Austria.

EMA, a leading manufacturer of induction heating equipment and converters, operates through its two locations in Meckesheim, Germany and Beijing, China.

The acquisition strengthens our global induction heating expertise throughout Europe and expands our portfolio of induction equipment brands and our aftermarket service capabilities.

The cash purchase price for the acquisition was approximately $ 14 million.

Supplementary Financial Data

PARK-OHIO HOLDINGS CORP.

SCHEDULE II — VALUATION AND QUALIFYING ACCOUNTS AND RESERVES

Description Balance at

Period Charged to

Expenses Deductions

Other Balance at

Year Ended December 31, 2023:

Allowances deducted from assets:

Trade receivable allowances $ 3.8 2.3 ( 2.5 ) (A) $ 3.6

Inventory reserves 38.5 9.2 ( 4.8 ) (B) 42.9

Tax valuation allowances 8.6 ( 1.3 ) — 7.3

Year Ended December 31, 2022:

Allowances deducted from assets:

Trade receivable allowances $ 5.2 1.9 ( 3.3 ) (A) $ 3.8

Inventory reserves 37.5 8.4 ( 7.4 ) (B) 38.5

Tax valuation allowances 6.1 2.5 — 8.6

Year Ended December 31, 2021:

Allowances deducted from assets:

Trade receivable allowances $ 5.1 3.0 ( 2.9 ) (A) $ 5.2

Inventory reserves 39.3 12.2 ( 14.0 ) (B) 37.5

Tax valuation allowances 6.5 ( 0.4 ) — 6.1

Note (A)- Uncollectible accounts written off, net of recoveries.

Note (B)- Amounts written off.

Changes in and Disagreements With Accountants on Accounting and Financial Disclosure

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-K

Item 8. Financial Statements and Supplementary Data