What changed in this filing

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Item 7. Management’s Discussion and Analysis

2026-03-05 compared with 2025-03-06 · 57 added, 52 removed, 293 unchanged (27% of the section changed)

9 unchanged sentences

Business for descriptions of our business segments.

On December 29, 2023, the Company completed the sale to Angstrom Automotive Group (“Angstrom”) of its Aluminum Products business, which has been classified as a discontinued operation for all periods presented.

On December 29, 2023, the Company completed the sale of its Aluminum Products business, which has been classified as a discontinued operation for all periods presented.

Subsequent Events

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Restructuring and other special charges 6.4 4.9 6.6 1.5 31 % (1.7) (26) %

Asset impairment charges 8.9 — — 8.9 * — *

Gains on sales of assets, net — (2.5) (0.8) 2.5 * (1.7) *

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Interest expense, net (47.5) (47.4) (45.1) (0.1) — % (2.3) 5 %

Loss on extinguishment of debt (2.0) — — (2.0) * — *

Income from continuing operations before income taxes 23.8 44.4 41.5 (20.6) (46) % 2.9 7 %

Income tax (expense) benefit (4.9) (8.5) 0.7 3.6 (42) % (9.2) 1,314 %

Income tax expense (2.8) (4.9) (8.5) 2.1 (43) % 3.6 42 %

Income from continuing operations 21.0 39.5 33.0 (18.5) (47) % 6.5 20 %

Loss (income) attributable to noncontrolling interest 2.7 1.0 (1.3) 1.7 170 % 2.3 177 %

Loss attributable to noncontrolling interests 3.8 2.7 1.0 1.1 41 % 1.7 (170) %

Income from continuing operations attributable to ParkOhio common shareholders $ 24.8 $ 42.2 $ 34.0 $ (17.4) (41) % $ 8.2 24 %

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Net sales were $1,599.1 million in 2025 compared to $1,656.2 million in 2024, a decrease of 3.4%.

The decrease was primarily due to lower sales in the Assembly Components segment, partially offset by higher sales in our Supply Technologies segment and in the capital equipment business in our Engineered Products segment.

The decrease was primarily due to lower customer demand in each of our business segments.

The factors explaining the changes in segment net sales for the year ended December 31, 2025 compared to the year ended December 31, 2024 are contained in the “Segment Results” section below.

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Cost of sales decreased 3.4% to $1,327.9 million in 2025 compared to $1,374.8 million in 2024.

The decrease was driven by ongoing profit improvement initiatives and the decrease in net sales described above.

Gross margin was 17.0% in 2024 compared to 16.4% in 2023.

The gross margin improvement was driven by improved operating profit in our Supply Technologies segment;

higher sales and improved margins in our capital equipment business;

and ongoing profit improvement initiatives.

The decrease was primarily due to the decrease in net sales in for 2025 compared to 2024 and the impact of ongoing profit improvement initiatives.

Gross margin was 17.0% in both periods.

SG&A Expenses

SG&A expenses increased to $189.6 million, or 11.9% of net sales, in 2025 from $187.4 million, or 11.3% of net sales, in 2024.

The SG&A expense increase was driven by SG&A expenses in our acquired EMA Indutec GmbH (“EMA”) business, ongoing inflation and higher employee costs.

The increases were driven by ongoing inflation, higher employee costs and fixed SG&A costs over lower sales levels.

Restructuring and Other Special Charges

During 2025, the Company recorded restructuring and other special charges of $6.4 million compared to $4.9 million in 2024.

The charges in both years relate primarily to plant closure and consolidation activities and other initiatives in the Company’s Assembly Components and Engineered Products segments.

The charges in both years relate primarily to plant closure and consolidation activities and other initiatives in each of our business segments.

Asset Impairment Charges

During 2025, the Company recorded non-cash asset impairment charges in its Engineered Products segment totaling $8.9 million to write-down the carrying value of certain assets, primarily at its forging operations in Arkansas.

Gains on Sales of Assets, net

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The Company also sold real estate within its Assembly Components segment for cash proceeds of $2.2 million, resulting in a net gain of $1.7 million.

The total net gain of $2.5 million is recorded on a separate line in the Consolidated Statements of Operations and is excluded from segment income.

During 2023, in connection with its plant closure and consolidation initiatives, the Company sold real estate within its Engineered Products segment for cash proceeds of $1.4 million, resulting in a net gain of $0.8 million.

The Company also sold other real estate for cash proceeds of $0.6 million.

The total net gain of $0.8 million is recorded on a separate line in the Consolidated Statements of Operations and is excluded from segment income.

The total net gain of $2.5 million is recorded on a separate line in the Consolidated Statements of Income and is excluded from segment income.

Other Components of Pension and Other Postretirement Benefits (“OPEB”) I ncome, Net

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Interest expense, net increased to $47.5 million in 2025 compared to $47.4 million in 2024.

The increase was due to higher average interest rates partially offset by lower average outstanding borrowings in 2024 compared to 2023.

Our average effective borrowing rate was 7.0% in 2024 compared to 6.6% in 2023.

The increase was due to higher interest on our 8.500% Senior Secured Notes due 2030 (the “2030 Notes”) that were issued in July 2025 compared to the 6.625% Senior Notes due 2027 (the “2027 Notes”), partially offset by lower average outstanding debt balances in 2025 compared to a year ago and lower borrowing rates in 2025 compared to 2024 on its Seventh Amended and Restated Credit Agreement (the “Credit Agreement”).

Loss on Extinguishment of Debt

During 2025, Park-Ohio Industries, Inc.

(“Park-Ohio”) issued the 2030 Notes and used the net proceeds, along with cash on hand, to redeem all of the outstanding 2027 Notes.

In connection with this transaction, the Company recorded a $2.0 million loss on extinguishment of debt.

Income Tax Expense

Income tax expense in 2025 was $2.8 million on pre-tax income of $23.8 million, for an effective tax rate of 11.8%, which 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.

Income tax expense in 2024 was $4.9 million on pre-tax income of $44.4 million, for an effective tax rate of 11.0%, which 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.

Income tax expense in 2023 was $8.5 million on pre-tax income of $41.5 million, for an effective tax rate of 20.5%, which approximated the U.S.

statutory rate of 21%, as the tax benefits of the foreign tax credit and research and development tax credit were offset by the tax expense of foreign earnings, GILTI and non-deductible expenses.

SEGMENT RESULTS

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unusual in nature;

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;

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

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

loss on extinguishment of debt;

gains on sales of assets;

other expenses;

other unallocated expenses;

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

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2025 Compared to 2024

Net sales increased 1.6% in 2024 compared to 2023 due to continued strong demand in many of the Company's key end markets, with the largest increases in the aerospace and defense, heavy-duty truck, electrical distribution and consumer electronics end markets, partially offset by decreases in the power sports and industrial and agricultural equipment end markets.

In addition, net sales benefited from higher customer demand for our proprietary products throughout North America and Europe in our fastener manufacturing business.

Segment operating income increased $16.0 million to $75.0 million in 2024 compared to 2023, and segment operating income margin increased 200 basis points in 2024 compared to a year ago.

These increases were due primarily to the increase in sales, profit improvement initiatives and higher profit flow-through from strong demand in our fastener manufacturing business.

Net sales decreased 3.6% in 2025 compared to 2024 due primarily to lower customer demand in certain end markets in our supply chain business, including power sports, heavy-duty truck and bus, industrial and agricultural equipment and aerospace and defense, partially offset by increases in the electrical and semiconductor end markets.

Sales in our fastener manufacturing business were down 9.7% year-over-year, driven by overall market softness.

Segment operating income was $72.3 million in 2025 compared to $75.0 million in 2024.

Segment operating income margin was 9.7% in both 2025 and 2024.

In 2025, profit-improvement actions, including alignment of variable costs to lower demand levels, partially offset the impact of lower sales levels on profitability.

In 2025 and 2024, charges related to restructuring and other special charges were $1.4 million and $0.2 million, respectively.

Assembly Components Segment

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2025 Compared to 2024

Net sales decreased 6.8% in 2024 compared to 2023 due primarily to lower product pricing on certain legacy programs and lower unit volumes primarily on end-of-life programs, partially offset by higher product pricing on certain other programs.

Net sales decreased 4.5% in 2025 compared to 2024 due primarily to lower unit volumes in our fuel rail and extruded rubber products, customer production delays on new business launches, and favorable pricing that ended in 2024 on certain legacy programs.

Segment operating income was $19.1 million in 2025 compared to $25.4 million in 2024, and segment operating income margin decreased 140 basis points in 2025 compared to a year ago.

The decreases were due to the lower product pricing and unit volumes, which were partially offset by profit enhancement initiatives in 2024.

The decreases were due to lower unit sales volumes.

During 2025 and 2024, we incurred $2.8 million and $1.1 million, respectively, of charges related to restructuring activities.

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2025 Compared to 2024

Net sales were 2.8% higher in 2024 compared to 2023 driven by higher new capital equipment and aftermarket sales in our capital equipment business.

Segment operating income in 2024 decreased $1.4 million compared to 2023, and segment operating margin decreased 40 basis points in 2024 compared to 2023, as a result of higher operating costs in our forged and machined products business, partially offset by the higher sales and improved margins in our capital equipment business.

Net sales decreased 2.2% in 2025 compared to 2024 driven by lower sales in our forged and machined products business, driven by lower orders, order delays and closure of a small manufacturing operation in 2024, partially offset by a $5.8 million increase in sales in our industrial equipment business.

Segment operating income was $6.6 million in 2025 compared to $17.7 million 2024, and segment operating margin decreased 230 basis points in 2025 compared to 2024, driven by lower sales.

In addition, restructuring and other special charges were $1.9 million in 2025 and $3.6 million in 2024.

During 2025, an $8.9 million non-cash asset impairment charge was recorded to write-down the carrying value of certain assets, primarily at its forging operations in Arkansas.

Liquidity and Capital Resources

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Effect of exchange rate changes on cash 1.8 (2.2) 0.9

(Decrease) increase in cash and cash equivalents $ (1.7) $ (3.4) $ 4.1

Decrease in cash and cash equivalents $ (8.3) $ (1.7) $ (3.4)

Operating Activities

In 2025, we generated positive operating cash flow of $42.3 million compared to $35.0 million in 2024.

Cash flow from operating activities was lower in 2024 due to higher working capital needs, which more than offset higher profitability in 2024.

Cash flow from operating activities was higher in 2025 due to lower working capital needs, which more than offset lower profitability in 2025.

Investing Activities

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These capital expenditures were primarily for growth initiatives, including information technology investments across all three of our segments, and to maintain existing operations.

In 2024 and 2023, we sold assets and received aggregate proceeds of $11.5 million and $2.0 million, respectively.

In 2024, we sold assets and received aggregate proceeds of $11.5 million.

See Note 5 to the consolidated financial statements included elsewhere herein for additional information.

We spent $11.0 million for the acquisition of EMA.

Additionally, in 2023, we received $15.5 million in connection with the sale of our Aluminum Products business.

In 2024, we spent $11.0 million for the acquisition of EMA Indutec GmbH.

Financing Activities

Cash provided by financing activities in 2025 included net debt borrowings of $6.7 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 the 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 $7.8 million.

Cash provided by financing activities in 2024 included debt repayments of $16.0 million, payments related to prior acquisitions of $3.0 million, dividends to shareholders and noncontrolling interest partners totaling $7.2 million, and payments of withholding taxes on share awards of $2.6 million.

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Crawford, one of our Board members.

Cash used by financing activities in 2023 included debt repayments of $24.3 million, payments related to prior acquisitions of $2.9 million, dividends to shareholders and noncontrolling interest partners totaling $7.4 million, and payments of withholding taxes on share awards of $2.0 million.

Overall, we were able to pay down debt and fund capital expenditures in 2024 using cash flows from operations, cash proceeds from asset sales and proceeds from common stock issuances.

See Note 10 to the consolidated financial statements included elsewhere herein for further discussion of our financing arrangements.

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to have a material effect on our overall liquidity, financial condition or results of operations for the foreseeable future.

In April 2017, Park-Ohio Industries, Inc.

(“Park-Ohio”), the operating subsidiary of Park-Ohio Holdings Corp., completed the sale, in a private placement, of $350.0 million aggregate principal amount of 6.625% Senior Notes due 2027 (the “Notes”).

The net proceeds from the issuance of the Notes were used to repay in full our previously outstanding 8.125% Senior Notes due 2021 and our outstanding term loan, and to repay a portion of the borrowings then outstanding under our revolving credit facility.

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 redeem in full the 2027 Notes and pay related fees and expenses.

Credit Agreement

In September 2023, Park-Ohio amended its Seventh Amended and Restated Credit Agreement (the “Credit Agreement”).

On July 17, 2025, Park-Ohio amended its Credit Agreement, in order to, among other things, (a) extend the maturity date to the fifth anniversary from the closing of the 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 by an aggregate incremental amount up to $70.0 million.

The Credit Agreement matures on January 14, 2027.

Pursuant to the Credit Agreement, Park-Ohio has the option to increase the availability under the revolving credit facility.

Finance Leases

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The dividend was paid on February 20, 2026, to shareholders of record as of the close of business on February 6, 2026 and resulted in cash payments of $1.8 million.

capital requirements, contractual restrictions, business prospects and other factors that our Board of Directors may deem relevant.

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.

Contractual and Other Obligations and Commitments

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See Note 15 to the consolidated financial statements included elsewhere herein for additional information of future pension and postretirement benefit obligations.

Interest payable associated with our 6.625% Senior Notes due 2027 is $23.2 million due in the twelve months following December 31, 2024 and $29.9 million due thereafter.

Interest payable associated with our 2030 Notes is $29.8 million due in the twelve months following December 31, 2025 and $106.6 million due thereafter.

As of December 31, 2025, our undiscounted purchase obligations were $144.0 million due in the next twelve months and $0.1 million due thereafter under purchase orders and "take or pay" arrangements.

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Inventories identified by management as slow-moving or obsolete are reserved for based on estimated selling prices less disposal costs.

Though we consider these allowances

adequate and proper, changes in economic conditions in specific markets in which we operate could have a material effect on allowances required.

Though we consider these allowances adequate and proper, changes in economic conditions in specific markets in which we operate could have a material effect on allowances required.

Business Combinations:

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Our estimates are based upon assumptions we believe to be reasonable, but which by nature are uncertain and unpredictable.

We believe we incorporate ample sensitivity ranges into our analysis of intangible impairment testing, such that actual experience would need to be materially out of the range of expected assumptions in order for an impairment to remain undetected.

The results of testing as of October 1, 2024, 2023 and 2022 for all reporting units confirmed that the estimated fair value exceeded carrying values, and no impairment existed as of those dates.

We believe we incorporate ample sensitivity ranges into our analysis of

intangible impairment testing, such that actual experience would need to be materially out of the range of expected assumptions in order for an impairment to remain undetected.

The results of testing as of October 1, 2025, 2024 and 2023 for all indefinite-lived intangible assets confirmed that the estimated fair value exceeded carrying values, and no impairment existed as of those dates.

See Notes 8 and 9 of the consolidated financial statements included elsewhere herein for additional disclosure on goodwill and indefinite-lived intangibles.

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The Company’s pension plans are funded.

The weighted-average expected long-term rate of return on assets assumption is 7.50% and 7.75% for 2024 and 2023, respectively.

The weighted-average expected long-term rate of return on assets assumption is 7.50% for both 2025 and 2024, respectively.

In determining the expected return on plan assets, we consider both historical performance and an estimate of future long-term rates of return on assets similar to those in our plan.

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When a single amount cannot be reasonably estimated, but the cost can be estimated within a range and no amount within the range is a better estimate than any other amount, we accrue the minimum amount in the range.

Based upon facts and information currently available, we believe the amounts reserved are adequate for such pending matters.

Based upon facts and information currently available, we believe the amounts

reserved are adequate for such pending matters.

We monitor the development of legal proceedings on a regular basis and will adjust our reserves when, and to the extent, additional information becomes available.

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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 7. Management’s Discussion and Analysis