QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2026
or
☐
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from __________ to __________
Commission file number: 000-03134
Park-Ohio Holdings Corp.
(Exact name of registrant as specified in its charter)
Ohio
34-1867219
(State or other jurisdiction of incorporation or organization)
(I.R.S. Employer Identification No.)
6065 Parkland Boulevard,
Cleveland,
Ohio
44124
(Address of principal executive offices)
(Zip Code)
(440) 947-2000
(Registrant’s telephone number, including area code)
Not applicable
(Former name, former address and former fiscal year, if changed since last report)
Securities registered pursuant to Section 12(b) of the Act:
Title of each class
Trading Symbol(s)
Name of each exchange on which registered
Common Stock, Par Value $1.00 Per Share
PKOH
The NASDAQ Stock Market LLC
Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding twelve months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days. ☑Yes☐ No
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). ☑Yes☐ No
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer
☐
Accelerated filer
☑
Non-accelerated filer
☐
Smaller reporting company
☐
Emerging growth company
☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accountings standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). ☐ Yes ☑ No
Number of shares outstanding of registrant’s Common Stock, par value $1.00 per share, as of April 30, 2026: 14,398,169 shares.
Notes to Condensed Consolidated Financial Statements (Unaudited)
March 31, 2026
NOTE 1 — Basis of Presentation
The condensed consolidated financial statements include the accounts of Park-Ohio Holdings Corp. and its subsidiaries (collectively, “we,” “our” or the “Company”). All intercompany accounts and transactions have been eliminated in consolidation.
The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles in the United States (“U.S. GAAP”) for complete financial statements. 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-month period ended March 31, 2026 are not necessarily indicative of the results that may be expected for the year ending December 31, 2026. The balance sheet at December 31, 2025 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. For further information, refer to the consolidated financial statements and footnotes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025.
The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.
NOTE 2 — New Accounting Pronouncements
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. This 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 of this guidance 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 guidance on our consolidated financial statement disclosures.
In December 2025, the FASB issued ASU No. 2025-11, Interim Reporting (Topic 270): Narrow-scope improvements. The guidance clarifies the scope, form, and content of interim financial statement disclosures and improves the navigability of Topic 270 without changing existing interim reporting requirements. This ASU is effective for fiscal years beginning after December 15, 2027, and interim periods within those annual reporting periods, with early adoption permitted. We are in the process of evaluating the impact of adopting this guidance on our consolidated financial statement disclosures.
No other recently-issued accounting standard updates are expected to have a material impact on our results of operations, financial condition or liquidity.
NOTE 3 — Revenue
We disaggregate our revenue by product line and geographic region of our customers as we believe these metrics best depict how the nature, amount, timing and uncertainty of our revenues and cash flows are affected by economic factors. See details in the tables below.
Notes to Condensed Consolidated Financial Statements (Unaudited)
March 31, 2026
Three Months Ended March 31,
2026
2025
(In millions)
PRODUCT LINE
Supply technologies
$
168.9
$
161.1
Engineered specialty fasteners and other products
26.2
26.7
Supply Technologies Segment
195.1
187.8
Fuel, rubber and plastic products
100.2
96.9
Assembly Components Segment
100.2
96.9
Industrial equipment
92.8
90.0
Forged and machined products
32.9
30.7
Engineered Products Segment
125.7
120.7
Total
$
421.0
$
405.4
Supply Technologies Segment
Assembly Components Segment
Engineered Products Segment
Total Revenues
(In millions)
Three Months Ended March 31, 2026
GEOGRAPHIC REGION
United States
$
103.4
$
60.0
$
75.2
$
238.6
Europe
46.5
4.4
20.3
71.2
Asia
20.2
8.1
20.2
48.5
Mexico
20.6
16.5
2.8
39.9
Canada
3.5
9.9
4.3
17.7
Other
0.9
1.3
2.9
5.1
Total
$
195.1
$
100.2
$
125.7
$
421.0
Three Months Ended March 31, 2025
GEOGRAPHIC REGION
United States
$
108.6
$
60.1
$
67.2
$
235.9
Europe
40.4
4.4
14.9
59.7
Asia
17.7
8.4
20.2
46.3
Mexico
17.5
15.1
5.5
38.1
Canada
3.1
7.8
9.2
20.1
Other
0.5
1.1
3.7
5.3
Total
$
187.8
$
96.9
$
120.7
$
405.4
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 $53.0 million and $49.4
Notes to Condensed Consolidated Financial Statements (Unaudited)
March 31, 2026
million at March 31, 2026 and December 31, 2025, respectively, are recorded in Other current assets in the Condensed Consolidated Balance Sheets.
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 $58.4 million and $56.9 million at March 31, 2026 and December 31, 2025, respectively, are recorded in Accrued expenses and other in the Condensed Consolidated Balance Sheets.
NOTE 4 — Segments
The Company operates three reportable segments: Supply Technologies, Assembly Components and Engineered Products. 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 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; other components of pension and other postretirement benefits income, net; and interest expense, net.
Notes to Condensed Consolidated Financial Statements (Unaudited)
March 31, 2026
Three Months Ended March 31,
2026
2025
Capital expenditures:
Supply Technologies
$
3.7
$
4.7
Assembly Components
2.0
1.4
Engineered Products
4.7
3.1
Corporate
2.1
0.3
$
12.5
$
9.5
Depreciation and amortization:
Supply Technologies
$
1.8
$
1.6
Assembly Components
3.1
3.4
Engineered Products
3.1
3.1
Corporate
0.3
0.2
$
8.3
$
8.3
March 31, 2026
December 31, 2025
Identifiable assets:
Supply Technologies
$
501.0
$
489.4
Assembly Components
300.1
293.3
Engineered Products
464.4
465.9
Corporate
171.0
171.0
$
1,436.5
$
1,419.6
NOTE 5 — Inventories
Inventories, net consist of the following:
March 31, 2026
December 31, 2025
(In millions)
Raw materials and supplies
$
112.0
$
107.5
Work-in-process
49.7
53.3
Finished goods
264.9
260.1
Inventories, net
$
426.6
$
420.9
NOTE 6 — Income Taxes
The Company’s tax provision for interim periods is determined using an estimate of its annual effective rate, adjusted for discrete items in each period, if any.
In the three months ended March 31, 2026, income tax expense was $1.6 million on pre-tax income from continuing operations of $9.5 million, representing an effective income tax rate of 17%. In the three months ended March 31, 2025, income tax expense was $1.9 million on pre-tax income of $9.7 million, representing an effective income tax rate of 20%. The rate for the three months ended March 31, 2026 is lower than the statutory rate and the corresponding 2025 rate due primarily to increased federal research and development tax credit benefit.
Notes to Condensed Consolidated Financial Statements (Unaudited)
March 31, 2026
NOTE 7 — Financing Arrangements
Debt consists of the following:
Carrying Value at
Maturity Date
Interest Rate at March 31, 2026
March 31, 2026
December 31, 2025
(In millions)
Senior Secured Notes
July 31, 2030
8.500
%
$
348.5
$
348.4
Revolving credit facility
July 17, 2030
5.27
%
282.8
257.4
Finance Leases
Various
Various
16.0
16.6
Other
Various
Various
11.7
13.3
Total debt
659.0
635.7
Less: Current portion of long-term debt and short-term debt
(6.4)
(8.3)
Less: Unamortized debt issuance costs
(6.4)
(6.7)
Total long-term debt
$
646.2
$
620.7
In July 2025, Park-Ohio Industries, Inc. (“Park-Ohio”) completed the issuance of $350.0 million aggregate principal amount of 8.500% Senior Secured Notes due 2030 (the “2030 Notes”), in a private offering. The 2030 Notes were priced at 99.50% of par. The 2030 Notes are senior secured obligations of Park-Ohio and are guaranteed (with certain exceptions) by Park-Ohio's domestic subsidiaries that guarantee the debt under the Credit Agreement on a senior secured basis.
In July 2025, Park-Ohio amended its Seventh Amended and Restated Credit Agreement (the “Credit Agreement”), in order to, among other things, (a) extend the maturity date to the fifth anniversary from the closing of the revolving credit facility amendment, (b) permit the issuance of the 2030 Notes and (c) permit the 2030 Notes to be secured by (i) a first-priority lien on the substantially all of the U.S. equipment (including machinery) of the Park-Ohio and the Park-Ohio’s existing and future domestic subsidiaries (the “Guarantors”) that guarantee debt under the Credit Agreement (the “Notes Priority Collateral”) and (ii) a second-priority lien (junior to the Credit Agreement) on substantially all of the U.S. assets of Park-Ohio and the Guarantors (including the 65% pledge of the foreign equity owned by the Guarantors), other than assets constituting Notes Priority Collateral, securing the revolving credit facility (the “ABL Priority Collateral”). The Credit Agreement provides for a revolving credit facility in the amount of $405.0 million, including a $40.0 million Canadian revolving subcommitment and a European revolving subcommitment in the amount of $30.0 million. Pursuant to the Credit Agreement, Park-Ohio has the option to increase the availability under the revolving credit facility. As of March 31, 2026, we had borrowing availability of $108.4 million under the Credit Agreement.
We had outstanding bank guarantees and letters of credit under our credit arrangements of $30.9 million at March 31, 2026 and $32.7 million at December 31, 2025.
The following table represents fair value information of the 2030 Notes, classified as Level 1 using estimated quoted market prices.
Notes to Condensed Consolidated Financial Statements (Unaudited)
March 31, 2026
2030 Notes
March 31, 2026
December 31, 2025
(In millions)
Carrying amount
$
348.5
$
348.4
Fair value
$
357.8
$
360.8
The fair value of the revolving credit facility is equal to its carrying value, as the Company has the ability to repay the outstanding principal at par value at any time. The carrying values of cash and cash equivalents, accounts receivable and accounts payable approximate fair value due to the short-term nature of these instruments.
NOTE 8 — Stock-Based Compensation
A summary of restricted share activity for the three months ended March 31, 2026 is as follows:
2026
Time-Based
Number of Shares
Weighted Average Grant Date Fair Value
(In whole shares)
Outstanding - beginning of year
649,612
$
20.39
Granted
1,454
20.79
Vested
(6,013)
19.21
Canceled or expired
(584)
21.67
Outstanding - end of period
644,469
$
20.40
Stock-based compensation is included in Selling, general and administrative expenses in the Condensed Consolidated Statements of Income. Total stock-based compensation expense was $1.4 million and $1.5 million for the three months ended March 31, 2026 and 2025, respectively. As of March 31, 2026, there was $6.0 million of unrecognized compensation cost related to non-vested stock-based compensation, which is expected to be recognized over a weighted-average period of 1.7 years.
NOTE 9 — Commitments and Contingencies
The Company is subject to a variety of claims, suits, investigations and administrative proceedings with respect to commercial, premises liability, product liability, employment, personal injury and environmental matters arising from the ordinary course of business. The Company records a liability for loss contingencies in the consolidated financial statements when a loss is known or considered probable and the amount can be reasonably estimated. Our provisions are based on historical experience, current information and legal advice, and they may be adjusted in the future based on new developments. Estimating probable losses requires the analysis of multiple forecasted factors that often depend on judgments and potential actions by third parties. Although it is not possible to predict with certainty the ultimate outcome or cost of these matters, the Company believes they will not have a material adverse effect on our consolidated financial statements.
Our subsidiaries are involved in a number of contractual and warranty-related disputes. We believe that appropriate liabilities for these contingencies have been recorded; 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 118 cases asserting claims on behalf of 162 plaintiffs alleging personal injury as a result of exposure to asbestos. In every asbestos case in which
Notes to Condensed Consolidated Financial Statements (Unaudited)
March 31, 2026
we are named as a party, the complaints are filed against multiple named defendants. Historically, we have been dismissed from asbestos cases. We intend to vigorously defend these cases and believe we will continue to be successful in being dismissed from such cases.
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 10 — Pension and Postretirement Benefits
The components of pension and other postretirement benefits income, net recognized for the three months ended March 31, 2026 and 2025 were as follows:
Pension Benefits
Postretirement Benefits
Three Months Ended March 31,
Three Months Ended March 31,
2026
2025
2026
2025
(In millions)
Service costs
$
1.3
$
1.0
$
—
$
—
Interest costs
0.9
0.9
—
—
Expected return on plan assets
(3.1)
(2.8)
—
—
Recognized net actuarial loss
0.1
0.1
—
—
Net periodic benefit income
$
(0.8)
$
(0.8)
$
—
$
—
NOTE 11 — Accumulated Other Comprehensive Loss
The components of and changes in accumulated other comprehensive loss for three months ended March 31, 2026 and 2025 were as follows:
Cumulative Translation Adjustment
Pension and Postretirement Benefits
Total
Cumulative Translation Adjustment
Pension and Postretirement Benefits
Total
(In millions)
Three Months Ended March 31, 2026
Three Months Ended March 31, 2025
Beginning balance
$
(20.3)
$
(1.7)
$
(22.0)
$
(46.4)
$
(5.4)
$
(51.8)
Currency translation(a)
(8.0)
—
(8.0)
10.2
—
10.2
Pension and OPEB activity, net of tax
—
(1.2)
(1.2)
—
0.2
0.2
Ending balance
$
(28.3)
$
(2.9)
$
(31.2)
$
(36.2)
$
(5.2)
$
(41.4)
(a)No income taxes were provided on currency translation as foreign earnings are considered permanently reinvested.
NOTE 12 — Weighted-Average Number of Shares Used in Computing Earnings Per Share
The following table sets forth the weighted-average number of shares used in the computation of earnings per share:
Notes to Condensed Consolidated Financial Statements (Unaudited)
March 31, 2026
Three Months Ended March 31,
2026
2025
(In millions)
Weighted-average basic shares outstanding
13.8
13.6
Plus: Dilutive impact of employee stock awards
0.3
0.3
Weighted-average diluted shares outstanding
14.1
13.9
Anti-dilutive restricted stock awards, if any, are excluded from the computation of diluted earnings per share. Anti-dilutive shares were 0.0 million for both the three months ended March 31, 2026 and 2025.
NOTE 13 — Subsequent Events
On April 17, 2026, the Company's Board of Directors declared a quarterly dividend of $0.125 per common share. The dividend will be paid on May 15, 2026 to shareholders of record as of the close of business on May 1, 2026 and will result in a cash outlay of approximately $1.8 million.
Management’s Discussion and Analysis of Financial Condition and Results of Operations
Our condensed consolidated financial statements include the accounts of Park-Ohio Holdings Corp. and its subsidiaries (collectively, “we,” “our,” or the “Company”). All significant intercompany transactions have been eliminated in consolidation.
EXECUTIVE OVERVIEW
We are a diversified international company providing world-class customers with a supply chain management outsourcing service, capital equipment used on their production lines, and manufactured components used to assemble their products. We operate through three reportable segments: Supply Technologies, Assembly Components and Engineered Products.
Supply Technologies provides our customers with Total Supply Management™, a proactive solutions approach that manages the efficiencies of every aspect of supplying production parts and materials to our customers’ manufacturing floor, from strategic planning to program implementation. Total Supply Management™ includes such services as engineering and design support, part usage and cost analysis, supplier selection, quality assurance, bar coding, product packaging and tracking, just-in-time and point-of-use delivery, electronic billing services and ongoing technical support. Our Supply Technologies business services customers in the following principal industries: heavy-duty truck; power sports and recreational equipment; aerospace and defense; semiconductor equipment; electrical distribution and controls; consumer electronics; bus and coaches; automotive; agricultural and industrial equipment; HVAC; lawn and garden; plumbing; and medical devices.
Assembly Components manufactures products oriented towards fuel efficiency and reduced emission standards. Assembly Components designs, develops and manufactures aluminum products and 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; flexible multi-layer plastic and rubber assemblies used to transport fuel from the vehicle's gas tank and then, at extreme high pressure, to the engine's fuel injector nozzles. Our product offerings include gasoline direct injection systems and fuel filler assemblies, and industrial hose and injected molded rubber and plastic components. Our products are primarily used in the following industries: including automotive and light-vehicle; agricultural equipment; construction equipment; heavy-duty truck; and bus.
Engineered Products operates a diverse group of niche manufacturing businesses that design and manufacture a broad range of highly-engineered products, including induction heating and melting systems, pipe threading systems, inverters and forged and machined products. Engineered Products also produces and provides services and spare parts for the equipment it manufactures. The principal customers of Engineered Products are OEMs, sub-assemblers and end users in the following industries: ferrous and non-ferrous metals; coatings; forging; foundry; heavy-duty truck; construction equipment; automotive; oil and gas; rail; aerospace and defense; and power generation.
Sales and operating income for these three segments are provided in Note 4 to the condensed consolidated financial statements, included elsewhere herein.
As part of its ongoing portfolio optimization strategy, the Company is engaging in a formal review of strategic alternatives for its Southwest Steel Processing (“SSP”) business, including a potential sale or other transaction. SSP is part of our Forged and Machined Products group within the Engineered Products segment. This review reflects our continued focus on aligning capital and resources toward higher-growth, higher-margin opportunities across our portfolio. The Company has not set a deadline or definitive timetable for the completion of the strategic alternatives review process, and there can be no assurance that this review process will result in any transaction or particular outcome.
Three Months Ended March 31, 2026 Compared with Three Months Ended March 31, 2025
Three Months Ended March 31,
2026
2025
$ Change
% Change
(Dollars in millions, except per share data)
Net sales
$
421.0
$
405.4
$
15.6
3.8
%
Cost of sales
348.3
337.3
11.0
3.3
%
Selling, general and administrative (“SG&A”) expenses
51.7
48.2
3.5
7.3
%
SG&A expenses as a percentage of net sales
12.3
%
11.9
%
Restructuring and other special charges
1.3
1.0
0.3
30.0
%
Operating income
19.7
18.9
0.8
4.2
%
Other components of pension and other postretirement benefits income, net
2.1
1.8
0.3
16.7
%
Interest expense, net
(12.3)
(11.0)
(1.3)
11.8
%
Income from continuing operations before income taxes
9.5
9.7
(0.2)
(2.1)
%
Income tax expense
(1.6)
(1.9)
0.3
(15.8)
%
Income from continuing operations
7.9
7.8
0.1
1.3
%
Loss attributable to noncontrolling interests
0.3
0.7
(0.4)
(57.1)
%
Income from continuing operations attributable to Park-Ohio Holdings Corp. common shareholders
$
8.2
$
8.5
$
(0.3)
(3.5)
%
Earnings from continuing operations per common share attributable to Park-Ohio Holdings Corp. common shareholders:
Basic:
Continuing operations
$
0.59
$
0.63
$
(0.04)
(6.3)
%
Diluted:
Continuing operations
$
0.58
$
0.61
$
(0.03)
(4.9)
%
Net Sales
Net sales increased 3.8% to $421.0 million in the first three months of 2026 compared to $405.4 million in the same period in 2025. This increase was primarily due to higher customer demand in each of our business segments.
The factors explaining the changes in segment net sales for the three months ended March 31, 2026 compared to the corresponding 2025 period are contained in the “Segment Results” section below.
Cost of Sales and Gross Margin
Cost of sales increased to $348.3 million in the first three months of 2026 compared to $337.3 million in the same period in 2025, driven by the increase in net sales described above. Gross margin was 17.3% in the 2026 period compared to 16.8% in the corresponding 2025 period. The year-over-year gross margin increase was driven by the increase in net sales described above and ongoing profit-enhancement activities throughout the company.
SG&A expenses were $51.7 million in the first three months of 2026, compared to $48.2 million in the same period in 2025. As a percentage of net sales, SG&A expenses were 12.3% in the first three months of 2026 compared to 11.9% in the comparable period in 2025. The increases were driven by ongoing inflation and higher employee costs.
Restructuring and Other Special Charges
During the first three months of 2026, the Company recorded $1.3 million in connection with restructuring and other special charges, which included $0.4 million in our Assembly Components segment, $0.5 million in our Engineered Products segment and $0.4 million at Corporate.
During the first three months of 2025, the Company recorded $1.0 million in connection with restructuring and other special charges, primarily in our Engineered Products segment.
Other Components of Pension and OPEB Income, Net
Other components of pension and OPEBincome, net was $2.1 million in the first three months of 2026 compared to $1.8 million in the corresponding period in 2025. This increase was due to higher return on plan assets in 2026 compared to 2025.
Interest Expense, Net
Interest expense, net was $12.3 million in the first three months of 2026 compared to $11.0 million in the 2025 period. The increase was due primarily to the higher rate of 8.500% on our 2030 Notes compared to the 6.625% Senior Notes due 2027 (the “2027 Notes”) and higher average outstanding debt balances in the 2026 period compared to the same period a year ago, partially offset by lower rates on our revolving credit facility.
Income Tax Expense
In the three months ended March 31, 2026, income tax expense was $1.6 million on pre-tax income from continuing operations of $9.5 million, representing an effective income tax rate of 17%. In the three months ended March 31, 2025, income tax expense was $1.9 million on pre-tax income of $9.7 million, representing an effective income tax rate of 20%. The rate for the three months ended March 31, 2026 is lower than the statutory rate and the corresponding 2025 rate due primarily to increased federal research and development tax credit benefit.
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 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; other components of pension and other postretirement benefits income, net; and interest expense, net.
Supply Technologies Segment
Three Months Ended March 31,
2026
2025
(Dollars in millions)
Net sales
$
195.1
$
187.8
Segment operating income
$
17.5
$
17.8
Segment operating income margin
9.0
%
9.5
%
Net sales increased 3.9% in the three months ended March 31, 2026 compared to the 2025 period driven by higher demand in the power sports, semiconductor, aerospace and defense, electrical and agriculture end markets, as well as higher tariffs in the 2026 first quarter compared to last year’s quarter.
Segment operating income was steady year-over-year, finishing at $17.5 million in the three months ended March, 31 2026 compared to $17.8 million in the 2025 period. Segment operating income margin was 50 basis points lower in the 2026 period compared to the same period a year ago due primarily to higher tariffs in the 2026 period, which impacted gross margins.
Assembly Components Segment
Three Months Ended March 31,
2026
2025
(Dollars in millions)
Net sales
$
100.2
$
96.9
Segment operating income
$
4.9
$
5.3
Segment operating income margin
4.9
%
5.5
%
Net sales increased 3.4% in the three months ended March 31, 2026 compared to the 2025 period, due primarily to increased unit volumes on new business launched throughout 2025.
The decrease in operating income and margin in the 2026 period was due to higher restructuring and other special charges, which increased by $0.2 million in the 2026 period compared to the 2025 period. Excluding these charges, operating income was steady year-over-year.
Net sales increased 4.1% in the 2026 period compared to the 2025 period. The increase was driven by higher customer demand in the defense, steel production, mining, power generation and electrification-related end markets.
Segment operating income in the 2026 period increased by $1.9 million compared to the corresponding 2025 period, and operating margins in the 2026 first quarter were up 140 basis points compared to the corresponding 2025 quarter, driven by the higher sales and operational improvement in both our capital equipment and forged and machined products groups.
Liquidity and Capital Resources
The following table summarizes the major components of cash flow:
Three Months Ended March 31,
2026
2025
$ Change
Net cash (used in) provided by:
(In millions)
Operating activities
$
(7.8)
$
(10.0)
$
2.2
Investing activities
(12.5)
(9.5)
(3.0)
Financing activities
22.5
20.3
2.2
Discontinued operations
(0.1)
(0.2)
0.1
Effect of exchange rate changes on cash
(0.2)
0.8
(1.0)
Increase in cash and cash equivalents
$
1.9
$
1.4
$
0.5
Operating Activities
In the three months ended March 31, 2026, we utilized cash of $7.8 million compared to $10.0 million in the same period of 2025. Cash flow from operating activities improved in 2026 due to lower working capital needs.
Investing Activities
Capital expenditures of $12.5 million and $9.5 million in the three months ended March 31, 2026 and 2025, respectively, were primarily to provide increased capacity and automation for future growth, to maintain existing operations and for information system implementations.
Financing Activities
During the three months ended March 31, 2026, we had net debt borrowings of $24.3 million to fund capital expenditures and working capital needs. In addition, the Company made cash dividend payments to shareholders totaling $1.8 million.
During the three months ended March 31, 2025, we had net debt borrowings of $22.1 million to fund capital expenditures and working capital needs. In addition, the Company made cash dividend payments to shareholders totaling $1.8 million.
We do not have off-balance sheet arrangements, financing or other relationships with unconsolidated entities or other persons, other than the letters of credits disclosed in Note 8 to the condensed consolidated financial statements, included elsewhere herein.
Liquidity
Our liquidity needs are primarily for working capital, capital expenditures, dividends and acquisitions. Our primary sources of liquidity have been funds provided by operations, funds available from existing bank credit arrangements and the sale of our debt securities. Our existing financial resources (working capital, available bank borrowing arrangements and our at-the-market program) and anticipated cash flow from operations are expected to be adequate to meet anticipated cash requirements for at least the next twelve months and the foreseeable future thereafter, including but not limited to our ability to maintain current operations and fund capital expenditure requirements, service our debt, pursue acquisitions, pay dividends and repurchase common shares. For more information about our at the market program and other sales of common stock, see Note 13, “Weighted-Average Number of Shares Used in Computing Earnings Per Share,” to the condensed consolidated financial statements, included elsewhere herein.
As of March 31, 2026, we had total liquidity of $199.0 million, which included $46.7 million of cash and cash equivalents and $152.3 million of unused borrowing availability under our credit agreements, which includes $8.8 million of suppressed availability.
The Company had cash and cash equivalents held by foreign subsidiaries of $36.6 million at March 31, 2026 and $34.1 million at December 31, 2025. We do not expect restrictions on repatriation of cash held outside the U.S. to have a material effect on our overall liquidity, financial condition or results of operations for the foreseeable future.
The Company has two components to its assertion regarding reinvestment of foreign earnings outside of the United States. First, for all foreign subsidiaries except RB&W Corporation of Canada (“RB&W”), all earnings are permanently reinvested outside of the United States. Second, for RB&W, dividend distributions may be made, but only to the extent of current earnings in excess of cash required to fund its business operations; all accumulated earnings are permanently reinvested.
Senior Notes
In July 2025, Park-Ohio completed the sale, in a private offering, of $350.0 million aggregate principal amount of the 2030 Notes bearing interest 8.500%. The net proceeds from the offering of the 2030 Notes, along with cash on hand, were used to redeem in full the 2027 Notes and pay related fees and expenses. Interest on the Notes is payable semi-annually in arrears on January 31 and July 31 of each year.
Credit Agreement
In July 2025, Park-Ohio amended its Seventh Amended and Restated Credit Agreement (the “Credit Agreement”), in order to, among other things, (a) extend the maturity date to the fifth anniversary from the closing of the revolving credit facility amendment, (b) permit the issuance of the 2030 Notes and (c) permit the 2030 Notes to be secured by (i) a first-priority lien on the substantially all of the U.S. equipment (including machinery) of the Park-Ohio and the Park-Ohio’s existing and future domestic subsidiaries (the “Guarantors”) that guarantee debt under the Credit Agreement (the “Notes Priority Collateral”) and (ii) a second-priority lien (junior to the Credit Agreement) on substantially all of the U.S. assets of Park-Ohio and the Guarantors (including the 65% pledge of the foreign equity owned by the Guarantors), other than assets constituting Notes Priority Collateral, securing the revolving credit facility (the “ABL Priority Collateral”). The Credit Agreement provides for a revolving credit facility in the amount of $405.0 million, including a $40.0 million Canadian revolving subcommitment and a European revolving subcommitment in the amount of $30.0 million. Pursuant to the Credit Agreement, Park-Ohio has the option to increase the availability under the revolving credit facility.
Finance Leases
As of March 31, 2026, the Company had finance leases totaling $16.0 million.
The future availability of bank borrowings under the revolving credit facility provided by the Credit Agreement is based on (1) our calculated availability under the Credit Agreement and (2) if such calculated availability decreases below $50.625 million, our ability to meet a debt service ratio covenant. If our calculated availability is less than $50.625 million, our debt service coverage ratio must be greater than 1.0. At March 31, 2026, our calculated availability under the Credit Agreement was $108.4 million; therefore, the debt service ratio covenant did not apply.
Failure to maintain calculated availability of at least $50.625 million and meet the debt service ratio covenant could materially impact the availability and interest rate of future borrowings. Our debt service coverage ratio could be materially impacted by negative economic trends. To make certain permitted payments as defined under the Credit Agreement, including but not limited to acquisitions and dividends, we must meet defined availability thresholds ranging from $37.5 million to $50.625 million, and a defined debt service coverage ratio of 1.15.
As our calculated availability under the Credit Agreement was above $50.625 million, we were also in compliance with the other covenants contained in the revolving credit facility as of March 31, 2026. While we expect to remain in compliance throughout 2026, declines in sales volumes in the future, including due to the current macroeconomic conditions, could adversely impact our ability to remain in compliance with certain of these financial covenants. Additionally, to the extent our customers are adversely affected by declines in the economy in general, they may be unable to pay their accounts payable to us on a timely basis or at all, which could make our accounts receivable ineligible for purposes of the revolving credit facility and could reduce our borrowing base and our ability to borrow under such facility.
Dividends
The Company declared and paid dividends to shareholders of $1.8 million during the three months ended March 31, 2026. On April 17, 2026, the Company's Board of Directors declared a quarterly dividend of $0.125 per common share. The dividend will be paid on May 14, 2026 to shareholders of record as of the close of business on May 1, 2026 and will result in a cash outlay of approximately $1.8 million. Although we currently intend to pay a quarterly dividend on an ongoing basis, all future dividend declarations will be at the discretion of our Board of Directors and dependent upon then-existing conditions, including our operating results and financial condition, capital requirements, contractual restrictions, business prospects and other factors that our Board of Directors may deem relevant.
Seasonality; Variability of Operating Results
The timing of orders placed by our customers has varied with, among other factors, orders for customers’ finished goods, customer production schedules, competitive conditions and general economic conditions. The variability of the level and timing of orders has, from time to time, resulted in significant periodic and quarterly fluctuations in the operations of our businesses. Such variability is particularly evident in our capital equipment business, included in the Engineered Products segment, which typically ships large systems at a relatively lower pace than our other businesses.
Critical Accounting Policies
Our critical accounting policies are described in "Item. 7 Management’s Discussion and Analysis of Financial Condition and Results of Operations," and in the notes to our consolidated financial statements for the year ended December 31, 2025, both contained in our Annual Report on Form 10-K for the year ended December 31, 2025. There were no new critical accounting policies or updates to existing critical accounting policies as a result of new accounting pronouncements in this Quarterly Report on Form 10-Q.
The application of our critical accounting policies may require management to make judgments and estimates about the amounts reflected in the condensed consolidated financial statements. Management uses historical experience and all available information to make these estimates and judgments, and different amounts could be reported using different assumptions and estimates.
This Quarterly Report on Form 10-Q contains certain statements that are “forward-looking statements” within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act. The words “believes”, “anticipates”, “plans”, “expects”, “intends”, “estimates” and similar expressions are intended to identify forward-looking statements.
These forward-looking statements, including statements regarding future performance of the Company, that are subject to known and unknown risks, uncertainties and other factors that may cause our actual results, performance and achievements, or industry results, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. These factors that could cause actual results to differ materially from expectations include, but are not limited to, the following: the outcome of our strategic review of the SSP business; the impact supply chain and logistic issues have on our business, results of operations, financial position and liquidity; our substantial indebtedness; the uncertainty of the global economic environment; general business conditions and competitive factors, including pricing pressures and product innovation; demand for our products and services; the impact of labor disturbances affecting our customers; raw material availability and pricing; fluctuations in energy costs; component part availability and pricing; changes in our relationships with customers and suppliers; the financial condition of our customers, including the impact of any bankruptcies; our ability to successfully integrate recent and future acquisitions into existing operations; the amounts and timing, if any, of purchases of our common stock; changes in general economic conditions such as inflation rates, interest rates, tax rates, unemployment rates, higher labor and healthcare costs, recessions and changing government policies, laws and regulations, including those related to the current global uncertainties and crises, such as tariffs and surcharges; adverse impacts to us, our suppliers and customers from acts of terrorism or hostilities, or geopolitical unrest; public health issues, including the outbreak of infectious diseases and any impact on our facilities and operations and our customers and suppliers; our ability to meet various covenants, including financial covenants, contained in the agreements governing our indebtedness; disruptions, uncertainties or volatility in the credit markets that may limit our access to capital; potential disruption due to a partial or complete reconfiguration of the European Union; increasingly stringent domestic and foreign governmental regulations, including those affecting the environment or import and export controls and other trade barriers; inherent uncertainties involved in assessing our potential liability for environmental remediation-related activities; the outcome of pending and future litigation and other claims and disputes with customers; our dependence on the automotive and heavy-duty truck industries, which are highly cyclical; the dependence of the automotive industry on consumer spending; our ability to negotiate contracts with labor unions; our dependence on key management; our dependence on information systems; our ability to continue to pay cash dividends, and the timing and amount of any such dividends; and the other factors we describe under “Item 1A. Risk Factors” included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025. Any forward-looking statement speaks only as of the date on which such statement is made, and we undertake no obligation to update any forward-looking statement, whether as a result of new information, future events or otherwise, except as required by law. In light of these and other uncertainties, the inclusion of a forward-looking statement herein should not be regarded as a representation by us that our plans and objectives will be achieved.
Item 3.
Quantitative and Qualitative Disclosure About Market Risk
We are exposed to market risk, including changes in interest rates. As of March 31, 2026, we are subject to interest rate risk on borrowings under the floating rate revolving credit facility provided by our Credit Agreement. A 100-basis-point increase in the interest rate would have resulted in an increase in interest expense on these borrowings of approximately $0.7 million during the three-month period ended March 31, 2026.
Our foreign subsidiaries generally conduct business in local currencies. We face translation risks related to the changes in foreign currency exchange rates. Amounts invested in our foreign operations are translated in U.S. dollars at the exchange rates in effect at the balance sheet date. The resulting translation adjustments are recorded as a component of Accumulated other comprehensive loss in the Shareholders' Equity section of the accompanying Condensed Consolidated Balance Sheets. Sales and expenses at our foreign operations are translated into U.S. dollars at the applicable monthly average exchange rates. Therefore, changes in exchange rates may either positively or negatively affect our net sales and expenses from foreign operations as expressed in U.S. dollars.
Our largest exposures to commodity prices relate to metal and rubber compounds, which have fluctuated widely in recent years. In 2026 and 2025, we entered into agreements to hedge foreign currency. These agreements did not have a material impact on the results of the Company. We have no other commodity swap agreements or forward purchase contracts.
Item 4.
Controls and Procedures
Evaluation of disclosure controls and procedures.
Under the supervision of and with the participation of our management, including our chief executive officer and chief financial officer, we evaluated the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15(d)-15(e) under the Exchange Act) as of the end of the period covered by this Quarterly Report. Based on that evaluation, our chief executive officer and chief financial officer have concluded that, as of the end of the period covered by this Quarterly Report, our disclosure controls and procedures were effective.
Changes in internal control over financial reporting.
During the quarter ended March 31, 2026, there were no changes in our internal control over financial reporting that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
We are involved in a variety of claims, suits, investigations and administrative proceedings with respect to commercial, premises liability, product liability, employment, personal injury and environmental matters arising from the ordinary course of business. While any such claims, suits, investigations and proceedings involve an element of uncertainty, in the opinion of management, liabilities, if any, arising from currently pending or threatened litigation are not expected to have a material adverse effect on our financial condition, liquidity or results of operations.
In addition to the routine lawsuits and asserted claims noted above, we were a party to the lawsuits and legal proceedings described below as of March 31, 2026:
We were a co-defendant in 118 cases asserting claims on behalf of 162 plaintiffs alleging personal injury as a result of exposure to asbestos. These asbestos cases generally relate to production and sale of asbestos-containing products and allege various theories of liability, including negligence, gross negligence and strict liability, and seek compensatory and, in some cases, punitive damages.
In every asbestos case in which we are named as a party, the complaints are filed against multiple named defendants. In substantially all of the asbestos cases, the plaintiffs either claim damages in excess of a specified amount, typically a minimum amount sufficient to establish jurisdiction of the court in which the case was filed (jurisdictional minimums generally range from $25,000 to $75,000), or do not specify the monetary damages sought. To the extent that any specific amount of damages is sought, the amount applies to claims against all named defendants.
Historically, we have been dismissed from asbestos cases on the basis that the plaintiff incorrectly sued one of our subsidiaries or because the plaintiff failed to identify any asbestos-containing product manufactured or sold by us or our subsidiaries. We intend to vigorously defend these asbestos cases, and believe we will continue to be successful in being dismissed from such cases. However, 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. 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: (a) our historical success in being dismissed from these types of lawsuits on the bases mentioned above; (b) many cases have been improperly filed against one of our subsidiaries; (c) in many cases the plaintiffs have been unable to establish any causal relationship to us or our products or premises; (d) in many cases, the plaintiffs have been unable to demonstrate that they have suffered any identifiable injury or compensable loss at all or that any injuries that they have incurred did in fact result from alleged exposure to asbestos; and (e) the complaints assert claims against multiple defendants and, in most cases, the damages alleged are not attributed to individual defendants. Additionally, we do not believe that the amounts claimed in any of the asbestos cases are meaningful indicators of our potential exposure because the amounts claimed typically bear no relation to the extent of the plaintiff's injury, if any.
Our cost of defending these lawsuits has not been material to date and, based upon available information, our management does not expect its future costs for asbestos-related lawsuits to have a material adverse effect on our results of operations, liquidity or financial position.
Item 1A.
Risk Factors
There have been no material changes in the risk factors previously disclosed in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025. Investors should not interpret the disclosure of any risk factor to imply that the risk has not already materialized.
Unregistered Sales of Equity Securities and Use of Proceeds
The table below summarizes the information regarding our repurchases of the Company's common stock during the quarter ended March 31, 2026.
Period
Total Number of Shares Purchased
Average Price Paid Per Share
Total Number of Shares Purchased as Part of Publicly Announced Plans (1)
Maximum Number of Shares That May Yet Be Purchased Under the Plans or Program (1)
January 1 — January 31, 2026
750
(2)
$
20.79
—
443,207
February 1 — February 28, 2026
462
(2)
$
25.02
—
443,207
March 1 — March 31, 2026
231
(2)
25.48
—
443,207
Total
1,443
$
22.90
—
443,207
(1)On March 11, 2020, we announced a share repurchase program whereby we may repurchase up to 1.0 million shares of our outstanding common stock.
(2)Consists of an aggregate total of 1,443 shares of common stock we acquired from recipients of restricted stock awards at the time of vesting of such awards in order to settle recipient withholding tax liabilities.
During the quarter ended March 31, 2026, no director or officer (as defined in Rule 16a-1(f) promulgated under the Exchange Act) of the Company adopted or terminated a “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement” (as each term is defined in Item 408 of Regulation S-K).
On May 5, 2026, the Compensation Committee of the Board of Directors of the Company adopted the 2026 Supplemental Executive Retirement Plan of Park-Ohio Industries, Inc., which is an unfunded deferred compensation plan for key employees (the “Supplemental Plan”). Participants in the account balance feature of the Company’s qualified pension plan (the “Pension Plan”), including the Company’s named executive officers, may be credited with unfunded supplemental retirement benefits under the Supplemental Plan based on the portion of their annual compensation above the annual compensation limit set by the IRS (the “IRS Limit”). The Supplemental Plan is designed to restore benefits for participants who are restricted due to the IRS Limit applicable to the Pension Plan and, beginning in 2026, any eligible pay earned by participants in excess of the IRS Limit will generate pay credits, at the same rate applicable to the Pension Plan, to their balance in the Supplemental Plan (“Pay Credits”). Participants become vested in the Supplemental Plan benefits after five years of service with the Company, which are credited from their start date. In addition, participants will be credited with an initial amount in their Supplemental Plan account balances, reflecting, among other things, years of prior service and the amount of prior retirement benefits excluded because of the IRS Limit (“Restoration Credit”). The Restoration Credits for the Company’s named executive officers are as follows: Matthew V. Crawford, Chairman, Chief Executive Officer and President - $275,000; Patrick W. Fogarty, Vice President and Chief Financial Officer - $370,000; and Robert D. Vilsack, Chief Legal and Administrative Officer, Corporate Secretary - $370,000.
These Supplemental Plan benefits are expected to have an immaterial impact on the Company’s financial position and results of operations. The foregoing description of the Supplemental Plan is qualified in its entirety by reference to the full text of such plan and the related amendment to the Pension Plan, which are filed as Exhibits 10.1 and 10.2, respectively, to this Quarterly Report on Form 10-Q, and which are incorporated herein by reference thereto.
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
PARK-OHIO HOLDINGS CORP.
(Registrant)
By:
/s/ Patrick W. Fogarty
Name:
Patrick W. Fogarty
Title:
Vice President and Chief Financial Officer (Principal Financial and Accounting Officer)