Park-Ohio Q2 Earnings Call Highlights

Record quarterly performance: Second-quarter revenue rose 10% year over year to $440 million, while adjusted diluted EPS increased 24% to $0.93. Gross margin, operating income and operating cash flow also improved. 2026 outlook raised: Park-Ohio now expects full-year sales of $1.70 billion to $1.73 billion and adjusted diluted EPS of $3.10 to $3.30, while maintaining free cash flow guidance of $20 million to $30 million. Broad segment strength: Supply Technologies and Engineered Products posted record sales, with Engineered Products operating income up 50% and backlog up 23% from year-end. The company is also reviewing strategic alternatives for Southwest Steel, including a potential sale, with a decision expected near the end of 2026. Park-Ohio NASDAQ: PKOH reported record second-quarter revenue of $440 million and raised its full-year 2026 outlook, citing broad demand across industrial markets and continued operational improvement. Chairman, President and CEO Matthew Crawford said the company’s performance reflected progress in its effort to focus on organic growth in durable products and services. He said Park-Ohio is investing in productivity tools, data management, facility optimization, automation and infrastructure improvements, particularly within its Engineered Products segment. “We’re pleased to report a solid second quarter performance, which included a number of record or near-record financial performance metrics,” Crawford said. He added that industrial demand appeared to be broadening beyond electrical infrastructure, data centers, aerospace and defense. Total second-quarter sales rose 10% year over year to a record $440 million, compared with $400 million in the prior-year period. Revenue also increased 5% sequentially. Vice President and CFO Pat Fogarty said sales increased both year over year and sequentially in each of the company’s three segments. Gross margin increased 90 basis points from the prior-year quarter to 17.9%, while operating income increased 22% year over year. Fogarty attributed the improvement to margin flow-through from higher sales and profit-enhancement initiatives across multiple businesses. GAAP diluted earnings per share rose 30% to $0.87. Adjusted diluted EPS increased 24% to $0.93, from $0.75 a year earlier. Second-quarter cash flow from operations was $9 million, an improvement of $23 million from the year-ago period. The company said the improvement reflected higher income and efforts to reduce working capital. Capital expenditures totaled $11 million and included information-system investments, plant-floor automation and growth capital. Park-Ohio ended the quarter with approximately $189 million of liquidity, including $48 million of cash and $141 million of unused borrowing capacity. The company expects full-year capital spending of approximately $35 million to $40 million. Based on record first-half sales, demand in Supply Technologies, Engineered Products backlogs and operational improvements, Park-Ohio raised several elements of its 2026 guidance: Net sales of $1.70 billion to $1.73 billion. Adjusted diluted EPS of $3.10 to $3.30. EBITDA as defined of 8.5% to 9%. Free cash flow guidance maintained at $20 million to $30 million. Fogarty said the company expects its full-year effective income tax rate to range from 17% to 20%. Its second-quarter effective tax rate was about 17%, with the favorable year-to-date rate driven by estimated federal research-and-development tax credit benefits. Supply Technologies reported record quarterly sales of $209 million, up 12% from $187 million a year earlier. Segment operating income rose.