Park-Ohio Holdings Corp.

Good morning and welcome to the PARCC Ohio first quarter 2026 results conference call. At this time all participants are in a listen only mode. After the presentation the company will conduct a question and answer session. Today's conference is also being recorded. If you have any objections you may disconnect at this time. Before we get started I want to remind everyone that certain statements made on today's call may be forward-looking statements. as defined in the Private Securities Litigation Reform Act of 1995. These forward-looking statements are subject to risk and uncertainties that may cause actual results to differ materially from those projected. A list of the relevant risk and uncertainties may be found in the earnings press release, as well as the company's 2025 10-K, which was filed on March 5, 2026 with the SEC. Additionally, the company may discuss adjusted EPS adjusted operating income, and EBITDA as defined. These metrics are not measures of performance under generally accepted accounting principles for a reconciliation of EPS, adjusted EPS, operating income to adjusted operating income, and net income attributable to Park Ohio common shareholders to EBITDA as defined. Please refer to the company's recent earnings release. I will now turn the conference over to Mr. Matthew Crawford. Chairman, President, and CEO. Please proceed, Mr. Crawford.

Thank you, and thank you all for joining our first quarter earnings conference call. I'm pleased with the momentum which is building across our business. Not only are we observing growth in many of our end markets, both traditional and new, this strength comes in products and services, which are our most durable and innovative offerings. We've worked hard to transform all aspects of our business over the last several years by carefully allocating capital towards our goals of faster growth, higher sustainable margins, and more consistent cash flow. Our progress is beginning to connect to the results. We will continue to invest in people, products, and processes where we can accelerate these changes. We are just at the beginning of seeing these improvements. Regarding our strategic review of Southwest Steel Processing, we will respect the long-term contributions of our partners and associates who have created incredible value over the last 25 years. This fully automated forging site is one of the finest of its type anywhere, and we will find a way to optimize the hard work and investment of the SSP Park Ohio team while improving the overall results of Park Ohio. Thank you to all of our associates for their contributions to the start of 2026, and I look forward to answering questions after Pat reviews the quarter. Thanks, Pat.

Thank you, Matt, and good morning. Overall, our first quarter results exceeded our expectations and are highlighted by sales growth across all three of our business segments on a year-over-year basis and sequentially. Sales in the quarter totaled $421 million compared to $405 million a year ago, an increase of 4%. Sales growth in supply technologies was driven by increased customer demand in several key end markets. In our assembly component segment, sales growth of 3% was driven by new program launches throughout last year and increased year-over-year demand from various automotive platforms in each of our product lines. In engineered products, sales growth was 4% year-over-year, driven by strong capital equipment demand from several end markets in North America and Europe and continued strong aftermarket demand. Our consolidated gross margin was 17.3% in the quarter, up 50 basis points compared to a year ago, driven by flow-through from the higher sales levels and profit enhancement initiatives implemented in several business units. Excluding restructuring and other special charges of approximately $1 million in both periods, consolidated operating income was $21 million, up 6% versus last year. Sequentially adjusted operating income increased 4% compared to the fourth quarter. SG&A expenses were approximately $52 million or 12.3% of sales compared to 11.9% of sales a year ago. The percent to sales increase was driven primarily by general inflation and increases in personnel costs. First quarter interest costs were $1.3 million higher than a year ago due primarily to the higher interest rate on our senior notes that we refinanced in the third quarter of last year. The increase was partially offset by lower interest rates on our revolving credit facility compared to a year ago. Our effective income tax rate improved to 17% in the quarter compared to 20% a year ago, driven by higher estimated federal research and development tax credits. We expect our full year effective income tax to range between 17% and 20%. Gap earnings per share from continued operations for the quarter was 58 cents per diluted share and on an adjusted basis was 65 cents per share, both exceeding our internal expectations due to higher levels of segment operating income. During the quarter, cash flow from operations was a use of $8 million to fund working capital, primarily to support sales growth during the current year. Capital spending totaled $12.5 million, which included investments in information systems, automation equipment to help drive higher levels of profitability and improve plant floor efficiencies and growth capital. We expect our full year CapEx to be approximately $35 million. Our liquidity continues to be strong and total approximately $200 million at the end of the quarter, which consisted of approximately $47 million of cash on hand and $153 million of unused power and capacity under our various banking arrangements. Turning now to our segment results in supply technologies, net sales total $195 million during the quarter compared to $180 million in the first quarter of last year, an increase of 4%. Higher sales were driven by strong customer demand in power sports, semiconductor, aerospace, and defense, electrical, and agricultural end markets. Our supply chain business continues to benefit from the increased demand from the semiconductor, technology, and data center sectors, which in total increased 13% year-over-year. In addition, aerospace and defense demand in the first quarter continued to be strong and increased 15% year-over-year. We expect continued growth in these end markets throughout the year in addition to improve demand from certain industrial end markets, such as heavy duty truck and consumer end markets, as they recover from historically low levels in the prior year. During the quarter, the construction of our new state-of-the-art North American distribution center remained on track and is expected to be operational in the third quarter of this year. We believe this state-of-the-art distribution center, once fully operational, will result in a highly efficient service center with automated sorting, kitting, and packaging, and provide additional value-added services to our customers. Our fastener manufacturing business performed well in the quarter. Net sales grew 18% sequentially and were slightly down compared to sales in the prior year quarter. Global customer demand for our proprietary products is expected to grow, resulting from the expanded use of lightweight materials and global production of EV and hybrid vehicles. Adjusted operating margins continued to be at historically strong levels and were 9% during the quarter, slightly down compared to last year, primarily due to product sales mix and higher personnel costs. In our assembly component segment, sales for the quarter totaled $100 million compared to $97 million a year ago, an increase of 3%, driven by new product sales launched last year in each product line and higher customer demand from various automotive platforms. Adjusted operating income in the quarter totaled $5.3 million compared to $5.5 million a year ago, and compared to the fourth quarter of last year, sales increased approximately 10%, and adjusted operating income increased 23%. We continue to focus on improving operating margins in this segment, Several initiatives such as increasing our rubber mixing production to support sales growth of our molded and extruded products and plant floor automation investments are expected to improve segment operating margins. In our engineered product segment, sales of $126 million reached their highest quarterly level in recent years and were up 4% compared to last year and up 8% sequentially compared to last quarter. The increase in sales was driven by our industrial equipment group, which continues to maintain strong backlogs. Higher sales of new equipment in North America and Europe and strong customer demand for aftermarket parts and services resulted in a very strong quarter for our industrial equipment business. The increased capital equipment sales in the quarter were driven by strong customer demand in the defense, steel production, data center, oil and gas, and industrial cooling end markets. New equipment bookings were strong in the quarter and totaled approximately $62 million in the quarter compared to a quarterly average bookings of $54 million last year, an increase of 15%. Backlogs as of March 31 totaled $196 million compared to $180 million last quarter, an increase of 9%. During the quarter, our adjusted operating income in this segment improved 35% compared to a year ago to $6.2 million and $3.6 million from the fourth quarter of last year. This segment is experiencing strong demand from the aerospace and defense, power generation, steel production, and data center sectors. Key products supporting these high growth end markets include transformers, power generators, induction heating and forging-related equipment, and pipe bending equipment. For example, our industrial equipment, which includes induction hardening and melting and forging-related equipment, is used to support a broad range of defense-related activities, including the production of munition shells, armored plate, and the hardening of high-strength defense materials. And finally, within this business segment, we commenced to form a review of strategic alternatives for our Southwest Steel processing business, which is included in our Forged Machine Products Group. We have engaged an investment banking firm to assist us with our review, which may result in an ultimate sale of this business. With respect to our first quarter results, adjusted earnings from continuing operations excluding Southwest Steel would have increased from $0.65 per diluted share to $0.77 per diluted share. Turning now to our full year guidance, we are reaffirming our outlook provided last quarter, including net sales of 1.675 to 1.710 billion, an increase of 5% to 7% over last year. Adjusted EPS of $2.90 to $3.20 per diluted share, an increase of 7% to 19% over last year. EBITDA is defined of 8% to 9% of net sales. and free cash flow of $20 to $30 million. This outlook includes the impact of Southwest Steel, which is expected to generate $17 million in revenue and a net loss of 53 cents per diluted share. The outcome of the strategic review process with respect to this business represents potential upside to our current guidance. Now I'll turn the call back over to Matt.