Park-Ohio (PKOH) Small-Cap Virtual Conference summary

Strategic transformation and business positioning

• Completed a major business reshaping, focusing on capital allocation and operating leverage, aiming for growth after a period of flat performance.

• Sold the aluminum products business to reduce capital intensity and focus on technology and centers of excellence.

• Consolidated nearly a million square feet of manufacturing space to unlock margins and improve operating leverage.

• Restructured leadership and maintained a highly decentralized structure, empowering business unit leaders.

• Family ownership remains significant, supporting stewardship and talent attraction.

Financial performance and targets

• Market cap is approximately $310 million, with 14.3 million shares outstanding and a 33% insider ownership.

• 2023 sales guidance is $1.62–$1.65 billion, with EPS of $2.90–$3.20 and free cash flow of $20–$30 million.

• Trailing 12-month revenue is $1.61 billion, adjusted EBITDA is $145 million, and a $0.50 dividend yields 2.3%.

• Long-term goals include reaching $2 billion in revenue, 10% EBITDA margin, and net leverage below 3x.

• Focus is on deleveraging and improving earnings quality and cash flow conversion.

Business segments and operational highlights

• Operates through three segments: Supply Technologies (50% of business), Assembly Components (24%), and Engineered Products (29%).

• Over 80% of business is sole-sourced, with a highly diversified customer base and no single customer over 7% of sales.

• Supply Technologies segment shows margin improvement and high EBITDA-to-cash flow conversion.

• Assembly Components segment landed $50 million in new business; margins are expected to improve with facility consolidation.

• Engineered Products group is recovering from underperformance, with strong backlogs and a focus on margin growth.