UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q

(Mark One)


☑			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended ~~September 30, 2021~~March 31, 2022


☐			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

Table of Contents

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 ~~October 29, 2021: 12,600,091~~April 30, 2022: 12,578,951 shares.

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Park-Ohio Holdings Corp. and Subsidiaries

Index

Table of Contents

Part I. Financial Information

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Item 1.			Financial Statements

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Park-Ohio Holdings Corp. and Subsidiaries

Condensed Consolidated Balance Sheets


		(Unaudited)					(Unaudited)
		September 30, 2021		December 31, 2020			March 31, 2022		December 31, 2021
		(In millions)					(In millions)
ASSETS	ASSETS					ASSETS
Current assets:	Current assets:					Current assets:
Cash and cash equivalents	Cash and cash equivalents	$	59.6	$	55.0	Cash and cash equivalents	$	61.6	$	54.1

Accounts receivable, net	Accounts receivable, net	253.7		248.1		Accounts receivable, net	299.5		255.3
Inventories, net	Inventories, net	386.4		310.9		Inventories, net	401.5		382.9

Prepaid and other current assets	Prepaid and other current assets	78.8		92.4		Prepaid and other current assets	86.3		83.2
Total current assets	Total current assets	778.5		706.4		Total current assets	848.9		775.5
Property, plant and equipment, net	Property, plant and equipment, net	232.4		236.6		Property, plant and equipment, net	228.2		229.1
Operating lease right-of-use assets	Operating lease right-of-use assets	66.9		68.6		Operating lease right-of-use assets	64.1		63.4
Goodwill	Goodwill	112.0		110.9		Goodwill	105.2		106.0
Intangible assets, net	Intangible assets, net	83.0		86.8		Intangible assets, net	79.6		81.7

Other long-term assets	Other long-term assets	97.1		91.2		Other long-term assets	105.3		104.3
Total assets	Total assets	$	1,369.9	$	1,300.5	Total assets	$	1,431.3	$	1,360.0
LIABILITIES AND SHAREHOLDERS' EQUITY	LIABILITIES AND SHAREHOLDERS' EQUITY					LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:	Current liabilities:					Current liabilities:
Trade accounts payable	Trade accounts payable	$	185.6	$	166.7	Trade accounts payable	$	226.9	$	194.0
Current portion of long-term debt and short-term debt	Current portion of long-term debt and short-term debt	8.9		11.6		Current portion of long-term debt and short-term debt	9.9		10.7
Current portion of operating lease liabilities	Current portion of operating lease liabilities	13.3		12.9		Current portion of operating lease liabilities	12.8		12.8
Accrued expenses and other	Accrued expenses and other	122.1		115.9		Accrued expenses and other	139.5		131.5
Total current liabilities	Total current liabilities	329.9		307.1		Total current liabilities	389.1		349.0
Long-term liabilities, less current portion:	Long-term liabilities, less current portion:					Long-term liabilities, less current portion:
Long-term debt	Long-term debt	592.1		517.8		Long-term debt	619.2		591.5
Long-term operating lease liabilities	Long-term operating lease liabilities	54.2		56.7		Long-term operating lease liabilities	51.4		50.7

Other long-term liabilities	Other long-term liabilities	56.0		61.0		Other long-term liabilities	43.7		44.0
Total long-term liabilities	Total long-term liabilities	702.3		635.5		Total long-term liabilities	714.3		686.2

Park-Ohio Holdings Corp. and Subsidiaries shareholders' equity	Park-Ohio Holdings Corp. and Subsidiaries shareholders' equity	325.6		344.2		Park-Ohio Holdings Corp. and Subsidiaries shareholders' equity	317.0		314.1
Noncontrolling interests	Noncontrolling interests	12.1		13.7		Noncontrolling interests	10.9		10.7
Total equity	Total equity	337.7		357.9		Total equity	327.9		324.8
Total liabilities and shareholders' equity	Total liabilities and shareholders' equity	$	1,369.9	$	1,300.5	Total liabilities and shareholders' equity	$	1,431.3	$	1,360.0

Refer to the accompanying notes to these unaudited condensed consolidated financial statements.

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Park-Ohio Holdings Corp. and Subsidiaries

Condensed Consolidated Statements of Operations (Unaudited)


		Three Months Ended September 30,				Nine Months Ended September 30,					Three Months Ended March 31,
		2021		2020		2021		2020				2022		2021
		(In millions, except per share data)										(In millions, except per share data)
Net sales	Net sales	$	358.5	$	340.2	$	1,068.1	$	934.8	Net sales		$	418.4	$	359.6
Cost of sales	Cost of sales	318.4		290.5		936.1		817.0		Cost of sales		364.7		307.6
Gross profit	Gross profit	40.1		49.7		132.0		117.8		Gross profit		53.7		52.0
Selling, general and administrative expenses	Selling, general and administrative expenses	45.1		38.7		128.1		114.7		Selling, general and administrative expenses		45.8		39.7

Operating (loss) income		(5.0)		11.0		3.9		3.1
Operating income										Operating income		7.9		12.3
Other components of pension income and other postretirement benefits expense, net	Other components of pension income and other postretirement benefits expense, net	2.4		1.9		7.3		5.5		Other components of pension income and other postretirement benefits expense, net		2.8		2.4
Interest expense, net	Interest expense, net	(7.6)		(7.4)		(22.4)		(22.9)		Interest expense, net		(7.8)		(7.4)

(Loss) income before income taxes		(10.2)		5.5		(11.2)		(14.3)
Income before income taxes										Income before income taxes		2.9		7.3
Income tax benefit (expense)	Income tax benefit (expense)	2.8		(0.3)		3.7		3.8		Income tax benefit (expense)		3.4		(1.9)
Net (loss) income		(7.4)		5.2		(7.5)		(10.5)
Net loss attributable to noncontrolling interests		0.2		0.1		0.5		0.4
Net (loss) income attributable to Park-Ohio Holdings Corp. common shareholders		$	(7.2)	$	5.3	$	(7.0)	$	(10.1)
Net income										Net income		6.3		5.4
Net (income) loss attributable to noncontrolling interests										Net (income) loss attributable to noncontrolling interests		(0.2)		0.1
Net income attributable to Park-Ohio Holdings Corp. common shareholders										Net income attributable to Park-Ohio Holdings Corp. common shareholders		$	6.1	$	5.5

(Loss) income per common share attributable to Park-Ohio Holdings Corp. common shareholders:
Income per common share attributable to Park-Ohio Holdings Corp. common shareholders:										Income per common share attributable to Park-Ohio Holdings Corp. common shareholders:
Basic	Basic	$	(0.60)	$	0.44	$	(0.58)	$	(0.83)	Basic		$	0.51	$	0.46
Diluted	Diluted	$	(0.60)	$	0.44	$	(0.58)	$	(0.83)	Diluted		$	0.50	$	0.45
Weighted-average shares used to compute (loss) income per share:
Weighted-average shares used to compute income per share:										Weighted-average shares used to compute income per share:
Basic	Basic	12.1		12.0		12.0		12.1		Basic		12.0		12.0
Diluted	Diluted	12.1		12.0		12.0		12.1		Diluted		12.2		12.3

Refer to the accompanying notes to these unaudited condensed consolidated financial statements.

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Park-Ohio Holdings Corp. and Subsidiaries

Condensed Consolidated Statements of Comprehensive Income ~~(Loss)~~ (Unaudited)

Three Months Ended September 30, Nine Months Ended September 30,
2021 2020 2021 2020
(In millions)
Net (loss) income $ (7.4) $ 5.2 $ (7.5) $ (10.5)
Other comprehensive (loss) income, net of tax:
Currency translation (5.5) 12.6 (8.2) (1.1)
Pension and other postretirement benefits 0.2 0.3 0.6 1.2
Total other comprehensive (loss) income (5.3) 12.9 (7.6) 0.1
Total comprehensive (loss) income, net of tax (12.7) 18.1 (15.1) (10.4)
Comprehensive loss attributable to noncontrolling interests 0.2 0.1 0.5 0.4
Comprehensive (loss) income attributable to Park-Ohio Holdings Corp. common shareholders $ (12.5) $ 18.2 $ (14.6) $ (10.0)


	Three Months Ended March 31,
		2022		2021
		(In millions)
Net income		$	6.3	$	5.4
Other comprehensive (loss) income, net of tax:
Currency translation		(3.9)		(4.3)

Foreign currency forward contracts		0.7		—
Pension and other postretirement benefits		0.1		0.2
Total other comprehensive loss		(3.1)		(4.1)
Total comprehensive income, net of tax		3.2		1.3
Comprehensive (income) loss attributable to noncontrolling interests		(0.2)		0.1
Comprehensive income attributable to Park-Ohio Holdings Corp. common shareholders		$	3.0	$	1.4

Refer to the accompanying notes to these unaudited condensed consolidated financial statements.

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Park-Ohio Holdings Corp. and Subsidiaries

Condensed Consolidated Statements of Shareholders' Equity (Unaudited)


		Common Stock																Common Stock
		Shares	Amount		Additional Paid-In Capital		Retained Earnings		Treasury Stock		Accumulated Other Comprehensive (Loss) Income		Noncontrolling Interests		Total			Shares	Amount		Additional Paid-In Capital		Retained Earnings		Treasury Stock		Accumulated Other Comprehensive Loss		Noncontrolling Interests		Total
		(In whole shares)	(In millions)															(In whole shares)	(In millions)
Balance at January 1, 2021		16,148,791	$	16.1	$	135.5	$	290.5	$	(79.8)	$	(18.1)	$	13.7	$	357.9
Balance at January 1, 2022																	Balance at January 1, 2022	16,339,722	$	16.3	$	142.9	$	259.4	$	(85.3)	$	(19.2)	$	10.7	$	324.8
Other comprehensive income (loss)	Other comprehensive income (loss)	—	—		—		5.5		—		(4.1)		(0.1)		1.3		Other comprehensive income (loss)	—	—		—		6.1		—		(3.1)		0.2		3.2
Stock-based compensation expense	Stock-based compensation expense	—	—		1.6		—		—		—		—		1.6		Stock-based compensation expense	—	—		1.6		—		—		—		—		1.6
Stock-based compensation activity	Stock-based compensation activity	(6,667)	—		—		—		—		—		—		—		Stock-based compensation activity	(5,502)	—		—		—		—		—		—		—
Dividends	Dividends	—	—		—		(1.6)		—		—		—		(1.6)		Dividends	—	—		—		(1.6)		—		—		—		(1.6)

Increase in Park-Ohio ownership interest		—	—		1.1		—		—		—		(1.1)		—
Payments of withholding taxes on share awards	Payments of withholding taxes on share awards	—	—		—		—		(0.1)		—		—		(0.1)		Payments of withholding taxes on share awards	—	—		—		—		(0.1)		—		—		(0.1)

Balance at March 31, 2021		16,142,124	16.1		138.2		294.4		(79.9)		(22.2)		12.5		359.1
Other comprehensive (loss) income		—	—		—		(5.3)		—		1.8		(0.2)		(3.7)
Stock-based compensation expense		—	—		1.4		—		—		—		—		1.4
Stock-based compensation activity		174,746	0.2		(0.2)		—		—		—		—		—
Balance at March 31, 2022																	Balance at March 31, 2022	16,334,220	$	16.3	$	144.5	$	263.9	$	(85.4)	$	(22.3)	$	10.9	$	327.9

Dividends		—	—		—		(1.5)		—		—		—		(1.5)
Payments of withholding taxes on share awards		—	—		—		—		(2.1)		—		—		(2.1)
Balance at June 30, 2021		16,316,870	16.3		139.4		287.6		(82.0)		(20.4)		12.3		353.2
Other comprehensive (loss) income		—	—		—		(7.2)		—		(5.3)		(0.2)		(12.7)
Stock-based compensation expense		—	—		1.7		—		—		—		—		1.7
Stock-based compensation activity		2,500	—		—		—		—		—		—		—
Dividends		—	—		—		(1.6)		—		—		—		(1.6)
Purchases of treasury stock (99,661 shares)		—	—		—		—		(2.5)		—		—		(2.5)
Payments of withholding taxes on share awards		—	—		—		—		(0.4)		—		—		(0.4)
Balance at September 30, 2020		16,319,370	$	16.3	$	141.1	$	278.8	$	(84.9)	$	(25.7)	$	12.1	$	337.7


	Common Stock
	Shares	Amount		Additional Paid-In Capital		Retained Earnings		Treasury Stock		Accumulated Other Comprehensive Loss		Noncontrolling Interests		Total
	(In whole shares)	(In millions)
Balance at January 1, 2021	16,148,791	$	16.1	$	135.5	$	290.5	$	(79.8)	$	(18.1)	$	13.7	$	357.9
Other comprehensive income (loss)	—	—		—		5.5		—		(4.1)		(0.1)		1.3
Stock-based compensation expense	—	—		1.6		—		—		—		—		1.6
Stock-based compensation activity	(6,667)	—		—		—		—		—		—		—
Dividends	—	—		—		(1.6)		—		—		—		(1.6)

Increase in Park-Ohio ownership interest	—	—		1.1		—		—		—		(1.1)		—
Payments of withholding taxes on share awards	—	—		—		—		(0.1)		—		—		(0.1)

Balance at March 31, 2021	16,142,124	$	16.1	$	138.2	$	294.4	$	(79.9)	$	(22.2)	$	12.5	$	359.1


	Three Months Ended March 31,
		2022		2021
Dividends per common share		$	0.125	$	0.125

Refer to the accompanying notes to these unaudited condensed consolidated financial statements.

Table of Contents

Common Stock
Shares Amount Additional
Paid-In
Capital Retained
Earnings Treasury Stock Accumulated
Other
Comprehensive Loss Noncontrolling Interests Total
(In whole shares) (In millions)
Balance at January 1, 2020 15,706,398 $ 15.7 $ 129.8 $ 298.2 $ (71.1) $ (37.0) $ 14.0 $ 349.6
Other comprehensive
income (loss) — — — 1.2 — (16.1) 0.1 (14.8)
Stock-based compensation expense — — 1.4 — — — — 1.4
Stock-based compensation activity 1,000 — — — — — — —
Dividends — — — (1.6) — — — (1.6)
Purchases of treasury stock (180,827 shares) — — — — (2.9) — — (2.9)
Payments of withholding taxes on share awards
— — — — (0.1) — — (0.1)
Balance at March 31, 2020 15,707,398 15.7 131.2 297.8 (74.1) (53.1) 14.1 331.6
Other comprehensive (loss) income — — — (16.6) — 3.3 (0.4) (13.7)
Stock-based compensation expense — — 1.3 — — — — 1.3
Stock-based compensation activity 283,993 0.3 (0.3) — — — — —
Purchases of treasury stock (149,376 shares) — — — — (2.4) — — (2.4)
Payments of withholding taxes on share awards
— — — — (0.6) — — (0.6)
Balance at June 30, 2020 15,991,391 16.0 132.2 281.2 (77.1) (49.8) 13.7 316.2
Other comprehensive income (loss) — — — 5.3 — 12.9 (0.1) 18.1
Stock-based compensation expense — — 1.6 — — — — 1.6
Stock-based compensation activity 157,400 0.2 (0.2) — — — — —
Purchases of treasury stock (119,831 shares) — — — — (1.9) — — (1.9)
Balance at September 30, 2020 16,148,791 $ 16.2 $ 133.6 $ 286.5 $ (79.0) $ (36.9) $ 13.6 $ 334.0
Park-Ohio Holdings Corp. and Subsidiaries

Condensed Consolidated Statements of Cash Flows (Unaudited)


	Three Months Ended March 31,
	2022		2021
	(In millions)
OPERATING ACTIVITIES
Net income	$	6.3	$	5.4
Adjustments to reconcile net income to net cash (used) provided by operating activities:
Depreciation and amortization	9.7		9.4

Stock-based compensation expense	1.6		1.6






Changes in operating assets and liabilities:
Accounts receivable	(45.0)		(1.4)
Inventories	(19.3)		(22.9)
Prepaid and other current assets	(3.5)		2.2
Accounts payable and accrued expenses	41.9		17.1


Other	(1.8)		(1.5)
Net cash (used) provided by operating activities	(10.1)		9.9
INVESTING ACTIVITIES
Purchases of property, plant and equipment	(7.1)		(6.6)



Net cash used by investing activities	(7.1)		(6.6)
FINANCING ACTIVITIES
Proceeds from revolving credit facility, net	29.2		5.7

Payments on other debt	(0.7)		(2.8)
Proceeds from other debt	—		1.8
Payments on finance lease facilities, net	(1.6)		(1.5)




Dividends	(1.6)		(1.6)

Payments of withholding taxes on share awards	(0.1)		(0.1)


Net cash provided by financing activities	25.2		1.5
Effect of exchange rate changes on cash	(0.5)		(0.9)
Increase in cash and cash equivalents	7.5		3.9
Cash and cash equivalents at beginning of period	54.1		55.0
Cash and cash equivalents at end of period	$	61.6	$	58.9
Interest paid	$	1.7	$	1.1
Income taxes paid	$	1.4	$	1.8

Three Months Ended September 30, Nine Months Ended September 30,
2021 2020 2021 2020
Dividends per common share $ 0.125 $ — $ 0.375 $ 0.125

Refer to the accompanying notes to these unaudited condensed consolidated financial statements.

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Park-Ohio Holdings Corp. and Subsidiaries

~~Condensed Consolidated Statements of Cash Flows (Unaudited)~~

Nine Months Ended September 30,
2021 2020
(In millions)
OPERATING ACTIVITIES
Net loss $ (7.5) $ (10.5)
Adjustments to reconcile net loss to net cash (used) provided by operating activities:
Depreciation and amortization 28.9 26.9
Stock-based compensation expense 4.7 4.4
Changes in operating assets and liabilities:
Accounts receivable (6.6) 9.6
Inventories (74.7) 20.8
Prepaid and other current assets 11.5 0.6
Accounts payable and accrued expenses 24.7 (18.2)
Other (6.9) (0.8)
Net cash (used) provided by operating activities (25.9) 32.8
INVESTING ACTIVITIES
Purchases of property, plant and equipment (24.9) (14.9)
Business acquisition, net of cash acquired (5.4) —
Proceeds from sale of an asset — 1.4
Net cash used by investing activities (30.3) (13.5)
FINANCING ACTIVITIES
Proceeds (payments) from revolving credit facility, net 78.4 (7.7)
Payments on other debt (5.4) (8.1)
Proceeds from other debt 2.3 3.8
Payments on finance lease facilities, net (3.5) (2.6)
Dividends (4.7) (1.6)
Purchases of treasury shares (2.5) (7.2)
Payments of withholding taxes on share awards (2.6) (0.7)
Net cash provided (used) by financing activities 62.0 (24.1)
Effect of exchange rate changes on cash (1.2) (0.3)
Increase (decrease) in cash and cash equivalents 4.6 (5.1)
Cash and cash equivalents at beginning of period 55.0 56.0
Cash and cash equivalents at end of period $ 59.6 $ 50.9
Interest paid $ 15.6 $ 15.7
Income taxes (received) paid, net $ (4.6) $ 2.0

~~Refer to the accompanying notes to these unaudited condensed consolidated financial statements.~~

~~Table of Contents~~

~~Park-Ohio Holdings Corp. and Subsidiaries~~

Notes to Unaudited Condensed Consolidated Financial Statements

~~September 30, 2021~~March 31, 2022

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- ~~and nine-~~ month ~~periods~~period ended ~~September 30, 2021~~March 31, 2022 are not necessarily indicative of the results that may be expected for the year ending December 31, ~~2021.~~2022. The balance sheet at December 31, ~~2020~~2021 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, ~~2020.~~2021.

The preparation of financial statements in conformity with accounting principles generally accepted in the United States 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

Recent Accounting Pronouncements Not Yet Adopted

In March 2020, the FASB issued ASU 2020-04, “Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting,” which was issued in response to concerns about structural risks of interbank offered rates, and, particularly, the risk of cessation of the London Interbank Offered Rate. The guidance is effective upon issuance and may be adopted on any date on or after March 12, 2020. However, the relief is temporary and generally cannot be applied to contract modifications that occur after December 31, 2022 or hedging relationships entered into or evaluated after that date. ~~The Company~~This standard is ~~currently evaluating the~~not expected to have a material impact ~~of this standard.~~once adopted.

No other recently issued ASUs 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 customer, 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.

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Park-Ohio Holdings Corp. and Subsidiaries

Notes to Unaudited Condensed Consolidated Financial Statements

March 31, 2022


	Three Months Ended March 31,
		2022		2021
		(In millions)
PRODUCT LINE
Supply Technologies		$	146.2	$	136.5
Engineered specialty fasteners and other products		22.6		21.2
Supply Technologies Segment		168.8		157.7

Fuel, rubber and plastic products		98.3		82.4
Aluminum products		60.3		43.6
Assembly Components Segment		158.6		126.0

Industrial equipment		64.3		55.4
Forged and machined products		26.7		20.5
Engineered Products Segment		91.0		75.9

Total revenues		$	418.4	$	359.6


	Supply Technologies Segment		Assembly Components Segment		Engineered Products Segment		Total Revenues
	(In millions)
Three Months Ended March 31, 2022
GEOGRAPHIC REGION
United States	$	101.6	$	98.2	$	52.2	$	252.0
Europe	31.9		4.3		16.1		52.3
Asia	14.9		5.2		12.7		32.8
Mexico	16.2		28.8		4.1		49.1
Canada	3.0		21.6		4.6		29.2
Other	1.2		0.5		1.3		3.0
Total	$	168.8	$	158.6	$	91.0	$	418.4

Three Months Ended March 31, 2021
GEOGRAPHIC REGION
United States	$	97.1	$	87.6	$	38.1	$	222.8
Europe	28.9		3.8		13.4		46.1
Asia	11.1		6.8		13.2		31.1
Mexico	16.7		10.7		3.9		31.3
Canada	2.9		16.6		3.7		23.2
Other	1.0		0.5		3.6		5.1
Total	$	157.7	$	126.0	$	75.9	$	359.6

Table of Contents

Park-Ohio Holdings Corp. and Subsidiaries

Notes to Unaudited Condensed Consolidated Financial Statements

~~September 30, 2021~~March 31, 2022

Three Months Ended September 30, Nine Months Ended September 30,
2021 2020 2021 2020
(In millions)
PRODUCT LINE
Supply Technologies $ 134.5 $ 112.1 $ 406.2 $ 320.1
Engineered specialty fasteners and other products 19.5 19.9 60.5 47.1
Supply Technologies Segment 154.0 132.0 466.7 367.2
Fuel, rubber and plastic products 80.8 86.8 238.2 211.3
Aluminum products 39.4 40.1 117.5 98.7
Assembly Components Segment 120.2 126.9 355.7 310.0
Industrial equipment 62.0 56.2 179.9 175.7
Forged and machined products 22.3 25.1 65.8 81.9
Engineered Products Segment 84.3 81.3 245.7 257.6
Total revenues $ 358.5 $ 340.2 $ 1,068.1 $ 934.8

Supply Technologies Segment Assembly Components Segment Engineered Products Segment Total Revenues
(In millions)
Three Months Ended September 30, 2021
GEOGRAPHIC REGION
United States $ 92.5 $ 77.9 $ 46.4 $ 216.8
Europe 27.9 3.4 14.8 46.1
Asia 14.7 6.6 12.0 33.3
Mexico 15.6 17.8 5.0 38.4
Canada 2.9 14.1 3.5 20.5
Other 0.4 0.4 2.6 3.4
Total $ 154.0 $ 120.2 $ 84.3 $ 358.5
Three Months Ended September 30, 2020
GEOGRAPHIC REGION
United States $ 77.0 $ 86.1 $ 43.0 $ 206.1
Europe 21.6 3.8 16.1 41.5
Asia 10.3 9.1 12.6 32.0
Mexico 20.5 10.0 2.0 32.5
Canada 2.5 17.4 6.0 25.9
Other 0.1 0.5 1.6 2.2
Total $ 132.0 $ 126.9 $ 81.3 $ 340.2

~~Table of Contents~~

~~Park-Ohio Holdings Corp. and Subsidiaries~~

~~Notes to Unaudited Condensed Consolidated Financial Statements~~

~~September 30, 2021~~

Supply Technologies Segment Assembly Components Segment Engineered Products Segment Total Revenues
(In millions)
Nine Months Ended September 30, 2021
GEOGRAPHIC REGION
United States $ 281.4 $ 241.8 $ 126.7 $ 649.9
Europe 84.7 10.7 46.3 141.7
Asia 42.4 19.0 38.5 99.9
Mexico 48.2 38.6 13.4 100.2
Canada 8.6 44.3 12.5 65.4
Other 1.4 1.3 8.3 11.0
Total $ 466.7 $ 355.7 $ 245.7 $ 1,068.1
Nine Months Ended September 30, 2020
GEOGRAPHIC REGION
United States $ 228.3 $ 212.9 $ 141.7 $ 582.9
Europe 59.3 10.2 42.4 111.9
Asia 31.5 19.8 46.1 97.4
Mexico 40.0 23.8 5.5 69.3
Canada 7.0 42.3 15.1 64.4
Other 1.1 1.0 6.8 8.9
Total $ 367.2 $ 310.0 $ 257.6 $ 934.8

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 ~~$38.6~~$56.6 million and ~~$37.4~~$51.7 million at ~~September 30, 2021~~March 31, 2022 and December 31, ~~2020,~~2021, respectively, are recorded in Accrued expenses and other in the Condensed Consolidated Balance Sheets.

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 ~~$50.0~~$56.6 million and ~~$56.9~~$55.0 million at ~~September 30, 2021~~March 31, 2022 and December 31, ~~2020,~~2021, respectively, are recorded in Prepaid and other current assets in the Condensed Consolidated Balance Sheets.

NOTE 4 — Segments

Our operating segments are defined as components of the enterprise for which separate financial information is available and evaluated on a regular basis by our chief operating decision maker to allocate resources and assess performance.

For purposes of measuring business segment performance, the Company 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 and share-based compensation and corporate office costs. Segment operating income reconciles to consolidated income before income taxes by deducting corporate costs; Other components of pension income and other postretirement benefits expense, net; and interest expense, net.

Results by business segment were as follows:


	Three Months Ended March 31,
		2022		2021
		(In millions)
Net sales:
Supply Technologies		$	168.8	$	157.7
Assembly Components		158.6		126.0
Engineered Products		91.0		75.9
		$	418.4	$	359.6
Segment operating income (loss):
Supply Technologies		$	12.0	$	12.2
Assembly Components		2.0		6.4
Engineered Products		1.8		(1.3)
Total segment operating income		15.8		17.3

Corporate costs		(7.9)		(5.0)




Operating income		7.9		12.3
Other components of pension income and other postretirement benefits expense, net		2.8		2.4
Interest expense, net		(7.8)		(7.4)

Income before income taxes		$	2.9	$	7.3

Table of Contents

Park-Ohio Holdings Corp. and Subsidiaries

Notes to Unaudited Condensed Consolidated Financial Statements

~~September 30, 2021~~March 31, 2022

Three Months Ended September 30, Nine Months Ended September 30,
2021 2020 2021 2020
(In millions)
Net sales:
Supply Technologies $ 154.0 $ 132.0 $ 466.7 $ 367.2
Assembly Components 120.2 126.9 355.7 310.0
Engineered Products 84.3 81.3 245.7 257.6
$ 358.5 $ 340.2 $ 1,068.1 $ 934.8
Segment operating income (loss):
Supply Technologies $ 10.7 $ 10.6 $ 33.2 $ 20.1
Assembly Components (8.9) 6.7 (8.6) (1.6)
Engineered Products 0.6 1.3 (1.3) 4.3
Total segment operating income 2.4 18.6 23.3 22.8
Corporate costs (7.4) (7.6) (19.4) (19.7)
Operating (loss) income (5.0) 11.0 3.9 3.1
Other components of pension income and other postretirement benefits expense, net
2.4 1.9 7.3 5.5
Interest expense, net (7.6) (7.4) (22.4) (22.9)
(Loss) income before income taxes $ (10.2) $ 5.5 $ (11.2) $ (14.3)

NOTE 5 — Plant Closure and Consolidation

In the three ~~and nine~~ months ended ~~September 30,~~March 31, 2022, the Company recorded expenses totaling $2.0 million in its Assembly Components segment in connection with its plant closure and consolidation activities. Expenses of $1.8 million were included in cost of sales and $0.2 million were included in selling, general and administrative expenses in the Condensed Consolidated Statements of Operations. The Company expects to incur additional restructuring costs of approximately $1.0 million in this segment in the remainder of 2022.

In the three months ended March 31, 2022, the Company recorded expenses totaling $0.6 million in its Engineered Products segment in connection with plant closure and consolidation activities. The expenses are included in selling, general and administrative expenses in the Condensed Consolidated Statements of Operations, which consisted of severance of $0.1 million and other restructuring activities of $0.5 million. The Company expects to incur additional costs of approximately $6.0 million related to the initiatives in this segment in the remainder of 2022.

In the three months ended March 31, 2021, the Company recorded expenses totaling ~~$1.8~~$0.6 million ~~and $3.1 million, respectively,~~ in its Assembly Components ~~segment. These charges were recorded~~segment in connection with actions taken to close and consolidate its extrusion operations in Tennessee and its fuel operations in Michigan, and to complete other cost-reduction actions in this segment. ~~In the three and nine months ended September 30, 2021, the~~The expenses, ~~included facility-related costs of $1.8 million and $2.8 million, respectively,~~ which were included in cost of sales in the Condensed Consolidated Statements of ~~Operations. For the nine months ended September 30, 2021, expenses also included~~Operations, were comprised of severance ~~costs~~ of ~~$0.3~~$0.2 million ~~which were included in selling, general and administrative expenses in the Condensed Consolidated Statements of Operations. The Company expects to incur additional moving~~ and other facility-related costs ~~related to these initiatives~~ of ~~approximately $1.9 million in the fourth quarter of 2021.~~$0.4 million.

In the three ~~and nine~~ months ended ~~September 30,~~March 31, 2021, the Company recorded expenses ~~related to plant closure and consolidation~~totaling $0.7 million in its Engineered Products segment ~~totaling $0.6 million~~in connection with plant closure and ~~$1.9 million, respectively, which~~consolidation activities. The expenses are included in selling, general and administrative expenses in the Condensed Consolidated Statements of ~~Operations. The Company expects to incur additional costs related to these initiatives~~Operations, were comprised of ~~approximately $1.6~~severance of $0.3 million ~~in the fourth quarter of 2021.~~

During the third quarter of 2021, in connection with the plant closure and consolidation activities in its Engineered Products segment, the Company committed to a plan to sell real estate at 2 operating locations. The Company determined that these assets met the criteria to be classified as held for sale during the third quarter and, therefore, the aggregate carrying value of approximately $4.9 million is included in assets held for sale and presented in Prepaid and other ~~current assets in the Condensed Consolidated Balance Sheet at September 30, 2021. The Company believes that the fair value less costs to sell~~restructuring activities of ~~these assets exceeds their respective carrying values.~~

~~Table of Contents~~

~~Park-Ohio Holdings Corp. and Subsidiaries~~

~~Notes to Unaudited Condensed Consolidated Financial Statements~~

~~September 30, 2021~~

~~NOTE 6 — Acquisition~~

On April 1, 2021, the Company acquired NYK Component Solutions Limited (“NYK”) for $5.4 million in cash, net of cash acquired, plus estimated contingent consideration of up to an additional $1.8 million. NYK, which is included in our Supply Technologies segment, is headquartered in Southampton, United Kingdom and is a leading distributor of circular connectors and accessories for use in aerospace, defense, and other industrial applications. NYK provides complementary products to our existing products in Supply Technologies.

The allocation of the purchase price of NYK is subject to finalization of the Company's determination of the fair values of the assets acquired and the liabilities assumed as of the acquisition date, and could be materially different than the estimates presented below. The Company has not yet completed its analysis of the fair value of the intangible assets or the contingent consideration. The final allocation is expected to be completed in the fourth quarter of 2021, but no later than one year after the acquisition date. Below is the estimated purchase price allocation related to the acquisition of NYK; the total purchase price is net of cash acquired and includes estimated contingent consideration of $1.8$0.4 million.


	~~(In millions)~~
~~Accounts receivable~~	$	~~1.0~~
~~Inventories~~	~~2.2~~
~~Accounts payable and accrued expenses~~	~~(1.0)~~
~~Property, plant and equipment~~	~~0.1~~
~~Other, net~~	~~0.1~~
~~Intangible assets~~	~~2.8~~
~~Goodwill~~	~~2.5~~
~~Deferred income tax liability~~	~~(0.5)~~
~~Total purchase price (including the estimated contingent consideration of $1.8 million)~~	$	~~7.2~~

NOTE 76 — Inventories

Inventories, net consist of the following:


		September 30, 2021		December 31, 2020			March 31, 2022		December 31, 2021
		(In millions)					(In millions)
Raw materials and supplies	Raw materials and supplies	$	120.0	$	93.8	Raw materials and supplies	$	118.8	$	114.2
Work-in-process	Work-in-process	50.1		44.0		Work-in-process	52.1		49.6
Finished goods	Finished goods	216.3		173.1		Finished goods	230.6		219.1

Inventories, net	Inventories, net	$	386.4	$	310.9	Inventories, net	$	401.5	$	382.9

1513

Table of Contents

Park-Ohio Holdings Corp. and Subsidiaries

Notes to Unaudited Condensed Consolidated Financial Statements

~~September 30, 2021~~March 31, 2022

NOTE 87 — Accrued Warranty Costs

The Company estimates warranty claims that may be incurred based on current and historical data of products sold. Actual warranty expense could differ from the estimates made by the Company based on product performance. The following table presents changes in the Company’s product warranty liability for the three ~~and nine~~ months ended ~~September 30, 2021~~March 31, 2022 and ~~2020:~~2021:


		Three Months Ended September 30,				Nine Months Ended September 30,					Three Months Ended March 31,
		2021		2020		2021		2020				2022		2021
		(In millions)										(In millions)
Beginning balance	Beginning balance	$	7.6	$	6.5	$	6.4	$	6.4	Beginning balance		$	7.2	$	6.4
Claims paid	Claims paid	(0.4)		(0.5)		(1.6)		(1.1)		Claims paid		(0.7)		(0.3)
Warranty expense	Warranty expense	0.1		0.3		2.5		1.0		Warranty expense		0.2		0.4
Ending balance	Ending balance	$	7.3	$	6.3	$	7.3	$	6.3	Ending balance		$	6.7	$	6.5

NOTE 98 — Income Taxes

The Company’s tax provision for interim periods is determined using an estimate of its annual effective rate, adjusted for discrete items, if any, in each period.

On March 27, 2020, the President of the United States signed the Coronavirus Aid, Relief, and Economic Security (“CARES”) Act, a substantial tax-and-spending package intended to provide additional economic stimulus to address the impact of the COVID-19 pandemic. Significant impacts of the CARES Act include the ability to carry back a net operating loss for five years and an increase of the Internal Revenue Code Section 163(j) interest expense disallowance limitations from 30% to 50% of adjusted taxable income, which will allow the Company to deduct additional interest expense for the 2019 and 2020 tax years. The Company is assessing the potential impact of global relief packages and the CARES Act.

~~Income tax benefit for~~In the three months ended ~~September 30,~~March 31, 2022, income tax benefit was $3.4 million on pre-tax income of $2.9 million. The benefit included a discrete tax benefit of $4.1 million related to a federal research and development credit. In the three months ended March 31, 2021, income tax expense was ~~$2.8~~$1.9 million, representing an effective income tax rate of ~~27%, compared to income tax expense of $0.3 million, or 5%, for the three months ended September 30, 2020. The~~26%. This rate ~~in the 2021 period~~ is higher than the U.S. statutory rate of 21% primarily due ~~primarily~~ to ~~the additional~~income subject to foreign tax benefit recorded as result of stock compensation that vested and state and local taxes during the quarter. The rate in the 2020 period is lower than the U.S. statutory rate of 21% due primarily to a U.S. net operating loss carryback to a prior year under the CARES Act, aat tax ~~benefit from the favorable impact of final Global Intangible Low-Taxed Income (“GILTI”) regulations and a decrease in our Transition Tax liability.~~

Income tax benefit for the nine months ended September 30, 2021 was $3.7 million, representing an effective rate of 33%, compared to $3.8 million, or 27%, for the nine months ended September 30, 2020. The rate in the 2021 period isrates higher than the U.S. statutory rate ~~of 21% due primarily to the additional benefit recorded as result of the net operating loss carryback claim under the CARES Act~~ and the composition of earnings. The rate in the 2020 period is higher than the U.S. statutory rate due to the impact of earnings in foreign jurisdictions with statutory income tax rates higher than the U.S. rate.state taxes.

NOTE 109 — Financing Arrangements

Debt consists of the following:


				Carrying Value at
	Maturity Date	Interest Rate at March 31, 2022		March 31, 2022		December 31, 2021
				(In millions)
Senior Notes	April 15, 2027	6.625	%	$	350.0	$	350.0

Revolving credit facility	November 26, 2024	1.43	%	250.1		221.1


Finance Leases	Various	Various		16.0		17.5
Other	Various	Various		16.6		17.5
Total debt				632.7		606.1
Less current portion of long-term debt and short-term debt				(9.9)		(10.7)

Less unamortized debt issuance costs				(3.6)		(3.9)
Total long-term debt, net				$	619.2	$	591.5

Park-Ohio's Seventh Amended and Restated Credit Agreement (the “Credit Agreement”) provides for a revolving credit facility in the amount of $375.0 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, the Company has the option to increase the availability under the revolving credit facility by an aggregate incremental amount up to $100.0 million. The Credit

Table of Contents

Park-Ohio Holdings Corp. and Subsidiaries

Notes to Unaudited Condensed Consolidated Financial Statements

~~September 30, 2021~~March 31, 2022

Carrying Value at
Maturity Date Interest Rate at
September 30, 2021 September 30, 2021 December 31, 2020
(In millions)
Senior Notes April 15, 2027 6.625 % $ 350.0 $ 350.0
Revolving credit facility November 26, 2024 1.30 % 221.8 143.7
Finance Leases Various Various 15.2 18.7
Other Various Various 18.2 22.3
Total debt 605.2 534.7
Less current portion of long-term debt and short-term debt (8.9) (11.6)
Less unamortized debt issuance costs (4.2) (5.3)
Total long-term debt, net $ 592.1 $ 517.8

~~In 2018, Park-Ohio Industries, Inc. (“Park-Ohio”), the operating subsidiary~~Agreement matures on November 26, 2024. As of ~~Park-Ohio Holdings Corp., entered into Amendment No. 1 to Seventh Amended and Restated Credit Agreement (the “Credit Agreement”) with a group~~March 31, 2022, we had borrowing availability of ~~banks to increase the availability~~$109.5 million under the ~~revolving~~ credit facility from $350.0 million to $375.0 million, the Canadian revolving subcommitment from $35.0 million to $40.0 million and the European revolving subcommitment from $25.0 million to $30.0 million. Furthermore, Park-Ohio has the option, pursuant to the Credit Agreement, to increase the availability under the revolving credit facility by an aggregate incremental amount up to $100.0 million. In 2019, Park-Ohio entered into Amendment No. 4 to the Credit Agreement, extending the maturity of the Credit Agreement to November 26, 2024.agreement.

We had outstanding bank guarantees and letters of credit under the Credit Agreement of approximately ~~$35.3~~$43.6 million at ~~September 30, 2021~~March 31, 2022 and ~~$34.9~~$39.7 million at December 31, ~~2020.~~2021.

In 2017, Park-Ohio completed the issuance, in a private placement, of $350.0 million aggregate principal amount of 6.625% Senior Notes due 2027 (the “Notes”). The Notes are unsecured senior obligations of Park-Ohio and are guaranteed on an unsecured senior basis by the 100% owned material domestic subsidiaries of Park-Ohio.

In 2016, the Company, through its subsidiary, IEGE Industrial Equipment Holding Company Limited, entered into a financing agreement with Banco Bilbao Vizcaya Argentaria, S.A. The financing agreement provides the Company a loan up to $28.9 million as of September 30, 2021, as well as a revolving credit facility for up to $11.6 million to fund working capital and general corporate needs. No amounts were outstanding under the loan agreement or the revolving credit facility as of September 30, 2021.

In 2015, the Company entered into a finance lease agreement (the “Lease Agreement”). The Lease Agreement provides the Company up to $50.0 million for finance leases. Finance lease obligations of ~~$15.2~~$16.0 million were borrowed under the Lease Agreement to acquire machinery and equipment as of ~~September 30, 2021.~~March 31, 2022.

In 2015, the Company, through its Southwest Steel Processing LLC subsidiary, entered into a financing agreement with the Arkansas Development Finance Authority which matures in September 2025. The financing agreement provides the Company the ability to borrow up to $11.0 million for expansion of its manufacturing facility in Arkansas. The Company had ~~$6.1~~$5.3 million of borrowings outstanding under this agreement as of ~~September 30, 2021,~~March 31, 2022, which is included in Other above.

The following table represents fair value information of the Notes, classified as Level 1 using estimated quoted market prices.

~~Table of Contents~~

~~Park-Ohio Holdings Corp. and Subsidiaries~~

~~Notes to Unaudited Condensed Consolidated Financial Statements~~

~~September 30, 2021~~


		September 30, 2021		December 31, 2020			March 31, 2022		December 31, 2021
		(In millions)					(In millions)
Carrying amount	Carrying amount	$	350.0	$	350.0	Carrying amount	$	350.0	$	350.0
Fair value	Fair value	$	351.3	$	361.8	Fair value	$	295.3	$	337.6

NOTE 1110 — Stock-Based Compensation

A summary of restricted share activity for the ~~nine~~three months ended ~~September 30, 2021~~March 31, 2022 is as follows:

2021
Time-Based Performance-Based
Number of Shares Weighted Average
Grant Date
Fair Value Number of Shares Weighted Average
Grant Date
Fair Value
(In whole shares) (In whole shares)
Outstanding - beginning of year 741,006 $ 22.02 50,000 $ 32.55
Granted(a)
183,401 33.64 — —
Vested (234,081) 22.47 — —
Canceled or expired (7,917) 21.71 — —
Outstanding - end of period 682,409 $ 24.99 50,000 $ 32.55

~~(a) - Included in this amount are 4,905 restricted share units.~~


	2022
	Time-Based			Performance-Based
	Number of Shares	Weighted Average Grant Date Fair Value		Number of Shares	Weighted Average Grant Date Fair Value
	(In whole shares)			(In whole shares)
Outstanding - beginning of year	655,093	$	24.62	50,000	$	32.55
Granted	—	—		—	—
Vested	(9,667)	33.07		—	—

Canceled or expired	(5,502)	27.24		—	—
Outstanding - end of period	639,924	$	24.47	50,000	$	32.55

Stock-based compensation is included in Selling, general and administrative expenses in the Condensed Consolidated Statements of Operations. Total stock-based compensation expense ~~for~~was $1.6 million in both the three months ended ~~September 30, 2021~~March 31, 2022 and ~~2020 was $1.7 million and $1.6 million, respectively. Total stock-based compensation expense for the nine months ended September 30, 2021 and 2020 was $4.7 million and $4.4 million, respectively.~~2021. As of ~~September 30, 2021,~~March 31, 2022, there was ~~$11.4~~$8.4 million of unrecognized compensation cost related to non-vested stock-based compensation, which cost is expected to be recognized over a weighted-average period of ~~2.0~~1.7 years.

Table of Contents

Park-Ohio Holdings Corp. and Subsidiaries

Notes to Unaudited Condensed Consolidated Financial Statements

March 31, 2022

NOTE 1211 — Commitments and Contingencies

The Company is subject to various pending and threatened legal proceedings arising in 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 ~~approximately 124~~99 cases asserting claims on behalf of ~~approximately 228~~161 plaintiffs alleging personal injury as a result of exposure to asbestos. In every asbestos case in which 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.

~~Table of Contents~~

~~Park-Ohio Holdings Corp. and Subsidiaries~~

~~Notes to Unaudited Condensed Consolidated Financial Statements~~

~~September 30, 2021~~

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 1312 — Pension and Postretirement Benefits

The components of net periodic benefit (income) expense costs recognized for the three ~~and nine~~ months ended ~~September 30,~~March 31, 2022 and 2021 ~~and 2020~~ were as follows:


		Pension Benefits								Postretirement Benefits										Pension Benefits					Postretirement Benefits
		Three Months Ended September 30,				Nine Months Ended September 30,				Three Months Ended September 30,				Nine Months Ended September 30,					Three Months Ended March 31,					Three Months Ended March 31,
		2021		2020		2021		2020		2021		2020		2021		2020				2022		2021			2022		2021
		(In millions)																		(In millions)
Service costs	Service costs	$	1.0	$	1.0	$	3.2	$	3.2	$	—	$	—	$	—	$	—	Service costs		$	1.1	$	1.1		$	—	$	—
Interest costs	Interest costs	0.3		0.5		1.0		1.6		—		—		0.1		0.1		Interest costs		0.4		0.3			—		—
Expected return on plan assets	Expected return on plan assets	(3.0)		(2.9)		(9.2)		(8.8)		—		—		—		—		Expected return on plan assets		(3.2)		(3.1)			(0.1)		—
Recognized net actuarial loss	Recognized net actuarial loss	0.2		0.4		0.6		1.4		0.1		0.1		0.3		0.2		Recognized net actuarial loss		—		0.2			0.1		0.1
Net periodic benefit (income) expense	Net periodic benefit (income) expense	$	(1.5)	$	(1.0)	$	(4.4)	$	(2.6)	$	0.1	$	0.1	$	0.4	$	0.3	Net periodic benefit (income) expense		$	(1.7)	$	(1.5)		$	—	$	0.1

NOTE 1413 — Accumulated Other Comprehensive ~~(Loss) Income~~Loss

The components of and changes in accumulated other comprehensive loss for the three ~~and nine~~ months ended ~~September 30,~~March 31, 2022 and 2021 ~~and 2020~~ were as follows:

Cumulative Translation Adjustment Pension and Postretirement Benefits Total Cumulative Translation Adjustment Pension and Postretirement Benefits Total
(In millions)
Three Months Ended September 30, 2021 Three Months Ended September 30, 2020
Beginning balance $ (11.0) $ (9.4) $ (20.4) $ (36.1) $ (13.7) $ (49.8)
Currency translation (a)
(5.5) — (5.5) 12.6 — 12.6
Pension and OPEB activity, net of tax — 0.2 0.2 — 0.3 0.3
Ending balance $ (16.5) $ (9.2) $ (25.7) $ (23.5) $ (13.4) $ (36.9)
Nine Months Ended September 30, 2021 Nine Months Ended September 30, 2020
Beginning balance $ (8.3) $ (9.8) $ (18.1) $ (22.4) $ (14.6) $ (37.0)
Currency translation (a)
(8.2) — (8.2) (1.1) — (1.1)
Pension and OPEB activity, net of tax — 0.6 0.6 — 1.2 1.2
Ending balance $ (16.5) $ (9.2) $ (25.7) $ (23.5) $ (13.4) $ (36.9)

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Park-Ohio Holdings Corp. and Subsidiaries

Notes to Unaudited Condensed Consolidated Financial Statements

March 31, 2022


	Cumulative Translation Adjustment		Cash Flow Hedges		Pension and Postretirement Benefits		Total		Cumulative Translation Adjustment		Cash Flow Hedges		Pension and Postretirement Benefits		Total
	(In millions)
	Three Months Ended March 31, 2022								Three Months Ended March 31, 2021
Beginning balance	$	(18.3)	$	—	$	(0.9)	$	(19.2)	$	(8.3)	$	—	$	(9.8)	$	(18.1)
Currency translation (a)	(3.9)		—		—		(3.9)		(4.3)		—		—		(4.3)

Foreign currency forward contracts	—		0.7		—		0.7		—		—		—		—
Pension and OPEB activity, net of tax	—		—		0.1		0.1		—		—		0.2		0.2


Ending balance	$	(22.2)	$	0.7	$	(0.8)	$	(22.3)	$	(12.6)	$	—	$	(9.6)	$	(22.2)

(a)No income taxes were provided on currency translation as foreign earnings are considered permanently reinvested.

NOTE 1514 — 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:

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~~Park-Ohio Holdings Corp. and Subsidiaries~~

~~Notes to Unaudited Condensed Consolidated Financial Statements~~

~~September 30, 2021~~


		Three Months Ended September 30,		Nine Months Ended September 30,			Three Months Ended March 31,
		2021	2020	2021	2020			2022	2021
		(In millions)						(In millions)
Weighted-average basic shares outstanding	Weighted-average basic shares outstanding	12.1	12.0	12.0	12.1	Weighted-average basic shares outstanding		12.0	12.0
Plus: Dilutive impact of employee stock awards	Plus: Dilutive impact of employee stock awards	—	—	—	—	Plus: Dilutive impact of employee stock awards		0.2	0.3
Weighted-average diluted shares outstanding	Weighted-average diluted shares outstanding	12.1	12.0	12.0	12.1	Weighted-average diluted shares outstanding		12.2	12.3

Certain restricted stock awards are anti-dilutive and therefore excluded from the computation of diluted earnings per share. Anti-dilutive shares were 0.2 million and ~~0.5~~0.0 million for the three months ended ~~September 30,~~March 31, 2022 and 2021, ~~and 2020, respectively. Anti-dilutive shares were 0.1 million and 0.3 million for the nine months ended September 30, 2021 and 2020,~~ respectively.

NOTE 15 — Subsequent Event

On April 22, 2022, the Company's Board of Directors declared a quarterly dividend of $0.125 per common share. The dividend will be paid on May 20, 2022 to shareholders of record as of the close of business on May 6, 2022 and will result in a cash outlay of approximately $1.6 million.

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Item 2.			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; sports and recreational equipment; aerospace and defense; semiconductor equipment; electrical distribution and controls; consumer electronics; bus and coaches; automotive, agricultural and construction equipment; HVAC; lawn and garden; plumbing; and medical.

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. Additional products include cast and machined aluminum engine, transmission, brake, suspension and other components, such as pump housings, clutch retainers/pistons, control arms, knuckles, master cylinders, pinion housings, brake calipers, oil pans and flywheel spacers. Our products are primarily used in the following industries: automotive, including automotive and light-vehicle; agricultural equipment; construction equipment; heavy-duty truck; and marine original equipment manufacturers (“OEMs”), on a sole-source basis.

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 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; silicon; coatings; forging; foundry; heavy-duty truck; construction equipment; automotive; oil and gas; locomotive and rail manufacturing; and aerospace and defense.

Sales and operating income for these three segments are provided in Note 4 to the condensed consolidated financial statements, included elsewhere herein.

COVID-19 Pandemic

In March 2020, the World Health Organization categorized the novel coronavirus (“COVID-19”) as a pandemic, and it spread throughout the United States and other countries around the world. The pandemic has negatively impacted several of the markets we serve, as well as contributed to a global semiconductor micro-chip shortage, raw material price inflation, higher labor costs and various supply chain constraints, including supplier delays that caused extended lead times and increasing freight costs. In response to the ongoing COVID-19 pandemic, we continue to manage our operating costs, including through actions to reduce costs, including plant consolidation, severance, and discretionary spending cuts, and we are taking aggressive actions to improve results in response to these macroeconomic conditions. We also continue to manage both working capital and capital spending. Although there continues to be uncertainty related to the anticipated impact and duration of the COVID-19 pandemic on our future results, we believe our diversified portfolio of global businesses, our liquidity position of

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$~~218.0~~224.8 million as of ~~September 30, 2021,~~March 31, 2022, and the steps we have taken ~~in both 2020 and 2021~~during the past two years to reduce costs leave us well-positioned to manage our business through this crisis as it continues to unfold.

2219

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RESULTS OF OPERATIONS

Three Months Ended ~~September 30, 2021~~March 31, 2022 Compared with Three Months Ended ~~September 30, 2020~~March 31, 2021


		Three Months Ended September 30,											Three Months Ended March 31,
		2021			2020			$ Change		% Change			2022			2021			$ Change		% Change
		(Dollars in millions, except per share data)											(Dollars in millions, except per share data)
Net sales	Net sales	$	358.5		$	340.2		$	18.3	5.4	%	Net sales	$	418.4		$	359.6		$	58.8	16.4	%
Cost of sales	Cost of sales	318.4			290.5			27.9		9.6	%	Cost of sales	364.7			307.6			57.1		18.6	%
Gross profit	Gross profit	40.1			49.7			(9.6)		(19.3)	%	Gross profit	53.7			52.0			1.7		3.3	%
Gross margin	Gross margin	11.2		%	14.6		%					Gross margin	12.8		%	14.5		%
Selling, general and administrative (“SG&A”) expenses	Selling, general and administrative (“SG&A”) expenses	45.1			38.7			6.4		16.5	%	Selling, general and administrative (“SG&A”) expenses	45.8			39.7			6.1		15.4	%
SG&A expenses as a percentage of net sales	SG&A expenses as a percentage of net sales	12.6		%	11.4		%					SG&A expenses as a percentage of net sales	10.9		%	11.0		%

Operating (loss) income		(5.0)			11.0			(16.0)		*
Operating income												Operating income	7.9			12.3			(4.4)		(35.8)	%
Other components of pension income and other postretirement benefits expense, net	Other components of pension income and other postretirement benefits expense, net	2.4			1.9			0.5		26.3	%	Other components of pension income and other postretirement benefits expense, net	2.8			2.4			0.4		16.7	%
Interest expense, net	Interest expense, net	(7.6)			(7.4)			(0.2)		2.7	%	Interest expense, net	(7.8)			(7.4)			(0.4)		5.4	%

(Loss) income before income taxes		(10.2)			5.5			(15.7)		*
Income before income taxes												Income before income taxes	2.9			7.3			(4.4)		(60.3)	%
Income tax benefit (expense)	Income tax benefit (expense)	2.8			(0.3)			3.1		*		Income tax benefit (expense)	3.4			(1.9)			5.3		*

Net (loss) income		(7.4)			5.2			(12.6)		*
Net loss attributable to noncontrolling interest		0.2			0.1			0.1		100.0	%
Net (loss) income attributable to Park-Ohio Holdings Corp. common shareholders		$	(7.2)		$	5.3		$	(12.5)	*
Net income												Net income	6.3			5.4			0.9		16.7	%
Net (income) loss attributable to noncontrolling interests												Net (income) loss attributable to noncontrolling interests	(0.2)			0.1			(0.3)		*
Net income attributable to Park-Ohio Holdings Corp. common shareholders												Net income attributable to Park-Ohio Holdings Corp. common shareholders	$	6.1		$	5.5		$	0.6	10.9	%

(Loss) income per common share attributable to Park-Ohio Holdings Corp. common shareholders:
Income per common share attributable to Park-Ohio Holdings Corp. common shareholders:												Income per common share attributable to Park-Ohio Holdings Corp. common shareholders:
Basic	Basic	$	(0.60)		$	0.44		$	(1.04)	*		Basic	$	0.51		$	0.46		$	0.05	10.9	%

Diluted	Diluted	$	(0.60)		$	0.44		$	(1.04)	*		Diluted	$	0.50		$	0.45		$	0.05	11.1	%

*Calculation not meaningful

Net Sales

Net sales increased ~~5.4%~~16.4% to ~~$358.5~~$418.4 million in the ~~third quarter~~first three months of ~~2021~~2022 compared to ~~$340.2~~$359.6 million in the same period in ~~2020.~~2021. This increase was primarily due to higher customer demand ~~across~~in all three of our ~~Supply Technologies and Engineered Products segments, partially offset by lower sales levels in our Assembly Components segment due to the ongoing global semiconductor micro-chip shortage.~~business segments.

The factors explaining the changes in segment net sales for the three months ended ~~September 30, 2021~~March 31, 2022 compared to the corresponding ~~2020 period are contained within the “Segment Results” section below.~~

~~Cost of Sales & Gross Profit~~

~~Cost of sales increased 9.6% to $318.4 million in the third quarter of~~ 2021 ~~compared to $290.5 million in the same period in 2020. The increase incost of sales was primarily due to the increase in net sales for the 2021 period compared to the corresponding period in 2020, as well as the factors listed below that impacted gross margin.~~

Gross margin was 11.2% in the third quarter of 2021 compared to 14.6% in the same period in 2020. The lower margin in the 2021 period compared to a year ago was due to the negative impact of the global semiconductor micro-chip shortage, raw material price inflation, higher labor costs and various supply chain constraints, including supplier delays that caused extended lead times and increasing freight costs, and manufacturing under-absorption of fixed costs at certain plants. The third quarter of 2021 included expenses of $1.8 million related to plant closure and consolidation actions. The third quarter of 2020 included charges of $1.3 million related to plant closure and consolidation, severance and other actions to reduce costs.

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~~SG&A Expenses~~

SG&A expenses increased to $45.1 million in the third quarter of 2021 compared to $38.7 million in the comparable period in 2020, an increase of 16.5%. In response to significantly lower demand levels caused by the COVID-19 pandemic in the 2020 third quarter, the Company took immediate actions in many of its operations to reduce costs, including workforce furloughs, permanent headcount reductions, salary and incentive compensation reductions, and cuts in discretionary spending. As demand levels increased in 2021, a portion of the SG&A expense reduction from 2020 was restored to meet the increasing demand. SG&A expenses in the 2021 period also included $2.5 million of charges related to plant closure and consolidation and other costs. The third quarter of 2020 included charges of $0.5 million related to plant closure and consolidation, severance and other actions to reduce costs.

~~Other Components of Pension Income and Other Postretirement Benefits Expense (“OPEB”), Net~~

~~Other components of pension income and OPEB~~expense, net was $2.4 million in the three months ended September 30, 2021 compared to $1.9 million in the corresponding period in 2020. This increase in the 2021 period relates to higher returns on plan assets in the 2021 period compared to the same period a year ago.

~~Interest Expense, Net~~

~~Interest expense, net was $7.6 million in the third quarter of 2021 compared to $7.4 million in the 2020 period. The increase was due to higher average outstanding borrowings during the 2021 period.~~

~~Income Tax Benefit~~

Income tax benefit for the three months ended September 30, 2021 was $2.8 million, representing an effective rate of 27%, compared to income tax expense $0.3 million, or 5%, for the three months ended September 30, 2020. The rate in the 2021 period is higher than the U.S. statutory rate of 21% due primarily to the additional tax benefit recorded as result of stock compensation that vested and state and local taxes during the quarter. The rate in the 2020 period is lower than the U.S. statutory rate of 21% due primarily to a U.S. net operating loss carryback to a prior year under the CARES Act, a tax benefit from the favorable impact of final Global Intangible Low-Taxed Income (“GILTI”) regulations and a decrease in our Transition Tax liability.

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~~RESULTS OF OPERATIONS~~

~~Nine Months Ended September 30, 2021 Compared with Nine Months Ended September 30, 2020~~

Nine Months Ended September 30,
2021 2020 $ Change % Change
(Dollars in millions, except per share data)
Net sales $ 1,068.1 $ 934.8 $ 133.3 14.3 %
Cost of sales 936.1 817.0 119.1 14.6 %
Gross profit 132.0 117.8 14.2 12.1 %
Gross margin 12.4 % 12.6 %
SG&A expenses 128.1 114.7 13.4 11.7 %
SG&A expenses as a percentage of net sales 12.0 % 12.3 %
Operating income 3.9 3.1 0.8 25.8 %
Other components of pension income and other postretirement benefits expense, net 7.3 5.5 1.8 32.7 %
Interest expense, net (22.4) (22.9) 0.5 (2.2) %
Loss before income taxes (11.2) (14.3) 3.1 (21.7) %
Income tax benefit 3.7 3.8 (0.1) (2.6) %
Net loss (7.5) (10.5) 3.0 (28.6) %
Net loss attributable to noncontrolling interests 0.5 0.4 0.1 25.0 %
Net loss attributable to Park-Ohio Holdings Corp. common shareholders $ (7.0) $ (10.1) $ 3.1 (30.7) %
Loss per common share attributable to Park-Ohio Holdings Corp. common shareholders:
Basic $ (0.58) $ (0.83) $ 0.25 (30.1) %
Diluted $ (0.58) $ (0.83) $ 0.25 (30.1) %

~~Net Sales~~

Net sales increased 14.3% to $1,068.1 million in the first nine months of 2021 compared to $934.8 million in the same period in 2020. This increase was primarily due to higher customer demand in our Supply Technologies and Assembly Components business segments, partially offset by lower demand in our Engineered Products segment.

~~The factors explaining the changes in segment net sales for the nine months ended September 30, 2021 compared to the corresponding 2020~~ period are contained in the “Segment Results” section below.

Cost of Sales & Gross Profit

Cost of sales increased ~~14.6%~~18.6% to ~~$936.1~~$364.7 million in the first ~~nine~~three months of ~~2021~~2022 compared to ~~$817.0~~$307.6 million in the same period in ~~2020.~~2021. The increase in cost of sales was primarily due to the increase in net sales described above.

Gross margin was ~~12.4%~~12.8% in the first ~~nine~~three months of ~~2021~~2022 compared to ~~12.6%~~14.5% in the corresponding period in ~~2020.~~2021. The ~~2021~~2022 period included expenses of ~~$2.9~~$1.8 million related to plant closure and consolidation ~~severance~~ and other ~~actions to reduce~~

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costs. The ~~2020~~2021 period included ~~charges~~expenses of ~~$4.1~~$0.6 million related to plant closure and consolidation, severance and other actions to reduce costs. The

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remaining decline in margin was driven by the ongoing impacts of inflation, higher labor costs and supply chain constraints in the 2022 period.

SG&A Expenses

SG&A expenses were ~~$128.1~~$45.8 million in the first ~~nine~~three months of ~~2021,~~2022, compared to ~~$114.7~~$39.7 million in the same period in ~~2020,~~2021, an increase of ~~11.7%~~15.4%. ~~In response to significantly lower demand levels caused by the pandemic in 2020, the Company took immediate actions in many~~As a percentage of its operations to reduce costs, including workforce furloughs, permanent headcount reductions, salary and incentive compensation reductions, and cuts in discretionary spending. As demand levels increased in 2021, a portion of thenet sales, SG&A ~~expense reduction from 2020 was restored to meet~~expenses were approximately 11% in the ~~increasing demand.~~first quarter of both 2022 and 2021. SG&A expenses in the ~~2021~~2022 period included ~~$4.1~~$1.6 million of ~~charges~~expenses related to plant closure and consolidation, severance and other costs and ~~$0.4~~$0.3 million of acquisition related expenses. Selling expenses were higher in the 2022 period as a result of higher sales levels, and other expenses were higher due to inflation. SG&A expenses in the ~~2020~~2021 period included ~~severance~~expenses of $0.7 million for plant closure and ~~other charges of $1.5 million. As a percentage of net sales, SG&A expenses improved~~consolidation, and lower incentive compensation expense due to ~~12.0% in the 2021 period compared to 12.3% in the 2020 period, as a fixed portion of SG&A expenses were spread over a higher revenue base.~~lower operating results.

Other Components of Pension Income and OPEB, Net

Other components of pension income and OPEB expense, net was ~~$7.3~~$2.8 million in the first ~~nine~~three months of ~~2021~~2022 compared to ~~$5.5~~$2.4 million in the corresponding period in ~~2020.~~2021. This increase was driven by higher returns on plan assets and lower ~~interest costs~~actuarial loss in the ~~2021~~2022 period compared to the same period a year ago.

Interest Expense, Net

Interest expense, net was ~~$22.4~~$7.8 million in the first ~~nine~~three months of ~~2021~~2022 compared to ~~$22.9~~$7.4 million in the ~~2020~~2021 period. The ~~decrease~~increase was due primarily to ~~lower interest rates~~higher outstanding debt balances in the ~~2021~~2022 period compared to the same period a year ago.

Income Tax Benefit

~~Income~~In the three months ended March 31, 2022, income tax benefit ~~for~~was $3.4 million on pre-tax income of $2.9 million. The benefit included a discrete tax benefit of $4.1 million related to a federal research and development credit. In the ~~nine~~three months ended ~~September 30,~~March 31, 2021, income tax expense was ~~$3.7~~$1.9 million, representing an effective income tax rate of ~~33%, compared to $3.8 million, or 27%, for the nine months ended September 30, 2020. The~~26%. This rate ~~in the 2021 period~~ is higher than the U.S. statutory rate of 21% primarily due ~~primarily~~ to ~~the additional benefit recorded as result of the net operating loss carryback claim under the CARES Act and the composition of earnings. The rate in the 2020 period is~~income subject to foreign tax at tax rates higher than the U.S. statutory rate ~~due to the impact of earnings in foreign jurisdictions with statutory income tax rates higher than the U.S. rate.~~and state taxes.

SEGMENT RESULTS

For purposes of business segment performance measurement, the Company 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 or unusual in nature or are corporate costs, which include but are not limited to executive and share-based compensation and corporate office costs.

Supply Technologies Segment


		Three Months Ended September 30,						Nine Months Ended September 30,							Three Months Ended March 31,
		2021			2020			2021			2020					2022			2021
		(Dollars in millions)														(Dollars in millions)
Net sales	Net sales	$	154.0		$	132.0		$	466.7		$	367.2		Net sales		$	168.8		$	157.7
Segment operating income	Segment operating income	$	10.7		$	10.6		$	33.2		$	20.1		Segment operating income		$	12.0		$	12.2
Segment operating income margin	Segment operating income margin	6.9		%	8.0		%	7.1		%	5.5		%	Segment operating income margin		7.1		%	7.7		%

Three months ended ~~September 30:~~March 31:

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Net sales increased ~~16.7%~~7.0% in the three months ended ~~September 30, 2021~~March, 2022 compared to the ~~2020~~2021 period due primarily to higher customer demand in ~~substantially all~~many of the Company's key end markets, with the largest increases in ~~heavy-duty truck,~~ semiconductor, civilian aerospace, industrial and agricultural equipment and ~~industrial equipment. As a result of the COVID-19 pandemic, customer demand in 2020 was down significantly in most of our key end markets.~~heavy-duty truck.

Segment operating income ~~increased~~decreased by ~~$0.1~~$0.2 million and segment operating income margin decreased ~~110~~60 basis points in the ~~2021~~2022 period compared to the same period a year ago. The decrease in margin was driven by higher freight costs in the ~~2021~~2022 period as a result of global supply chain ~~constraints and a labor strike at a major truck assembly plant, partially offset by the benefit of cost-reduction actions.~~

~~Nine months ended September 30:~~

Net sales increased 27.1% in the nine months ended September 30, 2021 compared to the 2020 period due primarily to higher customer demand in most of the Company's end markets, with the biggest increases in heavy-duty truck, powersports, agricultural and industrial equipment, and semiconductor. As a result of the COVID-19 pandemic, customer demand in 2020 was down significantly in most of our key end markets.

Segment operating income increased by $13.1 million and segment operating income margin was up 160 basis points in the 2021 period compared to the same period a year ago. These net increases were driven by increased sales, the impact of cost reduction actions, the impact of pricing initiatives and favorable product mix. These positive factors were partially offset by higher freight costs in the 2021 period as a result of global supply chain constraints and a labor strike at a major truck assembly plant.constraints.

Assembly Components Segment

Three Months Ended September 30, Nine Months Ended September 30,
2021 2020 2021 2020
(Dollars in millions)
Net sales $ 120.2 $ 126.9 $ 355.7 $ 310.0
Segment operating (loss) income $ (8.9) $ 6.7 $ (8.6) $ (1.6)
Segment operating (loss) income margin (7.4) % 5.3 % (2.4) % (0.5) %


	Three Months Ended March 31,
		2022			2021
		(Dollars in millions)
Net sales		$	158.6		$	126.0
Segment operating income		$	2.0		$	6.4
Segment operating income margin		1.3		%	5.1		%

Three months ended ~~September 30:~~March 31:

Net sales ~~decreased 5.2%~~increased 25.9% in the three months ended ~~September 30, 2021~~March 31, 2022 compared to the ~~2020~~2021 period due primarily to higher customer demand driven by fuel-related products launched in 2021; increased net price realization; and the ~~impact~~pass-through of higher aluminum and rubber compound prices in the ~~global~~2022 quarter. In addition, sales in the 2021 periods were negatively impacted by the semiconductor micro-chip shortage ~~that continued~~and supply chain disruptions in the ~~third quarter 2021, which negatively impacted net sales in the quarterly period by approximately $13.1 million.~~automobile industry.

Segment operating ~~loss~~income was ~~$8.9~~$2.0 million in the 2022 period compared $6.4 million in the 2021 ~~period compared to segment operating income of $6.7 million in the 2020~~ period. The ~~loss in~~decrease was due to the ~~2021 period was driven by the negative~~unfavorable impacts of ~~the global semiconductor micro-chip shortage; raw material price inflation;~~inflation, higher labor costs and ~~various~~ supply chain constraints ~~including supplier delays that caused extended lead times~~in the 2022 quarter compared to the same period a year ago, and ~~increasing freight costs; and charges~~expenses of ~~$3.4~~$2.0 million related to plant closure and consolidation activities and other costs. Income in the ~~2020~~2021 period included ~~charges~~expenses related to plant closure and consolidation ~~were $1.4 million.~~

~~Nine months ended September 30:~~

~~Net sales increased 14.7% in the nine months ended September 30, 2021 compared to the 2020 period due primarily to~~

~~the shut-down~~ of North American automotive production in the second quarter of 2020 as a result of the COVID-19 pandemic, partially offset the impact of the global semiconductor micro-chip shortage, which negatively impacted net sales in the 2021 year-to-date period.

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Segment operating income in the 2021 period decreased by $7.0 million, and segment operating income margin decreased 190 basis points compared to the 2020 period. The loss in the 2021 period was driven by the factors listed above under the three-month discussion. In the 2021 period, charges related to plant closure and consolidation and other costs were $4.8 million. The loss in the 2020 period was driven by lower sales as a result of the COVID-19 pandemic and charges related to plant closure and consolidation were $3.7$0.6 million.

Engineered Products Segment


		Three Months Ended September 30,						Nine Months Ended September 30,							Three Months Ended March 31,
		2021			2020			2021			2020					2022			2021
		(Dollars in millions)														(Dollars in millions)
Net sales	Net sales	$	84.3		$	81.3		$	245.7		$	257.6		Net sales		$	91.0		$	75.9
Segment operating income (loss)	Segment operating income (loss)	$	0.6		$	1.3		$	(1.3)		$	4.3		Segment operating income (loss)		$	1.8		$	(1.3)
Segment operating income (loss) margin	Segment operating income (loss) margin	0.7		%	1.6		%	(0.5)		%	1.7		%	Segment operating income (loss) margin		2.0		%	(1.7)		%

Three months ended ~~September 30:~~March 31:

Net sales were ~~3.7%~~19.9% higher in the ~~2021~~2022 period compared to the ~~2020~~2021 period. The increase was due to stronger demand in the ~~2021~~2022 period ~~for~~in both our capital equipment products ~~partially offset by lower customer demand in certain end markets in~~and our forged and machined products business ~~including oil and gas, aerospace, rail and agriculture, which~~as key end markets continue ~~to be slow~~ to recover from the COVID-19 pandemic.

Segment operating income in the ~~2021~~2022 period ~~decreased $0.7~~increased $3.1 million and segment operating income ~~decreased~~increased by 90370 basis points compared to losses in the corresponding ~~2020~~2021 period. ~~These decreases were~~The income improvement in the ~~result~~2022 first quarter compared to the prior year period was driven by the higher sales levels, benefits of ~~manufacturing under-absorption of fixed costs at certain plants~~cost-reduction actions, and ~~charges of $0.6 million in 2021 related to plant closure and consolidation. Charges~~operational improvements.Expenses related to plant closure and consolidation ~~in the 2020 period~~ were ~~$0.4 million.~~

~~Nine months ended September 30:~~

~~Net sales were 4.6% lower in the 2021 period compared to the 2020 period. The decrease was due to lower demand in certain end markets in our forged~~$0.6 million and ~~machined products business which continue to be slow to recover from the pandemic, partially offset by stronger demand in the 2021 period for our capital equipment products~~

~~Segment operating loss was $1.3~~$0.7 million, in the first quarter 2022 and 2021, period compared to segment operating income of $4.3 million in the 2020 period. This decrease in profitability of $5.6 million was due to the lower sales levels, manufacturing under-absorption of fixed costs at certain plants, and charges of $1.9 million related to plant closure and consolidation activities in the 2021 period. Charges related to plant closure and consolidation in the 2020 period were $0.7 million.

respectively.

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Liquidity and Capital Resources

The following table summarizes the major components of cash flow:

Nine Months Ended September 30,
2021 2020 $ Change
Net cash (used) provided by: (In millions)
Operating activities $ (25.9) $ 32.8 $ (58.7)
Investing activities (30.3) (13.5) (16.8)
Financing activities 62.0 (24.1) 86.1
Effect of exchange rate changes on cash (1.2) (0.3) (0.9)
Increase (decrease) in cash and cash equivalents $ 4.6 $ (5.1) $ 9.7


	Three Months Ended March 31,
	2022		2021		$ Change
Net cash (used) provided by:	(In millions)
Operating activities	$	(10.1)	$	9.9	$	(20.0)
Investing activities	(7.1)		(6.6)		(0.5)
Financing activities	25.2		1.5		23.7
Effect of exchange rate changes on cash	(0.5)		(0.9)		0.4
Increase in cash and cash equivalents	$	7.5	$	3.9	$	3.6

Operating Activities

~~Cash generated by operating activities~~In the 2022 first quarter, we had cash usage of $10.1 million compared to cash provided of $9.9 million in the ~~2021~~same period of 2021. The usage of cash was ~~lower than in the prior year period~~ driven by higher working capital ~~usage~~ in the ~~nine~~three months ended ~~September 30, 2021~~March 31, 2022 compared to the same period a year ago. In the ~~2021~~2022 period, working capital ~~usage was $45.1~~increased $25.9 million, compared to ~~working capital reduction in the 2020 period of $12.8 million. Higher inventories were the main driver of our higher working capital in 2021. In the 2021 nine-month period, we utilized cash of $74.7~~$5.0 million to increase inventories, driven by higher raw material prices and increased inventory levels in certain businesses and locations in response to global supply chain constraints, and various facility closures and consolidations. Working capital usage was partially offset by a lower net loss in the 2021 period, ~~compared to~~with the ~~2020 period.~~higher amount in 2022 driven by an increase in accounts receivable of $45.0 million resulting from higher sales levels.

Investing Activities

Capital expenditures were ~~$24.9~~$7.1 million in the ~~nine~~three months ended ~~September 30,~~March 31, 2022 and were primarily to provide increased capacity for future growth in our Assembly Components segment, for facility consolidation in our Engineered Products segment and to maintain existing operations.

Capital expenditures were $6.6 million in the three months ended March 31, 2021 and were primarily to provide increased capacity for future growth in our Assembly Components segment and to maintain existing operations. During the nine months ended September 30, 2021, the Company also acquired NYK Component Solutions Limited (“NYK”) for $5.4 million, net of cash acquired. Capital expenditures of $14.9 million in the 2020 period were lower than in the 2021 period, as we aggressively managed capital spending in 2020 in response to the pandemic.

Financing Activities

During the ~~nine~~three months ended ~~September 30,~~March 31, 2022, we had net debt borrowings of $26.9 million to fund our higher working capital levels. In addition, in the three months ended March 31, 2022, we made a cash dividend payment to shareholders totaling $1.6 million.

During the three months ended March 31, 2021, we had net debt borrowings of ~~$71.8~~$3.2 million ~~compared to repayments of $14.6 million in the 2020 period. The increased borrowings in the 2021 period were used to fund our higher working capital levels~~ and ~~the acquisition of NYK. In addition, in the nine months ended September 30, 2021, we made three cash dividend payments~~paid dividends to shareholders ~~totaling $4.7 million, whereas in the 2020 period, we only made one cash dividend payment totaling~~of $1.6 million, as our dividend was temporarily suspended in the second quarter of 2020 in response to the COVID-19 pandemic. In the 2021 and 2020 periods, the Company repurchased treasury shares totaling $2.5 million and $7.2 million, respectively.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 10 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 and available bank borrowing arrangements) and anticipated cash flow from operations are expected to be adequate to meet anticipated cash requirements for at least the next

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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, pay dividends, pursue acquisitions, and repurchase common shares.

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As of ~~September 30, 2021,~~March 31, 2022, we had total liquidity of ~~$218.0~~$224.8 million, which included ~~$158.4~~$61.6 million cash and cash equivalents, $163.2 million of unused borrowing availability ~~and cash and cash equivalents~~under our credit agreements, which included $45.0 million of ~~$59.6 million.~~suppressed availability.

The Company had cash and cash equivalents held by foreign subsidiaries of ~~$49.3~~$51.4 million at ~~September 30, 2021~~March 31, 2022 and ~~$44.7~~$44.2 million at December 31, ~~2020.~~2021. 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 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.

Credit Agreement

~~In June 2018, Park-Ohio entered into Amendment No. 1 to its~~Park-Ohio’s Seventh Amended and Restated Credit Agreement ~~(the~~(as amended, the “Credit Agreement”)~~. The amendment~~ provides for a

revolving credit facility in the amount of $375.0 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, among other things, provided increases in the availability under the revolving credit facility from $350.0 million to $375.0 million, the Canadian revolving subcommitment from $35.0 million to $40.0 million and the European revolving subcommitment from $25.0 million to $30.0 million. Furthermore, the Company has the

option ~~pursuant to the Credit Agreement,~~ to increase the availability under the revolving credit facility by an aggregate incremental amount up to $100.0 million. ~~In 2019, Park-Ohio entered into Amendment No. 4 to the~~

The Credit Agreement ~~extending the maturity of the Credit Agreement to~~matures on November ~~26,~~16, 2024.

Finance Leases

In August 2015, the Company entered into a Capital Lease Agreement (the “Lease Agreement”). The Lease Agreement provides the Company up to $50.0 million for finance leases. Finance lease obligations of ~~$15.2~~$16.0 million were borrowed under the Lease Agreement to acquire machinery and equipment as of ~~September 30, 2021.~~March 31, 2022.

Covenants

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 $46.875 million, our ability to meet a debt service ratio covenant. If our calculated availability is less than $46.875 million, our debt service coverage ratio must be greater than 1.0. At ~~September 30, 2021,~~March 31, 2022, our calculated availability under the Credit Agreement was ~~$136.6~~$109.5 million; therefore, the debt service ratio covenant did not apply.

Failure to maintain calculated availability of at least $46.875 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, including the negative trends caused by the COVID-19 pandemic. 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 $46.875 million, and a defined debt service coverage ratio of 1.15.

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As our calculated availability under the Credit Agreement was above $46.875 million, we were also in compliance with the other covenants contained in the revolving credit facility as of ~~September 30, 2021.~~March 31, 2022. While we expect to remain in compliance throughout ~~2021,~~2022, declines in sales volumes in the future, including any declines caused by the COVID-19 pandemic, could

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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, including the decline caused by the COVID-19 pandemic, 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 paid dividends to shareholders of ~~$4.7~~$1.6 million during the ~~nine~~three months ended ~~September 30, 2021.~~March 31, 2022. On April 22, 2022, the Company's Board of Directors declared a quarterly dividend of $0.125 per common share. The dividend will be paid on May 20, 2022 to shareholders of record as of the close of business on May 6, 2022 and will result in a cash outlay of approximately $1.6 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, ~~2020,~~2021, both contained in our Annual Report on Form 10-K for the year ended December 31, ~~2020.~~2021. 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.

Forward-Looking Statements

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 ultimate impact the COVID-19 pandemic has on our business, results of operations, financial position and liquidity, including, without limitation, supply chain issues such as the global semiconductor micro-chip shortage and logistic issues; 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

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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

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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;~~hostilities, including the evolving situation with Russia and Ukraine; public health issues, including the outbreak of COVID-19 and its 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, ~~2020.~~2021. 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 ~~September 30, 2021,~~March 31, 2022, 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 ~~$1.7~~$0.6 million during the ~~nine-month~~three-month period ended ~~September 30, 2021.~~March 31, 2022.

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 natural gas prices, which have fluctuated widely in recent years. ~~We do~~During the three months ended March 31, 2022, we entered into an agreement to hedge foreign currency. The agreement will not have ~~any~~a material impact on the results of the Company. We have no other commodity swap agreements or forward purchase ~~or hedge~~ 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.

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Changes in internal control over financial reporting.

During the quarter ended ~~September 30, 2021,~~March 31, 2022, 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.

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Part II. Other Information


Item 1.			Legal Proceedings

We are subject to various pending and threatened lawsuits in which claims for monetary damages are asserted in the ordinary course of business. While any litigation involves 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 ~~September 30, 2021:~~March 31, 2022:

We were a co-defendant in ~~approximately 124~~99 cases asserting claims on behalf of ~~approximately 228~~161 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.

There are four asbestos cases, involving 20 plaintiffs, that plead specified damages against named defendants. In each of the four cases, the plaintiff is seeking compensatory and punitive damages based on a variety of potentially alternative causes of action. In two cases, the plaintiff has alleged three counts at $3.0 million compensatory and punitive damages each; one count at $3.0 million compensatory and $1.0 million punitive damages; one count at $1.0 million. In the third case, the plaintiff has alleged compensatory and punitive damages, each in the amount of $20.0 million, for three separate causes of action, and $5.0 million compensatory damages for the fifth cause of action. In the fourth case, the plaintiff has alleged compensatory and punitive damages, each in the amount of $10.0 million, for ten separate causes of action.

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.

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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, ~~2020.~~2021. Investors should not interpret the disclosure of any risk factor to imply that the risk has not already materialized.


Item 2.			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 ~~September 30, 2021.~~March 31, 2022.

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)
July 1 — July 31, 2021 9,549 (2) $ 32.25 — 541,085
August 1 — August 31, 2021 70,813 (2) 25.31 69,374 471,711
September 1 — September 30, 2021 30,178 (2) 26.93 27,287 444,424
Total 110,540 $ 26.35 96,661 444,424


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, 2022	960	(2)	$	22.34	—	444,424
February 1 — February 28, 2022	1,886	(2)	19.16		—	444,424
March 1 — March 31, 2022	—	(2)	—		—	444,424
Total	2,846		$	20.23	—	444,424

(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 ~~13,879~~2,846 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.


Item 6.			Exhibits

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The following exhibits are included herein:










4.1			Amendment No. 2 to the Seventh Amended and Restated Credit Agreement, dated October 5, 2018, Park-Ohio Industries, Inc., RB&W Corporation of Canada, the European Borrowers (as defined therein) party thereto, the other Loan Parties (as defined therein), the Lenders (as defined therein), JPMorgan Chase Bank, N.A., as administrative agent, JPMorgan Chase Bank, N.A., Toronto Branch, as Canadian agent, J.P. Morgan Europe Limited, as European agent and J.P. Morgan Securities Inc., as sole lead arranger and bookrunning manager

4.2			Amendment No. 3 to the Seventh Amended and Restated Credit Agreement, dated February 19, 2019, Park-Ohio Industries, Inc., RB&W Corporation of Canada, the European Borrowers (as defined therein) party thereto, the other Loan Parties (as defined therein), the Lenders (as defined therein), JPMorgan Chase Bank, N.A., as administrative agent, JPMorgan Chase Bank, N.A., Toronto Branch, as Canadian agent, J.P. Morgan Europe Limited, as European agent and J.P. Morgan Securities Inc., as sole lead arranger and bookrunning manager

4.3			Amendment No. 4 to the Seventh Amended and Restated Credit Agreement, dated November 26, 2019, Park-Ohio Industries, Inc., RB&W Corporation of Canada, the European Borrowers (as defined therein) party thereto, the other Loan Parties (as defined therein), the Lenders (as defined therein), JPMorgan Chase Bank, N.A., as administrative agent, JPMorgan Chase Bank, N.A., Toronto Branch, as Canadian agent, J.P. Morgan Europe Limited, as European agent and J.P. Morgan Securities Inc., as sole lead arranger and bookrunning manager

4.4			Amendment No. 5 to the Seventh Amended and Restated Credit Agreement, dated September 30, 2021, Park-Ohio Industries, Inc., RB&W Corporation of Canada, the European Borrowers (as defined therein) party thereto, the other Loan Parties (as defined therein), the Lenders (as defined therein), JPMorgan Chase Bank, N.A., as administrative agent, JPMorgan Chase Bank, N.A., Toronto Branch, as Canadian agent, J.P. Morgan Europe Limited, as European agent and J.P. Morgan Securities Inc., as sole lead arranger and bookrunning manager

31.1			Principal Executive Officer’s Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

31.2			Principal Financial Officer’s Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

32			Certification requirement under Section 906 of the Sarbanes-Oxley Act of 2002

101.INS			Inline XBRL Instance Document

101.SCH			Inline XBRL Taxonomy Extension Schema Document

101.CAL			Inline XBRL Taxonomy Extension Calculation Linkbase Document

101.DEF			Inline XBRL Taxonomy Extension Definition Linkbase Document

101.LAB			Inline XBRL Taxonomy Extension Label Linkbase Document

101.PRE			Inline XBRL Taxonomy Extension Presentation Linkbase Document

104			Cover Page Interactive Data File (embedded within the Inline XBRL document)

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SIGNATURES

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)

Date: ~~November 3, 2021~~May 10, 2022

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		Page
	Part I. Financial Information

Item 1.	Financial Statements	4





	Notes to unaudited condensed consolidated financial statements — ~~September 30, 2021~~March 31, 2022	1110
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	2118
Item 3.	Quantitative and Qualitative Disclosure About Market Risk	3226
Item 4.	Controls and Procedures	3226

	Part II. Other Information

Item 1.	Legal Proceedings	3428
Item 1A.	Risk Factors	3529
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	3529
Item 6.	Exhibits	3529
Signatures		3631


				Carrying Value at
	Maturity Date	Interest Rate at September 30, 2021		September 30, 2021		December 31, 2020
				(In millions)
Senior Notes	April 15, 2027	6.625	%	$	350.0	$	350.0

Revolving credit facility	November 26, 2024	1.30	%	221.8		143.7


Finance Leases	Various	Various		15.2		18.7
Other	Various	Various		18.2		22.3
Total debt				605.2		534.7
Less current portion of long-term debt and short-term debt				(8.9)		(11.6)

Less unamortized debt issuance costs				(4.2)		(5.3)
Total long-term debt, net				$	592.1	$	517.8