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What changed in PARK OHIO HOLDINGS CORP's 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of PARK OHIO HOLDINGS CORP's 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+168 added−172 removedSource: 10-K (2025-03-06) vs 10-K (2024-03-06)

Top changes in PARK OHIO HOLDINGS CORP's 2024 10-K

168 paragraphs added · 172 removed · 152 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

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Biggest changeThe total purchase price consisted of a cash down payment of $20.0 million paid to the Company in December 2022; cash of $15.5 million paid to the Company at closing; and promissory notes totaling $15.0 million payable to the Company on December 31, 2024, of which $10.0 million is contingent on the Aluminum Products business attaining certain purchase commitments during 2024. 3 Table of Contents The following table summarizes the key attributes of each of our business segments: Supply Technologies Assembly Components Engineered Products NET SALES FOR 2023 $763.4 million $427.8 million $468.5 million SELECTED PRODUCTS Sourcing, planning and procurement of over 280,000 production components, including: • Fasteners • Pins • Valves • Hoses • Wire harnesses • Clamps and fittings • Rubber and plastic components • Other Class C and MRO products • Fuel rails • Fuel filler assemblies • Extruded rubber and plastics • Molded rubber and plastics • Induction heating and melting systems • Pipe threading systems • Industrial oven systems • Forging presses • Forged steel and machined products SELECTED INDUSTRIES SERVED • Heavy-duty truck • Power sports and recreational equipment • Aerospace and defense • Semiconductor equipment • Electrical distribution and controls • Consumer electronics • Bus and coaches • Automotive • Agricultural and construction equipment • HVAC • Lawn and garden • Plumbing • Medical devices • Automotive and light vehicle • Agricultural equipment • Construction equipment • Heavy-duty truck • Bus • Ferrous and non-ferrous metals • Coatings • Forging • Foundry • Heavy-duty truck • Construction equipment • Automotive • Oil and gas • Rail • Aerospace and defense • Power generation The Company consists of the following segments: Supply Technologies Our Supply Technologies business 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.
Biggest changeThe following table summarizes the key attributes of each of our business segments: Supply Technologies Assembly Components Engineered Products NET SALES FOR 2024 $775.8 million $398.7 million $481.7 million SELECTED PRODUCTS Sourcing, planning and procurement of over 280,000 production components, including: • Fasteners • Pins • Valves • Hoses • Wire harnesses • Clamps and fittings • Rubber and plastic components • Other Class C and MRO products • Fuel rails • Fuel filler assemblies • Extruded rubber and plastics • Molded rubber and plastics • Induction heating and melting systems • Pipe threading systems • Industrial oven systems • Forging presses • Forged steel and machined products SELECTED INDUSTRIES SERVED • Heavy-duty truck • Power sports and recreational equipment • Aerospace and defense • Semiconductor equipment • Electrical distribution and controls • Consumer electronics • Bus and coaches • Automotive • Agricultural and construction equipment • HVAC • Lawn and garden • Plumbing • Medical devices • Automotive and light vehicle • Agricultural equipment • Construction equipment • Heavy-duty truck • Bus • Ferrous and non-ferrous metals • Coatings • Forging • Foundry • Heavy-duty truck • Construction equipment • Automotive • Oil and gas • Rail • Aerospace and defense • Power generation The Company consists of the following segments: 3 Table of Contents Supply Technologies Our Supply Technologies business 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.
References herein to “we” or “the Company” include, where applicable, Holdings and Park-Ohio Industries, Inc. and Holdings’ other direct and indirect subsidiaries. The Company operates through three reportable segments: Supply Technologies, Assembly Components and Engineered Products. As of December 31, 2023, we employed approximately 6,300 people.
References herein to “we” or “the Company” include, where applicable, Holdings and Park-Ohio Industries, Inc. and Holdings’ other direct and indirect subsidiaries. The Company operates through three reportable segments: Supply Technologies, Assembly Components and Engineered Products. As of December 31, 2024, we employed approximately 6,300 people.
This engine downsizing increases efficiency, while dramatically decreasing pollution levels. Assembly Components operates 12 manufacturing facilities and three technical offices in the United States, Mexico, China, the United Kingdom and the Czech Republic. In addition, we also provide value-added services such as design engineering, machining and parts assembly. Markets and Customers.
This engine downsizing increases efficiency, while dramatically decreasing pollution levels. Assembly Components operates 11 manufacturing facilities and three technical offices in the United States, Mexico, China, the United Kingdom and the Czech Republic. In addition, we also provide value-added services such as design engineering, machining and parts assembly. Markets and Customers.
Fogarty 62 Vice President and Chief Financial Officer Robert D. Vilsack 63 Chief Legal and Administrative Officer, Corporate Secretary Mr. Crawford was elected President in 2019 and Chairman of the Board and Chief Executive Officer in 2018. Prior to that, he served as President and Chief Operating Officer from 2003 to 2018. Mr.
Fogarty 63 Vice President and Chief Financial Officer Robert D. Vilsack 64 Chief Legal and Administrative Officer, Corporate Secretary Mr. Crawford was elected President in 2019 and Chairman of the Board and Chief Executive Officer in 2018. Prior to that, he served as President and Chief Operating Officer from 2003 to 2018. Mr.
We operate approximately 80 logistics service centers in the United States, Mexico, Canada, Czech Republic, Puerto Rico, Scotland, Hungary, China, Taiwan, Singapore, India, England, France, Spain, Poland, Malaysia, Northern Ireland and Ireland, including production sourcing and support centers in the United States and Asia.
We operate approximately 80 logistics service centers in the United States, Mexico, Canada, Czech Republic, Puerto Rico, Scotland, Hungary, China, Taiwan, Singapore, India, England, France, Spain, Poland, Wales, Northern Ireland and Ireland, including production sourcing and support centers in the United States and Asia.
Some 4 Table of Contents production components are characterized by low per unit supplier prices relative to the indirect costs of supplier management, quality assurance, inventory management and delivery to the production line. In addition, Supply Technologies delivers an increasingly broad range of higher-value production components including valves, fuel hose assemblies, electro-mechanical hardware, labels, fittings, steering components and many others.
Some production components are characterized by low per unit supplier prices relative to the indirect costs of supplier management, quality assurance, inventory management and delivery to the production line. In addition, Supply Technologies delivers an increasingly broad range of higher-value production components including valves, fuel hose assemblies, electro-mechanical hardware, labels, fittings, steering components and many others.
Approximately 45% of our induction heating and melting systems’ revenues are derived from the sale of replacement parts and provision of field service, primarily for the installed base of our own products. Our pipe threading business serves the oil and gas industry.
Approximately 48% of our induction heating and melting systems’ revenues are derived from the sale of replacement parts and provision of field service, primarily for the installed base of our own products. Our pipe threading business serves the oil and gas industry.
Sales and Marketing 6 Table of Contents Supply Technologies markets its products and services in the United States, Mexico, Canada, Europe and Asia primarily through its direct sales force, which is assisted by applications engineers who provide the technical expertise necessary to assist the engineering staff of OEM customers in designing new products and improving existing products.
Sales and Marketing Supply Technologies markets its products and services in the United States, Mexico, Canada, Europe and Asia primarily through its direct sales force, which is assisted by applications engineers who provide the technical expertise necessary to assist the engineering staff of OEM customers in designing new products and improving existing products.
Examples of benefits offered in the U.S. include a 401(k) plan, defined benefit - cash balance plan, comprehensive health benefits, employee assistance programs, business travel, life/disability insurance and supplemental voluntary insurance. Training & Talent Development : The Company is committed to continued development of our workforce. Training is provided in several formats to accommodate workforce diversity and business focus.
Examples of benefits offered in the U.S. include a 401(k) plan, defined benefit - cash balance plan, comprehensive health benefits, employee assistance programs, business travel, life/disability insurance and supplemental voluntary insurance. Training & Talent Development : The Company is committed to continued development of our workforce. Training is provided in several formats.
The loss of any two or more of its top five customers could have a material adverse effect on the results of operations and financial condition of this segment. Competition. A limited number of companies compete with Supply Technologies to provide supply management services for production parts and materials.
The loss of any two or more of its top five customers could have a material adverse effect on the results of operations and financial condition of this segment. 4 Table of Contents Competition. A limited number of companies compete with Supply Technologies to provide supply management services for production parts and materials.
In addition, various internship programs and informal mentoring demonstrate the Company’s ongoing commitment and initiatives toward accelerating our future leaders. Available Information 8 Table of Contents We file Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, Proxy Statements and other information with the Securities and Exchange Commission (“SEC”).
In addition, various internship programs and informal mentoring demonstrate the Company’s ongoing commitment and initiatives toward accelerating our future leaders. Available Information We file Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, Proxy Statements and other information with the Securities and Exchange Commission (“SEC”).
We manufacture these products in 14 domestic facilities throughout the United States and 19 international facilities in Canada, Mexico, the United Kingdom, Belgium, Germany, China, Italy, India, Japan, Spain, France and Brazil.
We manufacture these products in 13 domestic facilities throughout the United States and 19 international facilities in Canada, Mexico, the United Kingdom, Belgium, Germany, China, Italy, India, Japan, Spain, France and Brazil.
These advanced products, coupled with Turbo Enabled engines, make up large and growing engine architecture for all 5 Table of Contents worldwide car manufacturers. Assembly Components also designs and manufactures Turbo Charging hoses along with Turbo Coolant hoses that will be required as engines get downsized to 3 or 4 cylinders from 6 or 8 cylinders.
These advanced products, coupled with Turbo Enabled engines, make up large and growing engine architecture for all worldwide car manufacturers. Assembly Components also designs and manufactures Turbo Charging hoses along with Turbo Coolant hoses that will be required as engines get downsized to 3 or 4 cylinders from 6 or 8 cylinders.
Supply Technologies produces both standard items and specialty products to customer specifications, which are used in large volumes by customers in the automotive, heavy-duty truck and aerospace industries. Markets and Customers. For the year ended December 31, 2023, approximately 60% of Supply Technologies’ net sales were to domestic customers.
Supply Technologies produces both standard items and specialty products to customer specifications, which are used in large volumes by customers in the automotive, heavy-duty truck and aerospace industries. Markets and Customers. For the year ended December 31, 2024, approximately 57% of Supply Technologies’ net sales were to domestic customers.
The information on our website is not a part of this Annual Report on Form 10-K. Information About our Executive Officers Information with respect to our executive officers as of March 6, 2024, is as follows: Name Age Position Matthew V. Crawford 54 Chairman of the Board, Chief Executive Officer and President Patrick W.
The information on our website is not a part of this Annual Report on Form 10-K. Information About our Executive Officers Information with respect to our executive officers as of March 6, 2025, is as follows: Name Age Position Matthew V. Crawford 55 Chairman of the Board, Chief Executive Officer and President Patrick W.
For the year ended December 31, 2023, approximately 70% of Assembly Components’ net sales were to domestic customers. The five largest customers of Assembly Components accounted for approximately 57% and 55% of segment sales for 2023 and 2022, respectively. These sales, across multiple operating divisions, are through sole-source contracts.
For the year ended December 31, 2024, approximately 66% of Assembly Components’ net sales were to domestic customers. The five largest customers of Assembly Components accounted for approximately 55% and 57% of segment sales for 2024 and 2023, respectively. These sales, across multiple operating divisions, are through sole-source contracts.
The Chief Compliance Officer reports matters related to the Code to the Audit Committee of the Board of Directors on a quarterly basis. Compensation & Benefits : Our policy is to competitively compensate our employees.
The Chief Compliance Officer reports matters related to the Code to the Audit Committee of the Board of Directors on a quarterly basis. 7 Table of Contents Compensation & Benefits : Our policy is to competitively compensate our employees.
Supply Technologies markets and sells to over 7,500 customers domestically and internationally. The five largest customers, to which Supply Technologies sells through sole-source contracts to multiple operating divisions or locations, accounted for approximately 36% and 35% of the sales of Supply Technologies in 2023 and 2022, respectively.
Supply Technologies markets and sells to over 7,500 customers domestically and internationally. The five largest customers, to which Supply Technologies sells through sole-source contracts to multiple operating divisions or locations, accounted for approximately 34% and 36% of the sales of Supply Technologies in 2024 and 2023, respectively.
The availability of third-party payments or insurance for environmental remediation activities is subject to risks associated with the 7 Table of Contents willingness and ability of the third party to make payments.
The availability of third-party payments or insurance for environmental remediation activities is subject to risks associated with the willingness and ability of the third party to make payments.
We forge aerospace and defense structural components such as landing gears and struts, as well as rail products such as railcar center plates and draft lugs. Markets and Customers. For the year ended December 31, 2023, approximately 57% of Engineered Products’ net sales were to domestic customers.
We forge aerospace and defense structural components such as landing gears and struts, as well as rail products such as railcar center plates and draft lugs. 5 Table of Contents Markets and Customers. For the year ended December 31, 2024, approximately 54% of Engineered Products’ net sales were to domestic customers.
Human Capital Resources As of December 31, 2023, we employed approximately 6,300 employees in our operations around the world. Approximately 2,600 of these employees are in the United States, while the remaining 3,700 are employed in other countries. Approximately 37% of our employees are covered by a collective bargaining agreement.
Human Capital Resources As of December 31, 2024, we employed approximately 6,300 employees in our operations around the world. Approximately 2,500 of these employees are in the United States, while the remaining 3,800 are employed in other countries. Approximately 33% of our employees are covered by a collective bargaining agreement.
Additionally, persons who arrange for the disposal or treatment of hazardous substances or materials may be liable for costs of response at sites where they are located, whether or not the site is owned or operated by such person.
Additionally, persons who arrange for the disposal or treatment of hazardous substances or materials may be liable for costs of response at sites where they are located, whether or not the site is owned or operated by such person. 6 Table of Contents From time to time, we have incurred, and are presently incurring, costs and obligations for correcting environmental noncompliance and remediating environmental conditions at certain of our properties.
On December 29, 2023, the Company completed the sale of its Aluminum Products business to Angstrom Automotive Group (“Angstrom”) for up to $50.5 million in cash and promissory notes, plus the assumption of approximately $3 million of finance lease obligations.
On December 29, 2023, the Company completed the sale to Angstrom Automotive Group of its Aluminum Products business, which has been classified as a discontinued operation for all periods presented.
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From time to time, we have incurred, and are presently incurring, costs and obligations for correcting environmental noncompliance and remediating environmental conditions at certain of our properties.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeIn addition, any such damage, compromise or breach to our systems or those of our vendors, could result in a violation of privacy and other laws, and expose us to significant legal and financial liability. We recognize the ever-present global risk of cyberattacks from diverse threat actors, including nation-states, cybercriminals, hacktivists, insiders and organized crime.
Biggest changeIn addition, any such damage, any cybersecurity incident, compromise or breach to our systems or those of our vendors, could result in a violation of privacy and other laws, and expose us to significant legal and financial liability, including costs related to individual claims or consumer class actions, commercial litigation, administrative, and civil or criminal investigations or actions, regulatory intervention and sanctions or fines, investigation and remediation costs, loss of intellectual property, release of confidential information, and costs related to alteration or corruption of data or systems.
While no organization is immune to attack attempts and we cannot eliminate all risks from cybersecurity threats or provide assurance that we have not experienced an undetected cybersecurity incident, in 2023 we did not identify any material cybersecurity events that have materially affected or are reasonably likely to materially affect our business strategy, results of operations or financial condition.
While no organization is immune to attack attempts and we cannot eliminate all risks from cybersecurity threats or provide assurance that we have not experienced an undetected cybersecurity incident, in 2024 we did not identify any material cybersecurity events that have materially affected or are reasonably likely to materially affect our business strategy, results of operations or financial condition.
As of December 31, 2023, we were in compliance with our debt service coverage ratio covenant and other covenants contained in our revolving credit facility. While we expect to remain in compliance throughout 2024, declines in demand in the automotive industry and in sales volumes could adversely impact our ability to remain in compliance with certain of these financial covenants.
As of December 31, 2024, we were in compliance with our debt service coverage ratio covenant and other covenants contained in our revolving credit facility. While we expect to remain in compliance throughout 2025, declines in demand in the automotive industry and in sales volumes could adversely impact our ability to remain in compliance with certain of these financial covenants.
Our operations are subject to the risks of doing business abroad, including the following: • fluctuations in currency exchange rates; • limitations on ownership and on repatriation of earnings; • transportation delays and interruptions; • political, social and economic instability and disruptions, including the conflicts between Russia and Ukraine and in the middle east, or political unrest, including the rising tension between China and the United States; • potential disruption that could be caused by the partial or complete reconfiguration of the European Union; • government embargoes or foreign trade restrictions; • the imposition of duties and tariffs and other trade barriers; • import and export controls; • labor unrest and current and changing regulatory environments; • the potential for nationalization of enterprises; • disadvantages of competing against companies from countries that are not subject to U.S. laws and regulations, including the U.S.
Our operations are subject to the risks of doing business abroad, including the following: • fluctuations in currency exchange rates; • limitations on ownership and on repatriation of earnings; • transportation delays and interruptions; 13 Table of Contents • political, social and economic instability and disruptions, including the conflicts between Russia and Ukraine and in the middle east, or political unrest, including the rising tension between China and the United States; • potential disruption that could be caused by the partial or complete reconfiguration of the European Union; • government embargoes or foreign trade restrictions; • the imposition of duties and tariffs on both imports and exports and other trade barriers; • import and export controls; • labor unrest and current and changing regulatory environments; • the potential for nationalization of enterprises; • disadvantages of competing against companies from countries that are not subject to U.S. laws and regulations, including the U.S.
Accordingly, many of our Supply Technologies customers may decrease the number of products and services that they purchase from us or even stop purchasing from us altogether, either of which could have a material adverse effect on our net sales and profitability. 10 Table of Contents We are dependent on key customers. We rely on several key customers.
Accordingly, many of our Supply Technologies customers may decrease the number of products and services that they purchase from us or even stop purchasing from us altogether, either of which could have a material adverse effect on our net sales and profitability. We are dependent on key customers. We rely on several key customers.
Failure to compete successfully could have a material adverse effect on our financial condition, liquidity and results of operations. Our Supply Technologies business depends upon third parties for substantially all of our component parts. Our Supply Technologies business purchases substantially all of its component parts from third-party suppliers and manufacturers.
Failure to compete successfully could have a material adverse effect on our financial condition, liquidity and results of operations. 10 Table of Contents Our Supply Technologies business depends upon third parties for substantially all of our component parts. Our Supply Technologies business purchases substantially all of its component parts from third-party suppliers and manufacturers.
The occurrence of material operating problems at our facilities may have a material adverse effect on our operations as a whole, both during and after the period of operational difficulties. 12 Table of Contents We have a significant amount of goodwill, and any future goodwill impairment charges could adversely impact our results of operations.
The occurrence of material operating problems at our facilities may have a material adverse effect on our operations as a whole, both during and after the period of operational difficulties. We have a significant amount of goodwill, and any future goodwill impairment charges could adversely impact our results of operations.
Our supply of raw materials for our Assembly Components and Engineered Products businesses could continue to be interrupted for a variety of reasons, including supply chain constraints and price increases, raw material price inflation, supplier delays that increase lead times and higher freight costs, among other factors, may continue to have an adverse effect on our results of operations and profit margins.
Our supply of raw materials for our Assembly Components and Engineered Products businesses could continue to be interrupted or adversely affected for a variety of reasons, including supply chain constraints and price increases, tariffs, raw material price inflation, supplier delays that increase lead times and higher freight costs, among other factors, may continue to have an adverse effect on our results of operations and profit margins.
Longer-term disruptions in the 9 Table of Contents capital and credit markets as a result of uncertainty, changing or increased regulation, reduced alternatives or failures of significant financial institutions could adversely affect our access to liquidity needed for our business.
Longer-term disruptions in the capital and credit markets as a result of uncertainty, changing or increased regulation, reduced alternatives or failures of significant financial institutions could adversely affect our access to liquidity needed for our business.
For the year ended December 31, 2023, our ten largest customers accounted for approximately 26% of our net sales. Many of our customers place orders for products on an as-needed basis and operate in cyclical industries and, as a result, their order levels have varied from period to period in the past and may vary significantly in the future.
For the year ended December 31, 2024, our ten largest customers accounted for approximately 24% of our net sales. Many of our customers place orders for products on an as-needed basis and operate in cyclical industries and, as a result, their order levels have varied from period to period in the past and may vary significantly in the future.
Risks Relating to Human Capital Some of our employees belong to labor unions, and strikes or work stoppages could adversely affect our operations. As of December 31, 2023, we were a party to eight collective bargaining agreements with various labor unions that covered approximately 2,400 full-time employees.
Risks Relating to Human Capital Some of our employees belong to labor unions, and strikes or work stoppages could adversely affect our operations. As of December 31, 2024, we were a party to eight collective bargaining agreements with various labor unions that covered approximately 2,100 full-time employees.
As of December 31, 2023, Matthew Crawford, our Chairman of the Board, Chief Executive Officer and President, and Edward Crawford, our former President, collectively beneficially owned approximately 29% of Holdings’ outstanding common stock. Mr. M. Crawford is Mr. E. Crawford’s son. Their interests could conflict with your interests.
As of December 31, 2024, Matthew Crawford, our Chairman of the Board, Chief Executive Officer and President, and Edward Crawford, our former President, collectively beneficially owned approximately 28% of Holdings’ outstanding common stock. Mr. M. Crawford is Mr. E. Crawford’s son. Their interests could conflict with your interests.
Our information technology systems and those of our third-party providers are subject to disruptions or damage, which may be caused by a wide array of causes, including telecommunications failures, computer failures, power outages, ransomware attacks, computer viruses, cybersecurity incidents and other intrusions, which could result in the disruption of our operations, or information misappropriation, such as theft of intellectual property or inappropriate disclosure of personal and confidential information.
Our information technology systems and those of our third-party providers are subject to breaches, disruptions or damage, which may be caused by a wide array of causes, including telecommunications failures, computer failures, power outages, ransomware attacks, the deployment of harmful malware, denial-of-services attacks, computer viruses, cybersecurity incidents and other intrusions, which could result in the disruption of our operations, or information misappropriation, such as theft of intellectual property or inappropriate disclosure of personal and confidential information.
In addition, labor disturbances affecting our customers could continue to impact our sales to certain key customers, particularly in the automotive and heavy-duty truck industries, which could continue to have an adverse effect on our business, results of operations and financial condition.
In addition, labor disturbances affecting our customers could continue to impact our sales to certain key customers, particularly in the automotive and heavy-duty truck industries, which could continue to have an adverse effect on our business, results of operations and financial condition. The loss of key executives could adversely impact us.
We may experience breaches of, or disruptions to, our information technology systems or those of our third-party providers, or other compromises of our data, including the improper disclosure of personal or confidential data, which may adversely affect our operations and reputation .
We may experience cybersecurity threats and cyber security incidents, breaches of, or disruptions to, our information technology systems or those of our third-party providers, or other compromises of our data, including the improper disclosure of personal or confidential data, which may adversely affect our operations and reputation .
Compliance with these laws and regulations is a significant factor in our business. We have incurred and expect to continue to incur significant expenditures to comply with applicable environmental laws and regulations.
Compliance with these laws and regulations is a significant factor in our business. We have incurred and expect to continue to incur significant expenditures to comply with applicable environmental 14 Table of Contents laws and regulations.
In addition, we could be adversely affected by violations of the FCPA and similar worldwide anti-bribery laws. The FCPA and similar anti-bribery laws in other jurisdictions generally prohibit companies and their intermediaries from making improper payments to non-U.S. officials for the purpose of obtaining or retaining business. Our policies mandate compliance with these anti-bribery laws.
The FCPA and similar anti-bribery laws in other jurisdictions generally prohibit companies and their intermediaries from making improper payments to non-U.S. officials for the purpose of obtaining or retaining business. Our policies mandate compliance with these anti-bribery laws.
When we do enter into long-term contracts with our Supply Technologies customers, many of them only establish pricing terms and do not obligate our customers to buy required minimum amounts from us or to buy from us exclusively.
We supply products and services to our Supply Technologies customers generally under purchase orders as opposed to long-term contracts. When we do enter into long-term contracts with our Supply Technologies customers, many of them only establish pricing terms and do not obligate our customers to buy required minimum amounts from us or to buy from us exclusively.
Additionally, severe disruptions in the domestic and global financial markets could adversely impact the ratings and survival of some insurers. In the future, we may not be able to obtain coverage at current levels, and our premiums may increase significantly on coverage that we maintain.
We are potentially at risk if one or more of our insurance carriers fail. Additionally, severe disruptions in the domestic and global financial markets could adversely impact the ratings and survival of some insurers. In the future, we may not be able to obtain coverage at current levels, and our premiums may increase significantly on coverage that we maintain.
Risks Relating to the Execution of our Strategy We may encounter difficulty in expanding our business through targeted acquisitions. We have pursued, and may continue to pursue, targeted acquisition opportunities that we believe would complement our business. We cannot assure you that we will be successful in consummating any acquisitions.
Risks Relating to the Execution of our Strategy We may encounter difficulty in expanding our business through targeted acquisitions. We have pursued, and may continue to pursue, targeted acquisition opportunities that we believe would complement our business.
Industries we serve, including the automotive and vehicle parts, heavy-duty truck, industrial equipment, steel, rail, oil and gas, electrical distribution and controls, aerospace and defense, recreational equipment, HVAC, electrical components, appliance and semiconductor equipment industries, are affected by consumer spending, general economic conditions and the impact of international trade, which have been adversely affected by the COVID-19 pandemic as well as inflation.
Industries we serve, including the automotive and vehicle parts, heavy-duty truck, industrial equipment, steel, rail, oil and gas, electrical distribution and controls, aerospace and defense, recreational equipment, HVAC, 8 Table of Contents electrical components, appliance and semiconductor equipment industries, are affected by consumer spending, general economic conditions and the impact of international trade, which have been adversely affected by inflation and could be adversely affected by tariffs and the renegotiation of trade agreements.
Risks Relating to Legal, Compliance and Regulatory Matters Potential product liability risks exist from the products that we sell. Our businesses expose us to potential product liability risks that are inherent in the design, manufacture and sale of our products and products of third-party vendors that we use or resell.
Our businesses expose us to potential product liability risks that are inherent in the design, manufacture and sale of our products and products of third-party vendors that we use or resell.
You should not interpret the disclosure of any risk factor to imply that the risk has not already materialized. If any of the following risks occur, our business, results of operations or financial condition could be adversely affected. Risks Relating to the Economic Conditions The industries in which we operate are cyclical and are affected by the economy in general.
If any of the following risks occur, our business, results of operations or financial condition could be adversely affected. Risks Relating to Economic Conditions The industries in which we operate are cyclical and are affected by the economy in general.
In addition, we have seen a decline in the skilled labor applicant pool since the start of the COVID-19 pandemic and increased competition for skilled labor.
In addition, we have seen a decline in the skilled labor applicant pool and increased competition for skilled labor.
Risks Relating to Our Business and Operations Because a significant portion of our sales is to the automotive and heavy-duty truck industries, a decrease in the demand of these industries or the loss of any of our major customers in these industries could adversely affect our financial health.
Risks Relating to Our Business and Operations Because a significant portion of our sales is to the automotive and heavy-duty truck industries, a decrease in the demand of these industries or the loss of any of our major customers in these industries could adversely affect our financial health. 9 Table of Contents Demand for certain of our products is affected by, among other things, the relative strength or weakness of the automotive and heavy-duty truck industries.
Our success as a global business will depend, in part, upon our ability to succeed 14 Table of Contents in differing legal, regulatory, economic, social and political conditions by developing, implementing and maintaining policies and strategies that are effective in each location where we do business.
Our success as a global business will depend, in part, upon our ability to succeed in differing legal, regulatory, economic, social and political conditions by developing, implementing and maintaining policies and strategies that are effective in each location where we do business. In addition, we could be adversely affected by violations of the FCPA and similar worldwide anti-bribery laws.
We may not be able to increase our prices commensurate with our increased costs. Consequently, our results of operations and financial condition may be materially adversely affected. The energy costs involved in our production processes and transportation are subject to fluctuations that are beyond our control and could significantly increase our costs of production.
Consequently, our results of operations and financial condition may be materially adversely affected. The energy costs involved in our production processes and transportation are subject to fluctuations that are beyond our control and could significantly increase our costs of production. Our manufacturing process and the transportation of raw materials, components and finished goods are energy intensive.
We are also exposed to risks relating to U.S. policy with respect to companies doing business in foreign jurisdictions. Changes in tax policy, trade regulations or trade agreements, such as the disallowance of tax deductions on imported merchandise or the imposition of new tariffs on imported products, could have a material adverse effect on our business and results of operations.
Changes in tax policy, trade regulations or trade agreements, such as the disallowance of tax deductions on imported merchandise or the imposition of new tariffs on imported or exported products, could have a material adverse effect on our business and results of operations.
Additionally, an event of default occurs under our revolving credit facility if Messrs. M. Crawford and Edward Crawford, our former President, or certain of their related parties own in the aggregate less than 15% of Holdings’ outstanding common stock and, if at such time, neither Mr. M. Crawford nor Mr. E.
Crawford and Edward Crawford, our former President, or certain of their related parties own in the aggregate less than 15% of Holdings’ outstanding common stock and, if at such time, neither Mr. M. Crawford nor Mr. E. Crawford holds the office of chairman, chief executive officer or president. The loss of the services of Mr. M.
We maintain property, business interruption and casualty insurance, but such insurance may not cover all risks associated with the hazards of our business and is subject to limitation, including deductible and maximum liabilities covered. We are potentially at risk if one or more of our insurance carriers fail.
The insurance that we maintain may not fully cover all potential expenses. 12 Table of Contents We maintain property, business interruption and casualty insurance, but such insurance may not cover all risks associated with the hazards of our business and is subject to limitation, including deductible and maximum liabilities covered.
We may be exposed to certain regulatory and financial risks related to climate change. Growing concerns about climate change may result in the imposition of additional regulations or restrictions to which we may become subject.
We may be exposed to certain regulatory and financial risks related to climate change. Growing concerns about climate change may result in the imposition of additional regulations or restrictions to which we may become subject. A number of governments or governmental bodies have introduced or are contemplating regulatory changes in response to climate change, including regulating greenhouse gas emissions.
We depend upon the ability of these suppliers, among other things, to meet stringent performance and quality specifications and to conform to delivery schedules. Failure by third-party suppliers to comply with these and other requirements could have a material adverse effect on our financial condition, liquidity and results of operations.
Failure by third-party suppliers to comply with these and other requirements could have a material adverse effect on our financial condition, liquidity and results of operations.
While we generally attempt to pass along increased raw materials prices to our customers in the form of price increases, there may be a time delay between the increased raw materials prices and our ability to increase the price of our products, or we may be unable to increase the prices of our products due various factors. 11 Table of Contents Our suppliers of component parts, particularly in our Supply Technologies business, may continue to significantly and quickly increase their prices in response to increases in costs of the raw materials, such as steel, that they use to manufacture our component parts.
While we generally attempt to pass along increased raw materials prices to our customers in the form of price increases, there may be a time delay between the increased raw materials prices and our ability to increase the price of our products, or we may be unable to increase the prices of our products due to various factors.
Any such operational disruptions and/or misappropriation of information, whether in systems we maintain or are maintained by others, could have a material adverse effect on our business.
To the extent our information technology systems or those of our third-party providers 11 Table of Contents are disabled, compromised, or disrupted, key business processes could be interrupted. Any such operational disruptions and/or misappropriation of information, whether in systems we maintain or are maintained by others, could have a material adverse effect on our business.
Any of these factors may disrupt our operations and adversely affect our financial condition and the results of operations. The insurance that we maintain may not fully cover all potential expenses.
Any of these factors may disrupt our operations and adversely affect our financial condition and the results of operations.
Any targeted acquisitions will be accompanied by the risks commonly encountered in acquisitions of businesses.
We cannot assure you that we will be successful in consummating any acquisitions. 15 Table of Contents Any targeted acquisitions will be accompanied by the risks commonly encountered in acquisitions of businesses.
Our manufacturing process and the transportation of raw materials, components and finished goods are energy intensive. Our manufacturing processes are dependent on adequate supplies of electricity and natural gas. A substantial increase in the cost of transportation fuel, natural gas or electricity could have a material adverse effect on our margins.
Our manufacturing processes are dependent on adequate supplies of electricity and natural gas. A substantial increase in the cost of transportation fuel, natural gas or electricity could have a material adverse effect on our margins. We may experience higher than anticipated gas costs in the future, which could adversely affect our results of operations.
As of December 31, 2023, we had goodwill of $110.2 million.
As of December 31, 2024, we had goodwill of $111.7 million.
The loss of key executives could adversely impact us. 13 Table of Contents Our success depends upon the efforts, abilities and expertise of our executive officers and other senior managers, including Matthew Crawford, our Chairman, Chief Executive Officer and President, as well as the president of each of our operating units.
Our success depends upon the efforts, abilities and expertise of our executive officers and other senior managers, including Matthew Crawford, our Chairman, Chief Executive Officer and President, as well as the president of each of our operating units. Additionally, an event of default occurs under our revolving credit facility if Messrs. M.
In spite of our efforts, we (or third parties we rely on) may not be able to fully, continuously and effectively implement security controls as intended.
We recognize the ever-present global risk of cybersecurity threats, cybersecurity incidents, and cyberattacks from diverse threat actors, including nation-states, cybercriminals, hacktivists, insiders and organized crime. In spite of our efforts, we (or third parties we rely on) may not be able to fully, continuously and effectively implement security controls as intended.
For example, our business in the European Union or elsewhere may be impacted by the conflict between Russia and Ukraine and any economic or trade sanctions enacted to condemn or counteract any Russian aggression towards or invasion of Ukraine.
Our international sales and operations are also sensitive to changes in foreign national priorities, as well as to political and economic instability. For example, our business in the European Union or elsewhere may be impacted by the conflict between Russia and Ukraine and any economic or trade sanctions enacted in response to the conflict.
We may experience higher than anticipated gas costs in the future, which could adversely affect our results of operations. In addition, a disruption or curtailment in supply could have a material adverse effect on our production and sales levels.
In addition, a disruption or curtailment in supply could have a material adverse effect on our production and sales levels.
In addition, the automotive and heavy-duty truck industries are significantly unionized and subject to work slowdowns and stoppages resulting from labor disputes, such as the United Auto Workers strike in 2023. We derived 33% and 8% of our net sales during the year ended December 31, 2023 from the automotive and heavy-duty truck industries, respectively.
The domestic automotive and heavy-duty truck industries are also highly cyclical and may be adversely affected by international competition. In addition, the automotive and heavy-duty truck industries are significantly unionized and subject to work slowdowns and stoppages resulting from labor disputes, such as the United Auto Workers strike in 2023.
The loss of a portion of business to any of our major automotive or heavy-duty truck customers could have a material adverse effect on our financial condition, cash flow and results of operations. We cannot assure you that we will maintain or improve our relationships in these industries or that we will continue to supply these customers at current levels.
We derived 32% and 10% of our net sales during the year ended December 31, 2024 from the automotive and heavy-duty truck industries, respectively. The loss of a portion of business to any of our major automotive or heavy-duty truck customers could have a material adverse effect on our financial condition, cash flow and results of operations.
As such, it is subject to the risk of price fluctuations and periodic delays in the delivery of component parts. Failure by suppliers to continue to supply us with these component parts on commercially reasonable terms, or at all, could have a material adverse effect on us.
Additionally, failure by suppliers to continue to supply us with these component parts on commercially reasonable terms, or at all, could have a material adverse effect on us. We depend upon the ability of these suppliers, among other things, to meet stringent performance and quality specifications and to conform to delivery schedules.
Crawford holds the office of chairman, chief executive officer or president. The loss of the services of Mr. M. Crawford, senior and executive officers, and/or other key individuals could have a material adverse effect on our financial condition, liquidity and results of operations.
Crawford, senior and executive officers, and/or other key individuals could have a material adverse effect on our financial condition, liquidity and results of operations. Risks Relating to Legal, Compliance and Regulatory Matters Potential product liability risks exist from the products that we sell.
Our Supply Technologies customers are generally not contractually obligated to purchase products and services from us. We supply products and services to our Supply Technologies customers generally under purchase orders as opposed to long-term contracts.
We cannot assure you that we will maintain or improve our relationships in these industries or that we will continue to supply these customers at current levels. Our Supply Technologies customers are generally not contractually obligated to purchase products and services from us.
In addition, we could also experience data or cybersecurity incidents stemming from the intentional or negligent acts of our employees or other third parties. To the extent our information technology systems or those of our third-party providers are disabled, compromised, or disrupted for a long period of time, key business processes could be interrupted.
Cybersecurity threat actors also may attempt to exploit vulnerabilities through software including software commonly used by companies in cloud-based services and bundled software. In addition, we could also experience data or cybersecurity incidents stemming from the intentional or negligent acts of our employees or other third parties.
Removed
Demand for certain of our products is affected by, among other things, the relative strength or weakness of the automotive and heavy-duty truck industries. The domestic automotive and heavy-duty truck industries are also highly cyclical and may be adversely affected by international competition.
Added
The new U.S. presidential administration has announced tariffs on goods manufactured abroad, including goods manufactured in China, Mexico and Canada, as well as on steel and aluminum. These tariffs will increase costs for certain goods imported into the United States, including certain of our raw materials and components, which will increase our costs.
Removed
Our international sales and operations are also sensitive to changes in foreign national priorities, as well as to political and economic instability.
Added
Our inability to pass along our increased costs to our customers, in whole or in part, could have a material adverse effect on our business and results of operations.
Removed
For example, in connection with responding to a subpoena from the staff of the SEC, regarding a third party, we disclosed to the staff that the third party participated in a payment on our behalf to a foreign tax official that implicates the FCPA.
Added
As such, it is subject to the risk of price fluctuations and periodic delays in the delivery of component parts. The price for our component parts could increase as a result of the tariffs imposed by the new U.S. presidential administration as well as retaliatory tariffs implemented by other governments.
Removed
A number of governments or governmental bodies have introduced or are contemplating regulatory 15 Table of Contents changes in response to climate change, including regulating greenhouse gas emissions.
Added
Our suppliers of component parts, particularly in our Supply Technologies business, may continue to significantly and quickly increase their prices in response to increases in costs of the raw materials, such as steel, that they use to manufacture our component parts. We may not be able to increase our prices commensurate with our increased costs.
Added
We are also exposed to risks relating to U.S. policy with respect to companies doing business in foreign jurisdictions.

Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeOur Vice President of Information Technologies receives reports from our Information Technology Council and monitors the prevention, detection, mitigation and remediation of cybersecurity incidents. Our information technology council includes experienced information systems security professionals and information security managers.
Biggest changeThe Vice President of Technology oversees a cybersecurity team that includes experienced cybersecurity professionals with credentials such as CISSP (Certified Information Systems Security Professional), CompTIA Security+, and ISO27001. Our Vice President of Information Technology receives reports from our Information Technology Council and monitors the prevention, detection, mitigation and remediation of cybersecurity incidents.
In 2023 we did not identify any material cybersecurity incidents that have materially affected or are reasonably likely to materially affect our business strategy, results of operations or financial condition. For more information about these risks, please see Part I - Item 1A.
In 2024, we did not identify any material cybersecurity incidents that have materially affected or are reasonably likely to materially affect our business strategy, results of operations or financial condition. For more information about these risks, please see Part I - Item 1A.
“Risk Factors - We may experience breaches of, or disruptions to, our information technology systems or those of our third-party providers, or other compromises of our data, including the improper disclosure of personal or confidential data, which may adversely affect our operations and reputation.” 17 Table of Contents
“Risk Factors - We may experience breaches of, or disruptions to, our information technology systems or those of our third-party providers, or other compromises of our data, including the improper disclosure of personal or confidential data, which may adversely affect our operations and reputation.”
Our Information Technology Council, which is composed of technology leaders from each of our business units, collaborates on a cross-functional basis to identify practices that can counter threats and to monitor our cybersecurity programs and our cybersecurity incident response plans.
Our Information Technology Council includes experienced information systems security professionals and information security managers. Our Information Technology Council, which is composed of technology leaders from each of our business units, collaborates on a cross-functional basis to identify practices that can counter threats and to monitor our cybersecurity programs and our cybersecurity incident response plans.
The Board is responsible for ensuring that management has processes in place designed to identify and evaluate cybersecurity risks to which the Company is exposed and implement processes and programs to manage cybersecurity risks and mitigate cybersecurity incidents.
Our Board of Directors (“Board”) has overall oversight responsibility for our enterprise risk management framework and cybersecurity risk management. The Board is responsible for ensuring that management has processes in place designed to identify and evaluate cybersecurity risks to which the Company is exposed and implement processes and programs to manage cybersecurity risks and mitigate cybersecurity incidents.
We also have processes in place to monitor the cybersecurity practices of various third-party service providers, including certain vendors that have access to our information systems or sensitive data. • Proactive Reporting and Investigation: As part of our training initiatives, we educate certain employees depending on their role on how to report any suspicious cyber activity or potential cybersecurity issues, and we investigate reported concerns.
We also have processes in place to monitor the cybersecurity practices of various third-party service providers, including certain vendors that have access to our information systems or sensitive data. • Proactive Reporting and Investigation: As part of our training initiatives, we educate certain employees depending on their role on how to report any suspicious cyber activity or potential cybersecurity issues, and we investigate reported concerns. 16 Table of Contents Third-party security firms are used in different capacities to provide or operate some of these programs, controls, and technology systems, including cloud-based platforms and services.
Management is responsible for identifying, considering and assessing material cybersecurity risks on an ongoing basis, establishing processes to ensure that such potential cybersecurity risk exposures are monitored, putting in place appropriate mitigation measures and maintaining cybersecurity programs.
Our Vice President of Information Technology, who has more than 30-years of global information technology, systems, and IT audit experience, is responsible for identifying, considering and assessing material cybersecurity risks on an ongoing basis; establishing processes to ensure that such potential cybersecurity risk exposures are monitored; putting in place appropriate mitigation measures; and maintaining cybersecurity programs.
Removed
Third-party security firms are used in different capacities to provide or operate some of these programs, controls, and technology systems, including cloud-based platforms and services. Our Board of Directors (“Board”) has overall oversight responsibility for our enterprise risk management framework and cybersecurity risk management.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeThe following table provides information relative to our principal facilities as of December 31, 2023. 18 Table of Contents Segment (1) Location Owned or Leased Use SUPPLY Brampton, Ontario, Canada Leased Manufacturing TECHNOLOGIES Minneapolis, MN Leased Logistics Changzhou, China Leased Manufacturing Cleveland, OH Leased Supply Technologies Corporate Office Dayton, OH Leased Logistics Memphis, TN Leased Logistics Suwanee, GA Leased Logistics Streetsboro, OH Leased Manufacturing Allentown, PA Leased Logistics Carol Stream, IL Leased Logistics Solon, OH Leased Logistics Dublin, VA Leased Logistics Tulsa, OK Leased Logistics Winston-Salem, NC Leased Logistics and Office ASSEMBLY Ocala, FL Owned Manufacturing COMPONENTS Acuna, Mexico Leased Manufacturing Lexington, TN Owned Manufacturing Angola, IN Owned Manufacturing Birmingham, England Owned Manufacturing ENGINEERED Cuyahoga Heights, OH Owned Manufacturing PRODUCTS Canton, OH Owned Manufacturing Canton, OH Leased Manufacturing Newport, AR Owned Manufacturing Warren, OH Owned Manufacturing Erie, PA Owned Manufacturing La Roeulx, Belgium Owned Manufacturing Brookfield, WI Leased Manufacturing Madison Heights, MI Leased Manufacturing Leini, Italy Owned Manufacturing Pune, India Owned Manufacturing Chennai, India Owned Manufacturing Cortland, OH Owned Office and Manufacturing Valencia, Spain Owned Manufacturing (1) Each segment has other facilities, none of which is deemed to be a principal facility.
Biggest changeThe following table provides information relative to our principal facilities as of December 31, 2024. 17 Table of Contents Segment (1) Location Owned or Leased Use SUPPLY Brampton, Ontario, Canada Leased Manufacturing TECHNOLOGIES Minneapolis, MN Leased Logistics Changzhou, China Leased Manufacturing Cleveland, OH Leased Supply Technologies Corporate Office Dayton, OH Leased Logistics Memphis, TN Leased Logistics Suwanee, GA Leased Logistics Streetsboro, OH Leased Manufacturing Allentown, PA Leased Logistics Carol Stream, IL Leased Logistics Solon, OH Leased Logistics Dublin, VA Leased Logistics Tulsa, OK Leased Logistics Winston-Salem, NC Leased Logistics and Office ASSEMBLY Ocala, FL Owned Manufacturing COMPONENTS Acuna, Mexico Leased Manufacturing Lexington, TN Owned Manufacturing Angola, IN Owned Manufacturing Birmingham, England Owned Manufacturing ENGINEERED Canton, OH Owned Manufacturing PRODUCTS Canton, OH Leased Manufacturing Newport, AR Owned Manufacturing Warren, OH Owned Manufacturing Erie, PA Owned Manufacturing La Roeulx, Belgium Owned Manufacturing Brookfield, WI Leased Manufacturing Madison Heights, MI Leased Manufacturing Leini, Italy Owned Manufacturing Pune, India Owned Manufacturing Chennai, India Owned Manufacturing Cortland, OH Owned Office and Manufacturing Valencia, Spain Owned Manufacturing (1) Each segment has other facilities, none of which is deemed to be a principal facility.
Item 2. Properties As of December 31, 2023, our operations included numerous manufacturing and supply chain logistics services facilities located in 28 states in the United States and in Puerto Rico, as well as in Asia, Canada, Europe, Mexico and Brazil.
Item 2. Properties As of December 31, 2024, our operations included numerous manufacturing and supply chain logistics services facilities located in 28 states in the United States and in Puerto Rico, as well as in Asia, Canada, Europe, Mexico and Brazil.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

3 edited+1 added−3 removed7 unchanged
Biggest changeWhile any such claims, suits, investigations and proceedings involve an element of uncertainty, in the opinion of management, liabilities, if any, arising from currently pending or threatened claims, suits, investigations and proceedings are not expected to have a material adverse effect on our financial condition, liquidity or results of operations. 19 Table of Contents In addition to the routine claims, suits, investigations and proceedings noted above, we were a party to the lawsuits and legal proceedings described below as of December 31, 2023: We were a co-defendant in approximately 132 cases asserting claims on behalf of approximately 184 plaintiffs alleging personal injury as a result of exposure to asbestos.
Biggest changeWhile any such claims, suits, investigations and proceedings involve an element of uncertainty, in the opinion of management, liabilities, if any, arising from currently pending or threatened claims, suits, investigations and proceedings are not expected to have a material adverse effect on our financial condition, liquidity or results of operations.
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.
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.
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.
To the extent that any specific amount of damages is sought, the amount applies to claims against all named defendants. Historically, we have been dismissed from asbestos cases on the basis that the plaintiff incorrectly sued one of our subsidiaries or because the plaintiff failed to identify any asbestos-containing product manufactured or sold by us or our subsidiaries.
Removed
To the extent that any specific amount of damages is sought, the amount applies to claims against all named defendants. There are three asbestos cases, involving 19 plaintiffs, that plead specified damages against named defendants. In each of the three cases, the plaintiff is seeking compensatory and punitive damages based on a variety of potentially alternative causes of action.
Added
In addition to the routine claims, suits, investigations and proceedings noted above, we were a party to the lawsuits and legal proceedings described below as of December 31, 2024: 18 Table of Contents We were a co-defendant in approximately 108 cases asserting claims on behalf of approximately 152 plaintiffs alleging personal injury as a result of exposure to asbestos.
Removed
In two cases, the plaintiff has alleged three counts at $3 million compensatory and punitive damages each; one count at $3 million compensatory and $1 million punitive damages; one count at $1 million.
Removed
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.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changePeriod Total Number of Shares Purchased (1) Average Price Paid Per Share Total Number of Shares Purchased as Part of Publicly Announced Plans Maximum Number of Shares That May Yet Be Purchased Under the Plans or Program (2) October 1 — October 31, 2023 1,989 $ 18.25 — 444,424 November 1 — November 30, 2023 2,489 22.13 — 444,424 December 1 — December 31, 2023 1,140 23.13 1,217 443,207 Total 5,618 $ 20.96 1,217 443,207 (1) Consists of an aggregate total of 5,618 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 minimum withholding tax liabilities.
Biggest changePeriod Total Number of Shares Purchased (1) Average Price Paid Per Share Total Number of Shares Purchased as Part of Publicly Announced Plans Maximum Number of Shares That May Yet Be Purchased Under the Plans or Program (2) October 1 — October 31, 2024 3,698 $ 29.88 — 443,207 November 1 — November 30, 2024 426 32.28 — 443,207 December 1 — December 31, 2024 675 31.17 — 443,207 Total 4,799 $ 30.28 — 443,207 (1) Consists of an aggregate total of 4,799 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 minimum withholding tax liabilities.
Issuer Purchases of Equity Securities Set forth below is information regarding repurchases of our common stock during the fourth quarter of the year ended December 31, 2023.
Issuer Purchases of Equity Securities Set forth below is information regarding repurchases of our common stock during the fourth quarter of the year ended December 31, 2024.
Item 5. Market for the Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Our common stock, par value $1.00 per share, trades on the Nasdaq Global Select Market under the symbol “PKOH”. The number of shareholders of record of our common stock as of February 29, 2024 was 382.
Item 5. Market for the Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Our common stock, par value $1.00 per share, trades on the Nasdaq Global Select Market under the symbol “PKOH”. The number of shareholders of record of our common stock as of February 28, 2025 was 371.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

63 edited+10 added−11 removed45 unchanged
Biggest changeThe amounts below exclude discontinued operations. 2023 Compared with 2022 and 2022 Compared with 2021 2023 vs. 2022 2022 vs. 2021 2023 2022 2021 $ Change % Change $ Change % Change (Dollars in millions, except per share data) Net sales $ 1,659.7 $ 1,492.9 $ 1,277.0 $ 166.8 11 % $ 215.9 17 % Cost of sales 1,388.3 1,282.4 1,099.1 105.9 8 % 183.3 17 % Gross margin 16.4 % 14.1 % 13.9 % Selling, general and administrative ("SG&A") expenses 181.5 162.2 155.9 19.3 12 % 6.3 4 % SG&A expenses as a percentage of net sales 10.9 % 10.9 % 12.2 % Restructuring and other special charges 6.6 17.3 20.4 (10.7) (62) % (3.1) (15) % Gains on sales of assets, net (0.8) (2.4) (14.7) 1.6 * 12.3 * Operating income 84.1 33.4 16.3 50.7 152 % 17.1 105 % Other components of pension and other postretirement benefits income, net 2.5 11.1 9.7 (8.6) (77) % 1.4 14 % Interest expense, net (45.1) (33.8) (27.1) (11.3) 33 % (6.7) 25 % Income (loss) from continuing operations before income taxes 41.5 10.7 (1.1) 30.8 288 % 11.8 * Income tax (expense) benefit (8.5) 0.7 1.0 (9.2) * (0.3) 30 % Income (loss) from continuing operations 33.0 11.4 (0.1) 21.6 189 % 11.5 * Loss (income) attributable to noncontrolling interest 1.0 (1.3) 1.2 2.3 (177) % (2.5) 208 % Income from continuing operations attributable to ParkOhio common shareholders $ 34.0 $ 10.1 $ 1.1 $ 23.9 237 % $ 9.0 * Earnings (loss) from continuing operations per common share attributable to ParkOhio common shareholders: Basic: Continuing operations $ 2.76 $ 0.83 $ 0.09 $ 1.93 233 % $ 0.74 * Diluted: Continuing operations $ 2.72 $ 0.83 $ 0.09 $ 1.89 228 % $ 0.74 * * Calculation not meaningful 2023 Compared with 2022 Net Sales 23 Table of Contents Net sales increased 11% to $1,659.7 million in 2023 compared to $1,492.9 million in 2022.
Biggest changeThe amounts below exclude discontinued operations. 2024 Compared with 2023 and 2023 Compared with 2022 2024 vs. 2023 2023 vs. 2022 2024 2023 2022 $ Change % Change $ Change % Change (Dollars in millions, except per share data) Net sales $ 1,656.2 $ 1,659.7 $ 1,492.9 $ (3.5) — % $ 166.8 11 % Cost of sales 1,374.8 1,388.3 1,282.4 (13.5) (1) % 105.9 8 % Gross margin 17.0 % 16.4 % 14.1 % Selling, general and administrative ("SG&A") expenses 187.4 181.5 162.2 5.9 3 % 19.3 12 % SG&A expenses as a percentage of net sales 11.3 % 10.9 % 10.9 % Restructuring and other special charges 4.9 6.6 17.3 (1.7) (26) % (10.7) (62) % Gains on sales of assets, net (2.5) (0.8) (2.4) (1.7) * 1.6 * Other expense 5.0 — — 5.0 * — * Operating income 86.6 84.1 33.4 2.5 3 % 50.7 152 % Other components of pension and other postretirement benefits income, net 5.2 2.5 11.1 2.7 108 % (8.6) (77) % Interest expense, net (47.4) (45.1) (33.8) (2.3) 5 % (11.3) 33 % Income from continuing operations before income taxes 44.4 41.5 10.7 2.9 7 % 30.8 288 % Income tax (expense) benefit (4.9) (8.5) 0.7 3.6 (42) % (9.2) 1,314 % Income from continuing operations 39.5 33.0 11.4 6.5 20 % 21.6 189 % Loss (income) attributable to noncontrolling interest 2.7 1.0 (1.3) 1.7 170 % 2.3 177 % Income from continuing operations attributable to ParkOhio common shareholders $ 42.2 $ 34.0 $ 10.1 $ 8.2 24 % $ 23.9 237 % Earnings from continuing operations per common share attributable to ParkOhio common shareholders: Basic: Continuing operations $ 3.27 $ 2.76 $ 0.83 $ 0.51 18 % $ 1.93 233 % Diluted: Continuing operations $ 3.19 $ 2.72 $ 0.83 $ 0.47 17 % $ 1.89 228 % * Calculation not meaningful 2024 Compared with 2023 Net Sales 22 Table of Contents Net sales were $1,656.2 million in 2024 compared to $1,659.7 million in 2023, a decrease of 0.2%.
As such, we concluded that the goodwill of this reporting unit of $8.7 million was not impaired as of that date.
As such, we concluded that the goodwill of this reporting unit of $8.7 million as of that date was not impaired.
The discount rates utilized reflect market-based estimates of capital costs and discount rates adjusted for management’s assessment of a market participant’s view with respect to other risks associated with the projected cash flows of the individual reporting unit. Our estimates are based upon assumptions we believe to be reasonable, but which by nature are uncertain and unpredictable.
The WACCs utilized reflect market-based estimates of capital costs and discount rates adjusted for management’s assessment of a market participant’s view with respect to other risks associated with the projected cash flows of the individual reporting unit. Our estimates are based upon assumptions we believe to be reasonable, but which by nature are uncertain and unpredictable.
These factors that could cause actual results to differ materially from expectations include, but are not limited to, the following: our ability to realize any contingent consideration from the sale of the Aluminum Products business; the impact supply chain and logistic issues have on our business, results of operations, financial position and liquidity; our substantial indebtedness; the uncertainty of the global economic environment; general business conditions and competitive factors, including pricing pressures and product innovation; demand for our products and services; the impact of labor disturbances affecting our customers; raw material availability and pricing; fluctuations in energy costs; component part availability and pricing; changes in our relationships with customers and suppliers; the financial condition of our customers, including the impact of any bankruptcies; our ability to successfully integrate recent and future acquisitions into existing operations, including the EMA acquisition; the amounts and timing, if any, of purchases of our common stock; changes in general economic conditions such as inflation rates, interest rates, tax rates, unemployment rates, higher labor and healthcare costs, recessions and changing government policies, laws and regulations, including those related to the current global uncertainties and crises, such as tariffs and surcharges; adverse impacts to us, our suppliers and customers from acts of terrorism or hostilities, including the conflicts between Russia and Ukraine and in the Middle East, or political unrest, including the rising tension between China and the United States; public health issues, including the outbreak of infectious diseases and any impact on our facilities and operations and our customers and suppliers; our ability to meet various covenants, including financial covenants, contained in the agreements governing our indebtedness; disruptions, uncertainties or volatility in the credit markets that may limit our access to capital; potential disruption due to a partial or complete reconfiguration of the European Union; increasingly stringent domestic and foreign governmental regulations, including those affecting the environment or import and export controls and other trade barriers; inherent uncertainties involved in assessing our potential liability for environmental remediation-related activities; the outcome of pending and future litigation and other claims and disputes with customers; our dependence on the automotive and heavy-duty truck industries, which are highly cyclical; the dependence of the automotive industry on consumer spending; our ability to negotiate contracts with labor unions; our dependence on key management; our dependence on information systems; our ability to continue to pay cash dividends, and the timing and amount of any such dividends; and the other factors we describe under “Item 1A.
These factors that could cause actual results to differ materially from expectations include, but are not limited to, the following: the impact supply chain and logistic issues have on our business, results of operations, financial position and liquidity; our substantial indebtedness; the uncertainty of the global economic environment; general business conditions and competitive factors, including pricing pressures and product innovation; demand for our products and services; the impact of labor disturbances affecting our customers; raw material availability and pricing; fluctuations in energy costs; component part availability and pricing; changes in our relationships with customers and suppliers; the financial condition of our customers, including the impact of any bankruptcies; our ability to successfully integrate recent and future acquisitions into existing operations; the amounts and timing, if any, of purchases of our common stock; changes in general economic conditions such as inflation rates, interest rates, tax rates, unemployment rates, higher labor and healthcare costs, recessions and changing government policies, laws and regulations, including those related to the current global uncertainties and crises, such as tariffs and surcharges; adverse impacts to us, our suppliers and customers from acts of terrorism or hostilities, including the conflicts between Russia and Ukraine and in the Middle East, or political unrest, including the rising tension between China and the United States; public health issues, including the outbreak of infectious diseases and any impact on our facilities and operations and our customers and suppliers; our ability to meet various covenants, including financial covenants, contained in the agreements governing our indebtedness; disruptions, uncertainties or volatility in the credit markets that may limit our access to capital; potential disruption due to a partial or complete reconfiguration of the European Union; increasingly stringent domestic and foreign governmental regulations, including those affecting the environment or import and export controls and other trade barriers; inherent uncertainties involved in assessing our potential liability for environmental remediation-related activities; the outcome of pending and future litigation and other claims and disputes with customers; our dependence on the automotive and heavy-duty truck industries, which are highly cyclical; the dependence of the automotive industry on consumer spending; our ability to negotiate contracts with labor unions; our dependence on key management; our dependence on information systems; our ability to continue to pay cash dividends, and the timing and amount of any such dividends; and the other factors we describe under “Item 1A.
Such variability is particularly evident in the industrial equipment business unit included in the Engineered Products segment, which typically ships a few large systems per year. 32 Table of Contents Forward-Looking Statements This Annual Report on Form 10-K 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.
Such variability is particularly evident in the industrial equipment business unit included in the Engineered Products segment, which typically ships a few large systems per year. 31 Table of Contents Forward-Looking Statements This Annual Report on Form 10-K 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.
Discussions of 2021 items and year-over-year comparisons between 2022 and 2021 that are not included in this Annual Report on Form 10-K can be found in "Management's Discussion and Analysis of Financial Condition and Results of Operations" in Part II, Item 7 of the Company's Annual Report on Form 10-K for the year ended December 31, 2022.
Discussions of 2022 items and year-over-year comparisons between 2023 and 2022 that are not included in this Annual Report on Form 10-K can be found in "Management's Discussion and Analysis of Financial Condition and Results of Operations" in Part II, Item 7 of the Company's Annual Report on Form 10-K for the year ended December 31, 2023.
For 2023, 2022 and 2021, we performed quantitative testing for each reporting unit with a goodwill balance. Our annual goodwill impairment analysis utilizes a quantitative approach comparing the carrying amount of the reporting unit to its estimated fair value. To the extent that the carrying value of the reporting unit exceeds its estimated fair value, an impairment charge is recorded.
For 2024, 2023 and 2022, we performed quantitative testing for each reporting unit with a goodwill balance. Our annual goodwill impairment analysis utilizes a quantitative approach comparing the carrying amount of the reporting unit to its estimated fair value. To the extent that the carrying value of the reporting unit exceeds its estimated fair value, an impairment charge is recorded.
Additionally, we test all indefinite-lived intangible assets for impairment at least annually, as of October 1 of each year, or more frequently if impairment indicators arise. In 2023, 2022 and 2021, we utilized a quantitative approach using the royalty relief method.
Additionally, we test all indefinite-lived intangible assets for impairment at least annually, as of October 1 of each year, or more frequently if impairment indicators arise. In 2024, 2023 and 2022, we utilized a quantitative approach using the royalty relief method.
Based on these factors, when we have determined that the realizability of certain domestic and foreign deferred tax assets is more likely than not to not be realized, a valuation allowance has been established. 30 Table of Contents Further, at each interim reporting period, we estimate an effective income tax rate that is expected to be applicable for the full year.
Based on these factors, when we have determined that the realizability of certain domestic and foreign deferred tax assets is more likely than not to not be realized, a valuation allowance has been established. Further, at each interim reporting period, we estimate an effective income tax rate that is expected to be applicable for the full year.
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.
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, 27 Table of Contents capital requirements, contractual restrictions, business prospects and other factors that our Board of Directors may deem relevant.
As our calculated availability under the Credit Agreement was above $50.625 million, we were also in compliance with the other covenants contained in the revolving credit facility as of December 31, 2023.
As our calculated availability under the Credit Agreement was above $50.625 million, we were also in compliance with the other covenants contained in the revolving credit facility as of December 31, 2024.
The results of testing as of October 1, 2023, 2022 and 2021 for all reporting units confirmed that the estimated fair values exceeded carrying values, and no impairment existed as of those dates.
The results of testing as of October 1, 2024, 2023 and 2022 for all reporting units confirmed that the estimated fair values exceeded carrying values, and no impairment existed as of those dates.
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.
The Company does not allocate items that are non-operating; unusual in nature; or corporate costs, which include but are not limited to executive compensation and corporate office costs.
A reporting unit is an operating segment pursuant to ASC 280, “Segment Reporting”, or one level below the operating segment (component level) as determined by the availability of discrete financial information that is regularly reviewed by operating segment management. 29 Table of Contents Our reporting units have been identified at the component level.
A reporting unit is an operating segment pursuant to ASC 280, “Segment Reporting”, or one level below the operating segment (component level) as determined by the availability of discrete financial information that is regularly reviewed by operating segment management. Our reporting units have been identified at the component level.
While we expect to remain in compliance throughout 2024, declines in sales volumes in the future could adversely impact our ability to remain in compliance with certain of these financial covenants.
While we expect to remain in compliance throughout 2025, declines in sales volumes in the future could adversely impact our ability to remain in compliance with certain of these financial covenants.
For the other postretirement benefit plan, the rate is 5.06% for 2023 and 5.41% for 2022. This rate represents the interest rates generally available in the United States, which is the Company’s only country with other postretirement benefit liabilities. Another assumption that affects the Company’s pension expense is the expected long-term rate of return on assets.
For the other postretirement benefit plan, the rate is 5.43% for 2024 and 5.06% for 2023. This rate represents the interest rates generally available in the United States, which is the Company’s only country with other postretirement benefit liabilities. Another assumption that affects the Company’s pension expense is the expected long-term rate of return on assets.
Seasonality; Variability of Operating Results 31 Table of Contents 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.
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 Company’s pension plans are funded. The weighted-average expected long-term rate of return on assets assumption is 7.75% for 2023 and 2022. In determining the expected return on plan assets, we consider both historical performance and an estimate of future long-term rates of return on assets similar to those in our plan.
The Company’s pension plans are funded. The weighted-average expected long-term rate of return on assets assumption is 7.50% and 7.75% for 2024 and 2023, respectively. In determining the expected return on plan assets, we consider both historical performance and an estimate of future long-term rates of return on assets similar to those in our plan.
The discount rates are also reviewed in comparison with current benchmark indices, economic market conditions and the movement in the benchmark yield since the previous fiscal year. The liability weighted-average discount rate for the defined benefit pension plan is 5.14% for 2023, compared with 5.48% in 2022.
The discount rates are also reviewed in comparison with current benchmark indices, economic market conditions and the movement in the benchmark yield since the previous fiscal year. The liability weighted-average discount rate for the defined benefit pension plan is 5.55% for 2024, compared with 5.14% in 2023.
The results of testing as of October 1, 2023, 2022 and 2021 for all reporting units confirmed that the estimated fair value exceeded carrying values, and no impairment existed as of those dates. See Notes 7 and 8 of the consolidated financial statements included elsewhere herein for additional disclosure on goodwill and indefinite-lived intangibles.
The results of testing as of October 1, 2024, 2023 and 2022 for all reporting units confirmed that the estimated fair value exceeded carrying values, and no impairment existed as of those dates. 29 Table of Contents See Notes 7 and 8 of the consolidated financial statements included elsewhere herein for additional disclosure on goodwill and indefinite-lived intangibles.
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”).
(“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”).
Based on our 2023 annual impairment test, we determined that the fair value of our Forged and Machined Products Group reporting unit, which is included in our Engineered Products segment, exceeded its carrying value by approximately 10% using the income approach as of the testing date.
Based on our 2024 annual impairment test, we determined that the fair value of our Forged and Machined Products Group reporting unit, which is included in our Engineered Products segment, exceeded its carrying value by approximately 10% as of the testing date.
SEGMENT RESULTS 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.
SEGMENT RESULTS For purposes of measuring business segment performance, the chief operating decision maker utilizes segment operating income, which is defined as revenues less expenses identifiable to the product lines within each segment.
Financing Activities Cash used by financing activities in 2023 included debt repayments of $24.3 million, payments related to prior acquisitions of $2.9 million, dividends of $7.4 million, and payments of withholding taxes on share awards of $2.0 million.
Cash used by financing activities in 2023 included debt repayments of $24.3 million, payments related to prior acquisitions of $2.9 million, dividends to shareholders and noncontrolling interest partners totaling $7.4 million, and payments of withholding taxes on share awards of $2.0 million.
Though we consider these allowances adequate and proper, changes in economic conditions in specific markets in which we operate could have a material effect on allowances required.
Though we consider these allowances 28 Table of Contents adequate and proper, changes in economic conditions in specific markets in which we operate could have a material effect on allowances required.
If our calculated availability is less than $50.625 million, our debt service coverage ratio must be greater than 1.0. At December 31, 2023, our calculated availability under the Credit Agreement was $103.3 million; therefore, the debt service ratio covenant did not apply.
If our calculated availability is less than $50.625 million, our debt service coverage ratio must be greater than 1.0. At December 31, 2024, our calculated availability under the Credit Agreement was $133.5 million; therefore, the debt service ratio covenant did not apply.
Liquidity and Capital Resources The following table summarizes the major components of cash flows: 2023 2022 2021 Cash provided (used) by: (In millions) Operating activities $ 53.4 $ (26.6) $ (12.2) Investing activities (11.9) (40.7) (7.4) Financing activities (36.6) 84.6 60.8 Discontinued operations (9.2) (9.2) (40.8) Effect of exchange rate on cash 0.9 (4.0) (1.3) (Decrease) increase in cash and cash equivalents $ (3.4) $ 4.1 $ (0.9) Operating Activities In 2023, we generated positive operating cash flow of $53.4 million compared to a cash outflow of $26.6 million in 2022.
Liquidity and Capital Resources The following table summarizes the major components of cash flows: 2024 2023 2022 Cash provided (used) by: (In millions) Operating activities $ 35.0 $ 53.4 $ (26.6) Investing activities (30.9) (11.9) (40.7) Financing activities 1.6 (36.6) 84.6 Discontinued operations (5.2) (9.2) (9.2) Effect of exchange rate changes on cash (2.2) 0.9 (4.0) (Decrease) increase in cash and cash equivalents $ (1.7) $ (3.4) $ 4.1 Operating Activities In 2024, we generated positive operating cash flow of $35.0 million compared to $53.4 million in 2023.
Dividends The Company paid dividends to shareholders of $6.4 million during 2023. On January 26, 2024, the Company's Board of Directors declared a quarterly dividend of $0.125 per common share. The dividend was paid on February 23, 2024, to shareholders of record as of the close of business on February 9, 2024 and resulted in cash payments of $1.6 million.
Dividends The Company paid dividends to shareholders of $6.7 million during 2024. On January 24, 2025, the Company's Board of Directors declared a quarterly dividend of $0.125 per common share. The dividend was paid on February 21, 2025, to shareholders of record as of the close of business on February 7, 2025 and resulted in cash payments of $1.8 million.
Our cost of defending such lawsuits has not been material to date and, based upon available information, management does not expect our future costs for asbestos-related lawsuits to have a material adverse effect on our results of operations, liquidity or financial condition.
We have been named as one of many defendants in a number of asbestos-related personal injury lawsuits. Our cost of defending such lawsuits has not been material to date and, based upon available information, management does not expect our future costs for asbestos-related lawsuits to have a material adverse effect on our results of operations, liquidity or financial condition.
Environmental We have been identified as a potentially responsible party at third-party sites under the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended, or comparable state laws, which provide for strict and, under certain circumstances, joint and several liability. We are participating in the cost of certain clean-up efforts at several of these sites.
Environmental 30 Table of Contents We have been identified as a potentially responsible party at third-party sites under the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended, or comparable state laws, which provide for strict and, under certain circumstances, joint and several liability.
Restructuring and other special charges During 2023, the Company recorded restructuring and other special charges of $6.6 million compared to $17.3 million in 2022. The charges in both periods relate primarily to plant closure and consolidation activities, including severance, and other initiatives in the Company’s Assembly Components and Engineered Products segments.
Restructuring and other special charges During 2024, the Company recorded restructuring and other special charges of $4.9 million compared to $6.6 million in 2023. The charges in both years relate primarily to plant closure and consolidation activities and other initiatives in the Company’s Assembly Components and Engineered Products segments.
In applying the quantitative approach, we use an income approach and market multiple approach to estimate the fair value of the reporting unit. The income approach uses a number of factors, including future business plans, actual and forecasted operating results, and market data.
In applying the quantitative approach, we use the discounted cash flow method, a form of income approach, and the guideline public company method, a form of the market approach to estimate the fair value of the reporting unit. The income approach uses a number of factors, including future business plans, actual and forecasted operating results, and market data.
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.
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 September 2023, Park-Ohio amended its Seventh Amended and Restated Credit Agreement (the “Credit Agreement”).
Interest payable associated with our 6.625% Senior Notes due 2027 is $23.2 million due in the twelve months following December 31, 2023 and $53.1 million due thereafter. 28 Table of Contents As of December 31, 2023, our undiscounted purchase obligations were $229.0 million due in the next twelve months and $4.2 million due thereafter under purchase orders and "take or pay" arrangements.
Interest payable associated with our 6.625% Senior Notes due 2027 is $23.2 million due in the twelve months following December 31, 2024 and $29.9 million due thereafter. As of December 31, 2024, our undiscounted purchase obligations were $205.5 million due in the next twelve months and $3.2 million due thereafter under purchase orders and "take or pay" arrangements.
The significant assumptions employed under this method include discount rates; revenue growth rates, including assumed terminal growth rates; and operating margins used to project future cash flows for a reporting unit.
The significant assumptions employed under this method include the weighted average cost of capital (“WACC”); revenue growth rates; and operating margins used to project future cash flows for a reporting unit.
The following table summarizes our indicators of liquidity: 2023 2022 (Dollars in millions) Cash and cash equivalents $ 54.8 $ 58.2 Gross debt (excluding unamortized debt issuance costs) $ 645.7 $ 669.1 Financing arrangement with third party, net $ — $ 20.0 Working capital (excluding cash) $ 406.0 $ 425.6 Net debt as a % of capitalization 64 % 66 % Our liquidity needs are primarily for working capital and capital expenditures.
The following table summarizes our indicators of liquidity: 2024 2023 (Dollars in millions) Cash and cash equivalents $ 53.1 $ 54.8 Gross debt (excluding unamortized debt issuance costs) $ 628.7 $ 645.7 Working capital (excluding cash and cash equivalents) $ 421.8 $ 406.0 Net debt as a % of capitalization 60 % 64 % Our liquidity needs are primarily for working capital and capital expenditures.
Gains on Sales of Assets, net During 2023, in connection with the plant closure and consolidation initiatives, the Company sold real estate within its Engineered Products segment for cash proceeds of $1.4 million, resulting in a gain of $0.8 million. The Company also sold other real estate for cash proceeds of $0.6 million.
Gains on Sales of Assets, net During 2024, the Company sold real estate and other assets within its Engineered Products segment for cash proceeds of $9.3 million, resulting in a net gain of $0.8 million. The Company also sold real estate within its Assembly Components segment for cash proceeds of $2.2 million, resulting in a net gain of $1.7 million.
The total net gain of $0.8 million was recorded on a separate line in the Consolidated Statements of Operations and excluded from segment income.
The Company also sold other real estate for cash proceeds of $0.6 million. The total net gain of $0.8 million is recorded on a separate line in the Consolidated Statements of Operations and is excluded from segment income.
Engineered Products Segment Year Ended December 31, 2023 2022 2021 (Dollars in millions) Net sales $ 468.5 $ 392.6 $ 336.0 Segment operating income (loss) $ 19.1 $ 14.8 $ (12.2) Segment operating income (loss) margin 4.1 % 3.8 % (3.6) % 2023 Compared to 2022 Net sales were 19.3% higher in 2023 compared to 2022.
Engineered Products Segment Year Ended December 31, 2024 2023 2022 (Dollars in millions) Net sales $ 481.7 $ 468.5 $ 392.6 Segment operating income $ 17.7 $ 19.1 $ 14.8 Segment operating income margin 3.7 % 4.1 % 3.8 % 2024 Compared to 2023 Net sales were 2.8% higher in 2024 compared to 2023 driven by higher new capital equipment and aftermarket sales in our capital equipment business.
However, our share of such costs has not been material and based on available information, management does not expect our exposure at any of these locations to have a material adverse effect on our results of operations, liquidity or financial condition. We have been named as one of many defendants in a number of asbestos-related personal injury lawsuits.
We are participating in the cost of certain clean-up efforts at several of these sites. However, our share of such costs has not been material and based on available information, management does not expect our exposure at any of these locations to have a material adverse effect on our results of operations, liquidity or financial condition.
Supply Technologies Segment Year Ended December 31, 2023 2022 2021 (Dollars in millions) Net sales $ 763.4 $ 711.5 $ 619.5 Segment operating income $ 59.0 $ 45.7 $ 42.8 Segment operating income margin 7.7 % 6.4 % 6.9 % 2023 Compared to 2022 Net sales increased 7.3% in 2023 compared to the 2022 period due primarily to higher customer demand in many of the Company's key end markets, with the largest increases in the power sports, heavy-duty truck, and commercial aerospace, and increased demand for our proprietary fastener products.
Supply Technologies Segment Year Ended December 31, 2024 2023 2022 (Dollars in millions) Net sales $ 775.8 $ 763.4 $ 711.5 Segment operating income $ 75.0 $ 59.0 $ 45.7 Segment operating income margin 9.7 % 7.7 % 6.4 % 2024 Compared to 2023 Net sales increased 1.6% in 2024 compared to 2023 due to continued strong demand in many of the Company's key end markets, with the largest increases in the aerospace and defense, heavy-duty truck, electrical distribution and consumer electronics end markets, partially offset by decreases in the power sports and industrial and agricultural equipment end markets.
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. The Company assumes no obligation to update the information in this Annual Report on Form 10-K, except to the extent required by law. 33 Table of Contents
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. 32 Table of Contents
Segment operating income reconciles to consolidated income before income taxes by deducting corporate costs; certain non-cash and/or non-operating items; other components of pension and OPEB income, net; and interest expense, net.
Segment operating income reconciles to consolidated income before income taxes by adjusting for corporate costs; gains on sales of assets; other expenses; other components of pension and other postretirement benefits income, net; and interest expense, net.
The Company had cash and cash equivalents held by foreign subsidiaries of $44.6 million at December 31, 2023 and $47.8 million at December 31, 2022. 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.
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. Senior Notes In April 2017, Park-Ohio Industries, Inc.
The cash purchase price for the acquisition was approximately $14 million. 22 Table of Contents RESULTS FROM CONTINUING OPERATIONS This section of this Annual Report on Form 10-K generally discusses 2023 and 2022 items and year-to-year comparisons between 2023 and 2022.
The dividend was paid on February 21, 2025, to shareholders of record as of the close of business on February 7, 2025 and resulted in cash payments of $1.8 million. 21 Table of Contents RESULTS FROM CONTINUING OPERATIONS This section of this Annual Report on Form 10-K generally discusses 2024 and 2023 items and year-to-year comparisons between 2024 and 2023.
During 2022, in connection with its plant closure and consolidation initiatives, the Company sold assets within its Supply Technologies segment for cash proceeds of $1.5 million, resulting in a loss of $3.4 million; within its Assembly Components segment for cash proceeds of $4.4 million, resulting in a gain of $3.3 million; and within its Engineered Products segment for cash proceeds of $3.6 million, resulting in a gain of $2.5 million.
The total net gain of $2.5 million is recorded on a separate line in the Consolidated Statements of Operations and is excluded from segment income. During 2023, in connection with its plant closure and consolidation initiatives, the Company sold real estate within its Engineered Products segment for cash proceeds of $1.4 million, resulting in a net gain of $0.8 million.
These capital expenditures were primarily for growth initiatives, with the majority in our Assembly Components and Engineered Products segments; for facility consolidation in Engineered Products segment; and to maintain existing operations. In 2023 and 2022, we sold assets and received aggregate proceeds of $2.0 million and $9.5 million, respectively.
These capital expenditures were primarily for growth initiatives, including information technology investments, across all three of our segments, and to maintain existing operations. In 2024 and 2023, we sold assets and received aggregate proceeds of $11.5 million and $2.0 million, respectively. See Note 5 to the consolidated financial statements included elsewhere herein for additional information.
The decrease in 2023 was due to lower returns on plan assets impacting 2023 compared to 2022. Interest Expense, Net Interest expense, net increased to $45.1 million in 2023 compared to $33.8 million in 2022. The increase was due to higher average interest rates and higher average outstanding borrowings in 2023 compared to 2022.
Interest Expense, Net Interest expense, net increased to $47.4 million in 2024 compared to $45.1 million in 2023. The increase was due to higher average interest rates partially offset by lower average outstanding borrowings in 2024 compared to 2023. Our average effective borrowing rate was 7.0% in 2024 compared to 6.6% in 2023.
As of December 31, 2023, we had $263.5 million outstanding under the revolving credit facility, and total liquidity of $166.0 million, which included cash and cash equivalents of $54.8 million and $111.2 million of unused borrowing availability.
As of December 31, 2024, we had $248.6 million outstanding under the revolving credit facility, and total liquidity of $198.2 million, which included cash and cash equivalents of $53.1 million and $145.1 million of unused borrowing availability under our credit arrangements. 26 Table of Contents The Company had cash and cash equivalents held by foreign subsidiaries of $43.4 million at December 31, 2024 and $44.6 million at December 31, 2023.
Credit Agreement 27 Table of Contents On September 13, 2023, Park-Ohio amended its Eighth Amended and Restated Credit Agreement (the “Credit Agreement”). The Credit Agreement provides for a revolving credit facility in the amount of $405.0 million, including a $40.0 million Canadian revolving subcommitment and a European revolving subcommitment in the amount of $30.0 million.
The Credit Agreement provides for a revolving credit facility in the amount of $405.0 million, including a $40.0 million Canadian revolving subcommitment and a European revolving subcommitment in the amount of $30.0 million. Pursuant to the Credit Agreement, Park-Ohio has the option to increase the availability under the revolving credit facility by an aggregate incremental amount up to $70.0 million.
This increase was primarily due to higher customer demand in all three of our business segments and increased product pricing. The factors explaining the changes in segment net sales for the year ended December 31, 2023 compared to the year ended December 31, 2022 are contained in the “Segment Results” section below.
The factors explaining the changes in segment net sales for the year ended December 31, 2024 compared to the year ended December 31, 2023 are contained in the “Segment Results” section below. Cost of Sales and Gross Margin Cost of sales decreased 1% to $1,374.8 million in 2024 compared to $1,388.3 million in 2023.
Our average effective borrowing rate was 6.6% in 2023 compared to 5.1% in 2022. Income Tax Expense/Benefit 24 Table of Contents Income tax expense in 2023 was $8.5 million on pre-tax income of $41.5 million, for an effective tax rate of 20.5%, which approximated the U.S. statutory rate.
Income tax expense in 2023 was $8.5 million on pre-tax income of $41.5 million, for an effective tax rate of 20.5%, which approximated the U.S. statutory rate of 21%, as the tax benefits of the foreign tax credit and research and development tax credit were offset by the tax expense of foreign earnings, GILTI and non-deductible expenses.
Assembly Components Segment Year Ended December 31, 2023 2022 2021 (Dollars in millions) Net sales $ 427.8 $ 388.8 $ 321.5 Segment operating income (loss) $ 33.4 $ 1.1 $ (2.6) Segment operating income (loss) margin 7.8 % 0.3 % (0.8) % 2023 Compared to 2022 Net sales increased 10.0% in 2023 compared to 2022.
Assembly Components Segment Year Ended December 31, 2024 2023 2022 (Dollars in millions) Net sales $ 398.7 $ 427.8 $ 388.8 Segment operating income $ 25.4 $ 33.4 $ 1.1 Segment operating income margin 6.4 % 7.8 % 0.3 % 2024 Compared to 2023 24 Table of Contents Net sales decreased 6.8% in 2024 compared to 2023 due primarily to lower product pricing on certain legacy programs and lower unit volumes primarily on end-of-life programs, partially offset by higher product pricing on certain other programs.
Pursuant to the Credit Agreement, Park-Ohio has the option to increase the availability under the revolving credit facility by an aggregate incremental amount up to $70.0 million. The Credit Agreement matures on January 14, 2027. Finance Leases As of December 31, 2023, the Company had finance leases totaling $16.3 million.
The Credit Agreement matures on January 14, 2027. Finance Leases As of December 31, 2024, the Company had finance leases totaling $17.0 million.
The total net gain of $2.4 million was recorded on a separate line in the Consolidated Statements of Operations and excluded from segment income. Other Components of Pension and Other Postretirement Benefits (“OPEB”) income, Net Other components of pension and OPEB income, net was $2.5 million in 2023 compared to $11.1 million in 2022.
Other Components of Pension and Other Postretirement Benefits (“OPEB”) I ncome, Net Other components of pension and OPEB income, net was $5.2 million in 2024 compared to $2.5 million in 2023. The increase in 2024 was due to lower net actuarial losses impacting 2024 compared to 2023.
See Note 9 to the consolidated financial statements included elsewhere herein for further discussion of our financing arrangements.
Liquidity Overall, we were able to pay down debt and fund capital expenditures in 2024 using cash flows from operations, cash proceeds from asset sales and proceeds from common stock issuances. See Note 9 to the consolidated financial statements included elsewhere herein for further discussion of our financing arrangements.
Gross margin was 16.4% in 2023 compared to 14.1% in 2022, driven by profit flow-through from the higher sales levels and the impact of our profit-enhancement initiatives, including increased product pricing. SG&A Expenses SG&A expenses increased to $181.5 million, or 10.9% of net sales, in 2023 from $162.2 million, or 10.9% of net sales, in 2022.
SG&A Expenses SG&A expenses increased to $187.4 million, or 11.3% of net sales, in 2024 from $181.5 million, or 10.9% of net sales, in 2023. The SG&A expense increase was driven by SG&A expenses in our acquired EMA Indutec GmbH (“EMA”) business, ongoing inflation and higher employee costs.
These factors partially offset by lower margins in our forged and machined products business. In addition, restructuring and other special charges were $4.9 million in 2023 and $8.4 million in 2022.
In addition, restructuring and other special charges were $3.6 million in 2024 and $4.9 million in 2023.
Segment operating income increased $13.3 million to $59.0 million in 2023 compared to 2022, and segment operating income margin increased 130 basis points in 2023 compared to a year ago. These increases were driven by the higher sales levels and the impact of profit-enhancement actions, including increased product pricing.
Segment operating income was $25.4 million in 2024 compared to $33.4 million in 2023 and segment operating income margin decreased 140 basis points in 2024 compared to a year ago. The decreases were due to the lower product pricing and unit volumes, which were partially offset by profit enhancement initiatives in 2024.
See Note 5 to the consolidated financial statements included elsewhere herein for additional information. Additionally, we received $15.5 26 Table of Contents million in relation to the sale of our Aluminum Products business, and we spent $1.2 million in the aggregate in 2023 for acquisitions, of which $0.5 million related to the 2022 acquisition of Southern Fasteners & Supply, Inc.
We spent $11.0 million for the acquisition of EMA. Additionally, in 2023, we received $15.5 million in connection with the sale of our Aluminum Products business.
Cash provided by financing activities in 2022 included debt borrowings of $73.2 million, proceeds from a third-party financing arrangement of $20.0 million in connection with the entry into the memorandum of understanding in connection with the sale of our Aluminum Products business, dividends of $7.0 million, and payments of withholding taxes on share awards of $1.6 million.
Financing Activities Cash provided by financing activities in 2024 included debt repayments of $16.0 million, payments related to prior acquisitions of $3.0 million, dividends to shareholders and noncontrolling interest partners totaling $7.2 million, and payments of withholding taxes on share awards of $2.6 million.
The positive cash flow in 2023 was driven by higher income from continuing operations in 2023 and improvement in working capital in 2023. Investing Activities Capital expenditures were $28.2 million in 2023 and $26.9 million in 2022.
Cash flow from operating activities was lower in 2024 due to higher working capital needs, which more than offset higher profitability in 2024. Investing Activities 25 Table of Contents Capital expenditures were $31.4 million in 2024 and $28.2 million in 2023.
The increase was driven by strong backlogs at the start of the year and higher customer demand in both our capital equipment business and our forged and machined products business. Segment operating income in 2023 increased $4.3 million, as profit flow-through from higher sales levels and implemented operational improvement initiatives contributed to higher profit and margins in this business.
Segment operating income in 2024 decreased $1.4 million compared to 2023, and segment operating margin decreased 40 basis points in 2024 compared to 2023, as a result of higher operating costs in our forged and machined products business, partially offset by the higher sales and improved margins in our capital equipment business.
Removed
Sale of Aluminum Products On December 29, 2023, the Company completed the sale of its Aluminum Products business to Angstrom Automotive Group (“Angstrom”) for up to $50.5 million in cash and promissory notes, plus the assumption of approximately $3 million of finance lease obligations.
Added
On December 29, 2023, the Company completed the sale to Angstrom Automotive Group (“Angstrom”) of its Aluminum Products business, which has been classified as a discontinued operation for all periods presented. Subsequent Events On January 24, 2025, the Company's Board of Directors declared a quarterly dividend of $0.125 per common share.
Removed
The total purchase price consisted of a cash down payment of $20.0 million paid to the Company in December 2022; cash of $15.5 million paid to the Company at closing; and promissory notes totaling $15.0 million payable to the Company on December 31, 2024, of which $10.0 million is contingent on the Aluminum Products business attaining certain purchase commitments during 2024.
Added
The decrease was primarily due to lower sales in the Assembly Components segment, partially offset by higher sales in our Supply Technologies segment and in the capital equipment business in our Engineered Products segment.
Removed
Subsequent Events On January 26, 2024, the Company's Board of Directors declared a quarterly dividend of $0.125 per common share. The dividend was paid on February 23, 2024, to shareholders of record as of the close of business on February 9, 2024 and resulted in cash payments of $1.6 million.
Added
The decrease was driven by ongoing profit improvement initiatives and the decrease in net sales described above. Gross margin was 17.0% in 2024 compared to 16.4% in 2023. The gross margin improvement was driven by improved operating profit in our Supply Technologies segment; higher sales and improved margins in our capital equipment business; and ongoing profit improvement initiatives.
Removed
Effective February 29, 2024, the Company acquired all of the outstanding shares of EMA Indutec GmbH (“EMA”), headquartered in Meckesheim, Germany, from the Aichelin Group, headquartered in Modling, Austria. EMA, a leading manufacturer of induction heating equipment and converters, operates through its two locations in Meckesheim, Germany and Beijing, China.
Added
Income Tax Expense 23 Table of Contents Income tax expense in 2024 was $4.9 million on pre-tax income of $44.4 million, for an effective tax rate of 11.0%, which was less than the U.S. statutory rate of 21%, primarily as a result of the tax benefit of the research and development tax credit and the release of certain valuation allowances.
Removed
The acquisition strengthens our global induction heating expertise throughout Europe and expands our portfolio of induction equipment brands and our aftermarket service capabilities.
Added
In addition, net sales benefited from higher customer demand for our proprietary products throughout North America and Europe in our fastener manufacturing business. Segment operating income increased $16.0 million to $75.0 million in 2024 compared to 2023, and segment operating income margin increased 200 basis points in 2024 compared to a year ago.
Removed
Cost of Sales and Gross Margin Cost of sales increased 8% to $1,388.3 million in 2023 compared to $1,282.4 million in 2022. The increase in cost of sales was due to the increase in net sales described above.
Added
These increases were due primarily to the increase in sales, profit improvement initiatives and higher profit flow-through from strong demand in our fastener manufacturing business.
Removed
The SG&A expense increase was driven by higher selling expenses as a result of higher sales levels; higher costs due to ongoing inflation; and higher employee costs. As a percentage of net sales, SG&A expenses were comparable year-over-year.
Added
During 2024 and 2023, we incurred $1.1 million and $1.5 million, respectively, of charges related to restructuring activities.
Removed
The tax benefits of the foreign tax credit and research and development tax credit were offset by the tax expense of foreign earnings, global intangible low-taxed income and non-deductible expenses. Income tax benefit in 2022 was $0.7 million on pre-tax income of $10.7 million, driven by changes in estimates related to prior year federal research and development credits.
Added
On June 3, 2024, the Company entered into an agreement providing for an at-the-market (“ATM”) program authorizing the sale of up to $50.0 million of the Company's common stock. During the year ended December 31, 2024, the Company sold 550,981 shares of common stock for aggregate net proceeds of $15.9 million under the ATM program.
Removed
The sales increase was driven by increased product pricing and new programs implemented during the year. Segment operating income was $33.4 million in 2023 compared to $1.1 million in 2022.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeOur largest exposures to commodity prices relate to metal, rubber compound and natural gas prices, which have fluctuated widely in recent years. We have no commodity swap agreements or forward purchase contracts. 34 Table of Contents
Biggest changeOur largest exposures to commodity prices relate to metal and rubber compounds, which have fluctuated widely in recent years. In 2024 and 2023, we entered into agreements to hedge foreign currency. These agreements did not have a material impact on the results of the Company. We have no other commodity swap agreements or forward purchase contracts. 33 Table of Contents
A 100-basis point increase in the interest rate would have resulted in an increase in interest expense on these borrowings of approximately $2.6 million for the year ended December 31, 2023. We are exposed to changes in foreign currency exchange rates. Our foreign subsidiaries generally conduct business in local currencies.
A 100-basis point increase in the interest rate would have resulted in an increase in interest expense on these borrowings of approximately $2.5 million for the year ended December 31, 2024. We are exposed to changes in foreign currency exchange rates. Our foreign subsidiaries generally conduct business in local currencies.
Item 7A. Quantitative and Qualitative Disclosures About Market Risk We are exposed to market risk, including changes in interest rates. As of December 31, 2023, we are subject to interest rate risk on borrowings under the floating rate revolving credit facility provided by our Credit Agreement, which consisted of borrowings of $263.5 million at December 31, 2023.
Item 7A. Quantitative and Qualitative Disclosures About Market Risk We are exposed to market risk, including changes in interest rates. As of December 31, 2024, we are subject to interest rate risk on borrowings under the floating rate revolving credit facility provided by our Credit Agreement, which consisted of borrowings of $248.6 million at December 31, 2024.

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