On November 1, 2023, Park-Ohio Holdings Corp (PKOH, Financial) released its earnings report for the third quarter of 2023. The company reported a 9% increase in net sales from $384 million in Q3 2022 to $419 million in Q3 2023. The GAAP EPS from continuing operations also saw a significant increase of 71% year-over-year, reaching $0.99 per diluted share. The gross margin from continuing operations improved by 300 basis points year-over-year to 16.7%.
Financial Highlights
Operating income from continuing operations improved to $27 million from $12 million in Q3 2022, while adjusted operating income from continuing operations improved 70% to $27 million from $16 million year-over-year. EBITDA from continuing operations improved 29% year-over-year to $39 million. The operating cash flow was $23 million, and free cash flow was $17 million.
Matthew V. Crawford, Chairman, Chief Executive Officer, and President, stated,
“Strong financial performance during the third quarter was a tribute to our diversified business model and our commitment to both commercial and operational improvements. I would draw particular attention to our improvement in gross margins and our free cash flow during the quarter."
Segment Results
In the Supply Technologies segment, net sales in Q3 2023 were $192.8 million, a 4% increase compared to Q3 2022. The Assembly Components segment saw net sales of $108.4 million, up 7% compared to Q3 2022. The Engineered Products segment reported net sales of $117.6 million in Q3 2023, up 21% compared to Q3 2022.
Year-to-Date Consolidated Results
In the nine months ended September 30, 2023, net sales from continuing operations were a record $1.3 billion compared to $1.1 billion in the 2022 period, an increase of 14%. Gross margin in the nine months ended September 30, 2023, was 16.3%, an increase of 240 basis points compared to 13.9% in the period in 2022.
Liquidity and Cash Flow
As of September 30, 2023, the company's total liquidity was $174.9 million, which included cash on hand of $51.2 million and $123.7 million of unused borrowing availability under its credit arrangements. During the third quarter of 2023, operating cash flow from continuing operations was $23.4 million and free cash flow totaled $16.6 million.
2023 Outlook
For 2023, Park-Ohio Holdings Corp (PKOH, Financial) continues to expect revenues from continuing operations to increase 10-15% year-over-year and expects year-over-year improvement in adjusted operating income, EBITDA, free cash flow, and adjusted EPS.
Explore the complete 8-K earnings release (here) from Park-Ohio Holdings Corp for further details.
