Park-Ohio Holdings Corp. announced its second-quarter 2025 results, reporting net sales of $400.1 million, a decrease from $432.6 million in the prior year period, primarily due to lower demand across all three business segments. Despite the sales decline, the company demonstrated operational discipline, with gross margin improving to 17.0% in Q2 2025, up from 16.9% in Q2 2024. This indicates effective cost management.
Adjusted EPS for Q2 2025 increased 14% sequentially from Q1 2025, reaching $0.75 per diluted share. EBITDA also increased 4% sequentially to $35 million, reflecting continued operational improvements. This sequential growth demonstrates operational discipline despite overall sales headwinds.
The Engineered Products segment achieved an all-time quarterly high in capital equipment orders, totaling $85 million, including a significant $47 million order for induction slab heating equipment. This pushed the segment's capital equipment backlog to a robust $172 million, a 19% increase from year-end 2024. This strong backlog provides multi-quarter revenue visibility.
The company successfully completed the refinancing of its $350.0 million senior secured notes due 2030 on July 31, 2025, at an 8.50% interest rate, using the proceeds to redeem its outstanding 6.625% Senior Notes due 2027. Additionally, the revolving credit facility was extended by five years on July 17, 2025. These actions provide extended maturities and enhanced liquidity.
For the full year 2025, Park-Ohio updated its guidance, projecting adjusted EPS in the range of $2.90 to $3.20 per diluted share, with net sales expected between $1.62 billion and $1.65 billion. The effective tax rate has been lowered to 17%-19% for the full year, benefiting from federal R&D tax credits and other planning initiatives.
Management noted that the higher interest costs from the recent refinancing are expected to reduce adjusted EPS by approximately $0.20 per diluted share in the second half of the year. The company also anticipates $25 million to $35 million in tariff-related costs, primarily in Supply Technologies, but expects to fully mitigate these through customer and supplier collaborations.
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