Park Ohio Holdings Corp (PKOH) 2022 Q4 法說會逐字稿

Good morning. Welcome to ParkOhio Fourth Quarter and Full Year 2020 Results conference call. (Operator Instructions) Today's conference is also being recorded. If you have any objections, you may disconnect at this time. Before we get started, I want to remind everyone that certain statements made on today's call may be forward-looking statements as defined in the Private Securities and Litigation Reform Act of 1995. These forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially from those projected. A list of relevant risks and uncertainties may be found in the earnings press release as well as the company's 2021 10-K, which was filed on March 16, 2022, with the SEC.

早上好。歡迎參加 ParkOhio 第四季度和 2020 年全年業績電話會議。 （操作員說明）今天的會議也正在錄製中。如果您有異議，此時您可以斷開連接。在我們開始之前，我想提醒大家，在今天的電話會議上做出的某些陳述可能是 1995 年《私人證券和訴訟改革法案》中定義的前瞻性陳述。這些前瞻性陳述受風險和不確定性的影響，這些風險和不確定性可能會導致實際結果與預期結果存在重大差異。相關風險和不確定性的列表可以在收益新聞稿以及公司於 2022 年 3 月 16 日向美國證券交易委員會提交的 2021 年 10-K 中找到。

Additionally, the company may discuss adjusted EPS, adjusted operating income and EBITDA as defined on the continuing operations or consolidated basis. These metrics are not measures of performance under generally accepted accounting principles. For a reconciliation of EPS to adjusted EPS, operated income to adjusted operating income and net income attributed to Park Ohio's common shareholders to EBITDA as defined, please refer to the company's recent earnings release. I will now turn the conference over to Mr. Matthew Crawford, Chairman, President and CEO. Please proceed, Mr. Crawford.

此外，公司可能會討論在持續經營或合併基礎上定義的調整後每股收益、調整後營業收入和 EBITDA。這些指標不是普遍接受的會計原則下的績效衡量標準。有關每股收益與調整後每股收益、營業收入與調整後營業收入以及歸屬於 Park Ohio 普通股股東的淨收入與所定義的 EBITDA 的對賬，請參閱公司最近的收益發布。我現在將會議轉交給主席、總裁兼首席執行官 Matthew Crawford 先生。請繼續，克勞福德先生。

Thank you, and good morning. We're proud of our accomplishments during 2022. Revenue growth from continuing operations of 17% helped us achieve record annual sales and improved operating profit across all 3 business segments. As we enter 2023, our markets continue to be robust, and we expect to achieve increased margins and profitability versus 2022 as well as a substantially improved balance sheet. This, after 3 years of battling inflation, supply chain and a myriad of other challenges. While our job is never complete, I want to highlight the incredible effort of our entire team in both restructuring much of our business as it relates to our cost structure and also the ongoing efforts to achieve commercial terms, which address the substantial inflation in the marketplace. These efforts continue, but much of the heavy lifting is now complete. Notably, during the year, we allocated approximately $27 million in capital to many of our most promising products and services, which will ensure future growth at accretive margins.

謝謝，早上好。我們為 2022 年取得的成就感到自豪。持續經營帶來的收入增長 17% 幫助我們實現了創紀錄的年銷售額，並提高了所有 3 個業務部門的營業利潤。進入 2023 年，我們的市場繼續保持強勁，我們預計利潤率和盈利能力將比 2022 年有所提高，資產負債表也會大幅改善。這是在與通貨膨脹、供應鍊和無數其他挑戰作鬥爭 3 年之後。雖然我們的工作永遠不會完成，但我想強調我們整個團隊在重組與我們的成本結構相關的大部分業務方面所做的不可思議的努力，以及為實現商業條款所做的持續努力，這解決了市場上的大幅通貨膨脹問題.這些努力仍在繼續，但大部分繁重的工作現在已經完成。值得注意的是，在這一年中，我們為我們許多最有前途的產品和服務分配了大約 2700 萬美元的資金，這將確保未來以增加的利潤率增長。

Here, I would highlight improved large forging capabilities, increased capacity for highly engineered fasteners and expanded capacity in our rubber business. In addition, we added 2 small but strategic and accretive acquisitions to Supply Technologies, which will both add new capabilities and customers. Challenges still remain, in particular, attracting and retaining skilled associates to the business during this period continues to be a challenge. But we have seen some modest stabilization and have begun to see the benefits of reduced overtime and other inefficiencies. We're also announcing the potential sale of our aluminum products business.

在這裡，我要強調提高大型鍛造能力、提高高度工程緊固件的能力以及擴大我們橡膠業務的能力。此外，我們還對 Supply Technologies 進行了 2 次小型但具有戰略意義和增值性的收購，這都將增加新的能力和客戶。挑戰仍然存在，特別是在此期間吸引和留住熟練的員工加入企業仍然是一個挑戰。但我們已經看到一些適度的穩定，並開始看到減少加班和其他低效率的好處。我們還宣布可能出售我們的鋁產品業務。

This was a difficult decision, given the substantial opportunities in front of them, largely due to lightweighting, electrification and reshoring, which has begun to occur meaningfully within the auto industry. While the business has struggled to be profitable since the beginning of COVID, our investments there have caused it to "turn the corner", and we have seen improved and stabilized performance recently. Despite these positives, we've chosen to invest in other opportunities in our business, which are demonstrating impressive growth opportunities.

這是一個艱難的決定，因為他們面前有大量機會，主要是由於輕量化、電氣化和回流，這些已經開始在汽車行業內有意義地發生。雖然自 COVID 開始以來該業務一直難以盈利，但我們在那裡的投資使其“轉危為安”，並且我們最近看到業績有所改善和穩定。儘管有這些積極因素，我們還是選擇投資於我們業務中的其他機會，這些機會顯示出令人印象深刻的增長機會。

As we look into 2023 and beyond, we're particularly excited about a few trends we're seeing in our business. First, even as consumer demand may dampen due to increased cost and availability of credit, many of our customers desperately need to restock their supply chain or improve their manufacturing capacity or productivity as evidenced by large backlogs in our Engineered Products group. Second, we've seen evidence of reshoring by many of our customers. While this has been a storyline for years, we have recently received orders intended by our customers to reduce their reliance on foreign suppliers. Third, the green energy transition has benefited our European business during the last 18 months meaningfully.

展望 2023 年及以後，我們對我們在業務中看到的一些趨勢感到特別興奮。首先，即使由於成本增加和信貸可用性可能會抑制消費者需求，我們的許多客戶也迫切需要補充他們的供應鍊或提高他們的製造能力或生產力，我們的工程產品部門的大量積壓就是證明。其次，我們已經看到許多客戶回流的證據。雖然多年來這一直是故事情節，但我們最近收到了客戶的訂單，旨在減少他們對外國供應商的依賴。第三，在過去的 18 個月裡，綠色能源轉型使我們的歐洲業務受益匪淺。

We anticipate whether it's electric cars, wind energy or electric furnace technology, we will continue to benefit globally. Lastly, improved government spending and infrastructure and defense will accelerate the need for capacity in many basic industries like forging and steelmaking, which are areas where we will benefit. While we've had a challenging couple of years, we're pleased with the progress we're making and want to thank all of our team, including the many new and talented people that have joined our firm recently and are making a big difference. With that, I'll turn it over to Pat.

我們預計，無論是電動汽車、風能還是電爐技術，我們都將繼續在全球範圍內受益。最後，政府支出、基礎設施和國防的改善將加速鍛造和煉鋼等許多基礎行業對產能的需求，這些都是我們將從中受益的領域。雖然我們經歷了充滿挑戰的幾年，但我們對取得的進展感到高興，並感謝我們所有的團隊，包括最近加入我們公司並發揮重大作用的許多新人和有才華的人.有了這個，我會把它交給帕特。

Thank you, Matt. During 2022, we were able to achieve significant year-over-year improvement in sales and operating income in the majority of our businesses despite inflationary and supply chain challenges and believe we are positioned for further sales growth and improved earnings in 2023. And Key highlights in 2022 included the following: first, we achieved record consolidated net sales from continuing operations of $1.5 billion, up 17% year-over-year, driven by growth in all 3 of our business segments. Excluding discontinued operations, our full year adjusted EPS was $1.76, an increase of more than 300% compared to adjusted EPS of $0.42 in 2021. We implemented significant customer price increases throughout the year to offset product inflation and higher operating costs in every business.

謝謝你，馬特。在 2022 年期間，儘管存在通貨膨脹和供應鏈挑戰，但我們的大部分業務的銷售和營業收入都實現了同比顯著增長，並且相信我們有能力在 2023 年實現進一步的銷售增長和收益改善。和主要亮點2022 年包括以下內容：首先，在我們所有 3 個業務部門的增長推動下，我們實現了創紀錄的持續經營綜合淨銷售額 15 億美元，同比增長 17%。不包括已終止的業務，我們全年調整後的每股收益為 1.76 美元，與 2021 年調整後的每股收益 0.42 美元相比增長了 300% 以上。我們全年大幅提高客戶價格，以抵消產品通脹和每項業務更高的運營成本。

We expect these actions will improve operating margins in the current year. We substantially completed our facility consolidation activities in our Assembly Components and Engineered Products segments, which impacted 4 manufacturing plants. We also started up a new rubber mixing facility and relocated several product lines and related operating assets, including a 50,000-pound forging Hammer, which is now installed in our Canton Drop Forge facility. We expect these actions will also contribute to improved operating margins in 2023. In connection with the consolidation activities, we sold real estate and other assets during the year for cash proceeds of $10 million. Over the past 2 years combined, cash proceeds from our asset sales totaled $30 million, resulting in gains of $17 million.

我們預計這些行動將提高本年度的營業利潤率。我們基本上完成了裝配組件和工程產品部門的設施整合活動，這影響了 4 家製造廠。我們還啟動了一個新的橡膠混合設施，並搬遷了多條產品線和相關運營資產，包括一個 50,000 磅的鍛錘，現在安裝在我們的 Canton Drop Forge 設施中。我們預計這些行動也將有助於提高 2023 年的營業利潤率。在整合活動方面，我們在這一年出售了房地產和其他資產，獲得 1000 萬美元的現金收益。在過去 2 年中，我們資產出售的現金收益總計 3000 萬美元，收益為 1700 萬美元。

We completed 2 strategic acquisitions in our Supply Technologies segment in support of our initiative to expand our industrial supply and MRO business and to accelerate the global growth of our proprietary self-piercing and clinch products in our fastener manufacturing business. And finally, during the fourth quarter, we made the strategic decision to exit our aluminum products business and on December 30, we signed a memorandum of understanding with a third party to acquire the business. Pursuant to the MOU, we received $20 million in a promissory note in the amount of $25 million representing a portion of the final sales price. The sale of the business is subject to various conditions, including the final execution of a purchase agreement.

我們在供應技術部門完成了 2 項戰略收購，以支持我們擴大工業供應和 MRO 業務的舉措，並加速我們在緊固件製造業務中專有的自沖孔和鉚接產品的全球增長。最後，在第四季度，我們做出了退出鋁產品業務的戰略決策，並於 12 月 30 日與第三方簽署了收購該業務的諒解備忘錄。根據諒解備忘錄，我們收到了 2000 萬美元的期票，金額為 2500 萬美元，代表最終銷售價格的一部分。業務的出售取決於各種條件，包括購買協議的最終執行。

Now I'll review our full year and fourth quarter 2022 results in detail. Consolidated net sales from continuing operations in 2022 were $1.5 billion, up 17% compared to $1.3 billion a year ago, with higher year-over-year sales in all 3 of our business segments. We estimate that 70% of the overall increase was driven by volume growth from higher customer demand and new programs, while the remaining 30% was due to the impact of customer price increases achieved during the year. GAAP EPS for the year was $0.83 per diluted share, adjusted earnings per share, which excludes primarily onetime nonrecurring items related to plant closure and consolidation costs improved significantly year-over-year to $1.76 per share compared to adjusted EPS in 2021 of $0.42 per share.

現在，我將詳細回顧我們 2022 年全年和第四季度的業績。 2022 年來自持續經營業務的綜合淨銷售額為 15 億美元，比一年前的 13 億美元增長 17%，我們所有 3 個業務部門的銷售額均同比增長。我們估計，總體增長的 70% 是由更高的客戶需求和新計劃帶來的銷量增長推動的，而其餘 30% 是由於年內實現的客戶價格上漲的影響。當年 GAAP 每股攤薄後每股收益為 0.83 美元，調整後每股收益（主要不包括與工廠關閉和整合成本相關的一次性非經常性項目）同比顯著提高至每股 1.76 美元，而 2021 年調整後每股收益為 0.42 美元.

Excluding plant closure costs, 2022 adjusted gross margin was 14.1%, and compared to 13.9% in 2021. SG&A expenses were higher in 2022 due primarily to the higher sales levels, higher employee-related costs and unfavorable foreign currency exchange impacts. Our 2022 adjusted operating income was $48 million or 3.2% of sales compared to $22 million or 1.7% of sales in 2021. Significant improvement in operating income was delivered in each business segment, most notably in our Engineered Products segment, which improved year-over-year by $22 million. Interest expense was $34 million compared to $27 million in 2021 with the increase due to higher interest rates and higher outstanding borrowings in 2022. These amounts exclude approximately $2.5 million in each year that has been allocated to discontinued operations. Our full year income tax provision was a benefit of $700,000 on a GAAP pretax income of $10.7 million.

不包括工廠關閉成本，2022 年調整後的毛利率為 14.1%，而 2021 年為 13.9%。2022 年的 SG&A 費用較高，主要原因是銷售水平較高、員工相關成本較高以及不利的外匯影響。我們 2022 年調整後的營業收入為 4800 萬美元，佔銷售額的 3.2%，而 2021 年為 2200 萬美元，佔銷售額的 1.7%。每個業務部門的營業收入都有顯著改善，尤其是我們的工程產品部門，同比有所改善-年增加 2200 萬美元。利息支出為 3,400 萬美元，而 2021 年為 2,700 萬美元，增加的原因是 2022 年利率上升和未償還借款增加。這些金額不包括每年分配給終止經營業務的約 250 萬美元。我們的全年所得稅撥備是 700,000 美元的收益，GAAP 稅前收入為 1,070 萬美元。

The benefit reflects the positive effects of tax planning initiatives, which include an increase in federal research and development credits during the year. For 2023, we estimate our effective income tax will range from 23% to 25%. We ended the year with $180 million of liquidity and which consisted of $58 million of cash on hand and $122 million of unused borrowing capacity under our various banking arrangements, which included $12 million of suppressed availability. During the fourth quarter, free cash flow, including cash proceeds of $6 million from asset sales was a use of $1 million. As we have discussed on recent calls, strong end market demand and supply chain challenges have resulted in additional investments in net working capital compared to historical levels. We estimate the excess working capital to be approximately $50 million. During the fourth quarter, we reduced net working capital by $7 million. And over the next 12 to 18 months, expect further reductions in net working capital days, resulting in significant improvement in free cash flows year-over-year.

該收益反映了稅收籌劃舉措的積極影響，其中包括年內聯邦研發信貸的增加。到 2023 年，我們估計我們的有效所得稅將在 23% 到 25% 之間。我們在年底擁有 1.8 億美元的流動資金，其中包括 5800 萬美元的手頭現金和 1.22 億美元的各種銀行安排下未使用的借貸能力，其中包括 1200 萬美元的受抑制可用性。第四季度，自由現金流（包括資產出售所得的 600 萬美元現金收益）使用了 100 萬美元。正如我們在最近的電話會議上討論的那樣，與歷史水平相比，強勁的終端市場需求和供應鏈挑戰導致對淨營運資本的額外投資。我們估計超額營運資金約為 5000 萬美元。第四季度，我們將淨營運資金減少了 700 萬美元。在接下來的 12 到 18 個月裡，預計淨營運資本天數將進一步減少，從而導致自由現金流量同比顯著改善。

With respect to our Aluminum products business, which is now classified as discontinued for financial reporting purposes, we reported a net loss for the year of $24.3 million, which was driven by losses incurred on a product line that we exited in mid-year non-cash charges for idle assets and start-up expenses related to our plant in Mexico. A significant portion of these losses were nonrecurring and noncash related. For the year, the business used cash in its operating activities of $1 million and had capital expenditures of $3.6 million.

關於我們的鋁產品業務，現在出於財務報告的目的被歸類為已停產，我們報告了 2430 萬美元的年度淨虧損，這是由於我們在非年中退出的產品線產生的虧損所致與我們在墨西哥的工廠相關的閒置資產和啟動費用的現金費用。這些損失中有很大一部分是非經常性和非現金相關的。這一年，該公司在其經營活動中使用現金 100 萬美元，資本支出為 360 萬美元。

Moving now to our fourth quarter results. Net sales from continuing operations of $382 million were up 17% year-over-year compared to $327 million in the prior year. driven by strong year-over-year customer demand across all 3 of our business segments. GAAP EPS for the quarter was a loss of $0.58 per diluted share. Adjusted EPS, which excludes primarily onetime nonrecurring items, was a loss of $0.09 per share. The $0.09 loss in the fourth quarter included 2 unfavorable tax items consisting of a valuation allowance against foreign tax credits of $1.8 million and other adjustments to previously recorded estimates, which together negatively impacted the fourth quarter by $0.26 per share. In addition, our fourth quarter results included an unfavorable foreign currency impact, totaling $0.10 per diluted share.

現在轉到我們的第四季度業績。持續經營業務的淨銷售額為 3.82 億美元，同比增長 17%，而上年同期為 3.27 億美元。受到我們所有 3 個業務部門同比強勁的客戶需求的推動。本季度的 GAAP 每股收益為攤薄後每股虧損 0.58 美元。調整後的每股收益（主要不包括一次性非經常性項目）每股虧損 0.09 美元。第四季度 0.09 美元的虧損包括 2 個不利的稅收項目，包括 180 萬美元的外國稅收抵免估值津貼和對先前記錄的估計的其他調整，它們共同對第四季度產生了每股 0.26 美元的負面影響。此外，我們第四季度的業績包括不利的外匯影響，攤薄後每股總計 0.10 美元。

Turning now to our segment results. In Supply Technologies 2022 net sales for the full year were a record $712 million, up 15% compared to $620 million in 2021. Average daily sales were up 14% year-over-year as we saw strong customer demand in most key end markets, with the biggest increases in the heavy-duty truck, power sports, agricultural industrial equipment, semiconductor and civilian aerospace end markets. In addition to increased customer demand and improved pricing, sales in the current year also benefited from the acquisitions of Southern Fasteners and Charter Automotive. Operating income in this segment totaled approximately $46 million in 2022, up 7% compared to $43 million in 2021, driven by the higher sales levels. Operating margins were 50 basis points lower year-over-year and were impacted by higher supply chain costs, primarily important domestic freight related and sales mix.

現在轉向我們的細分結果。 Supply Technologies 2022 年全年淨銷售額達到創紀錄的 7.12 億美元，與 2021 年的 6.2 億美元相比增長 15%。平均每日銷售額同比增長 14%，因為我們看到大多數關鍵終端市場的客戶需求強勁，重型卡車、動力運動、農業工業設備、半導體和民用航空終端市場增幅最大。除了客戶需求增加和定價改善外，本年度的銷售額還受益於對 Southern Fasteners 和 Charter Automotive 的收購。 2022 年，該部門的營業收入總計約為 4600 萬美元，較 2021 年的 4300 萬美元增長 7%，這主要得益於較高的銷售水平。營業利潤率同比下降 50 個基點，並受到供應鏈成本上升的影響，主要是重要的國內貨運相關和銷售組合。

In the fourth quarter of 2022, net sales of $181 million were up 18% compared to $153 million in the fourth quarter of 2021 and operating income was $10 million in each period. In our Assembly Components segment, which now excludes our aluminum products business, sales were $389 million for the year, up 21% compared to $322 million in 2021, resulting from sales on new programs launched and increased net price realization, which helped offset product inflation and other increased costs in this segment during the year. Excluding charges related to plant closure and consolidation activities, 2022 adjusted operating income was $7 million compared to $3 million in 2021 with the improvement driven by profit flow-through from the higher sales levels, price increases and benefits from profit improvement initiatives in this business.

2022 年第四季度淨銷售額為 1.81 億美元，與 2021 年第四季度的 1.53 億美元相比增長 18%，每個時期的營業收入為 1000 萬美元。在現在不包括我們的鋁產品業務的裝配組件部門，全年銷售額為 3.89 億美元，比 2021 年的 3.22 億美元增長 21%，這是由於新項目的銷售和淨價格實現的增加，這有助於抵消產品通脹以及年內該分部的其他增加成本。不包括與工廠關閉和整合活動相關的費用，2022 年調整後的營業收入為 700 萬美元，而 2021 年為 300 萬美元，這是由於更高的銷售水平帶來的利潤流入、價格上漲以及該業務的利潤改善計劃帶來的好處。

In the fourth quarter, net sales of $95 million were up 13% compared to $83 million in the fourth quarter of 2021 and adjusted operating income improved $5 million year-over-year to $2 million in the quarter. In our Engineered Products segment, 2022 sales were $393 million, up 17% compared to $336 million in 2021 driven by strong customer demand in both our capital equipment and forged and machine products businesses. Our bookings of new equipment for the full year were $201 million, an increase of 9% compared to 2021 levels. Our new equipment backlog as of December 31 was $163 million, 35% higher than a year ago and demand for our aftermarket parts and services continues to be strong. In our Forged and Machine products business, full year sales were up almost 30% and at their highest level since 2019, driven by strength in several key end markets, including the continuing recovery of the rail, oil and gas and aerospace and defense markets.

第四季度，淨銷售額為 9500 萬美元，較 2021 年第四季度的 8300 萬美元增長 13%，調整後營業收入同比增長 500 萬美元至 200 萬美元。在我們的工程產品部門，2022 年的銷售額為 3.93 億美元，與 2021 年的 3.36 億美元相比增長 17%，這得益於我們的固定設備以及鍛造和機械產品業務的強勁客戶需求。我們全年新設備的預訂額為 2.01 億美元，與 2021 年相比增長了 9%。截至 12 月 31 日，我們的新設備積壓訂單為 1.63 億美元，比一年前增長 35%，對我們的售後零件和服務的需求持續強勁。在我們的鍛造和機械產品業務中，受幾個關鍵終端市場的強勁推動，包括鐵路、石油和天然氣以及航空航天和國防市場的持續復甦，全年銷售額增長近 30%，達到 2019 年以來的最高水平。

Excluding charges related to plant consolidation activities, our adjusted operating income for the year was $23 million compared to $1 million a year ago, with a significant improvement driven by profit flow-through from higher sales levels, implemented operational improvements, the benefits of plant consolidation actions and other margin enhancement initiatives. We will complete the consolidation of our Drop Forge business in the first half of this year. and expect to incur costs of less than $2 million to finalize the project. In the fourth quarter of 2022, net sales of $106 million were up 17% compared to $90 million in the fourth quarter of last year, and adjusted operating income was $6 million in the quarter compared to a loss of $100,000 a year ago.

不包括與工廠合併活動相關的費用，我們今年調整後的營業收入為 2300 萬美元，而一年前為 100 萬美元，由於更高的銷售水平帶來的利潤流入、實施的運營改進、工廠合併的好處推動了顯著改善行動和其他提高利潤率的舉措。我們將在今年上半年完成 Drop Forge 業務的整合。預計完成該項目所需的費用將少於 200 萬美元。 2022 年第四季度淨銷售額為 1.06 億美元，與去年第四季度的 9000 萬美元相比增長 17%，本季度調整後營業收入為 600 萬美元，而去年同期為虧損 10 萬美元。

Corporate expenses were up $3 million in 2022 due to higher employee-related costs and professional fees related primarily to tax planning initiatives implemented during the year. And finally, looking into 2023, we expect year-over-year revenue growth of approximately 5% to 10%. The revenue growth will be driven by strong demand in Supply Technologies in most end markets from improved product pricing and increased volumes in assembly components and from the strong backlogs and increased productivity in our Engineered Products segment. In addition, we expect year-over-year improvement in adjusted operating income, EBITDA as defined free cash flow and adjusted EPS in 2023, driven by the sales growth. Benefits from the plant consolidations completed over the last 2 years. and other implemented margin improvement initiatives across each business segment. Now I'll turn the call back over to Matt.

2022 年公司支出增加了 300 萬美元，原因是與員工相關的成本以及主要與年內實施的稅收籌劃舉措相關的專業費用增加。最後，展望 2023 年，我們預計收入同比增長約 5% 至 10%。收入增長將受到大多數終端市場對供應技術的強勁需求的推動，這些需求來自產品定價的提高和裝配部件數量的增加，以及我們工程產品部門的大量積壓和生產力的提高。此外，我們預計在銷售增長的推動下，調整後的營業收入、定義為自由現金流的 EBITDA 和調整後的每股收益將在 2023 年同比改善。從過去 2 年完成的工廠整合中受益。以及在每個業務部門實施的其他提高利潤率的舉措。現在我將把電話轉回給馬特。

Great. Thank you very much, Pat. We'll now take some questions.

偉大的。非常感謝，帕特。我們現在回答一些問題。

(Operator Instructions) Our first question is from Yilma Abebe with JPMorgan.

（操作員說明）我們的第一個問題來自摩根大通的 Yilma Abebe。

My first question is on the aluminum products asset sale. I guess firstly, can you put us in context for us? What was the relative revenue contribution in 2022 EBITDA, if you have it so that we can model going forward appropriately.

我的第一個問題是關於鋁產品資產出售。我想首先，你能為我們介紹一下背景嗎？ 2022 年 EBITDA 的相對收入貢獻是多少，如果有的話，我們可以適當地建模。

Yes, approximately $200 million, Yilma is the revenue -- and the EBITDA, as we define it, was a loss of approximately $12 million.

是的，大約 2 億美元，Yilma 是收入——我們定義的 EBITDA 是大約 1200 萬美元的虧損。

Okay. Great. And in terms of the business, -- was it a stand-alone business within the portfolio? Are there sort of friction costs in terms of separating the business from the rest of the enterprise?

好的。偉大的。就業務而言，它是投資組合中的獨立業務嗎？將業務與企業的其他部分分開是否會產生摩擦成本？

Yilma, this is Matt. Our automotive segment assembly components is really grouped into 2 businesses. One is our Assembly Components division, which includes most of our rubber business and some other companies as well and then General Aluminum, the aluminum products. So the General Aluminum products, which is the $200 million piece is a stand-alone business. So no, it is not incorporated deeply inside of the rest of the business, either ParkOhio or the rest of the automotive business, which we are retaining.

伊爾瑪，這是馬特。我們的汽車部門裝配組件實際上分為 2 個業務。一個是我們的裝配部件部門，它包括我們的大部分橡膠業務和一些其他公司，然後是通用鋁業，即鋁產品。因此，價值 2 億美元的 General Aluminum 產品是一項獨立的業務。所以不，它沒有深入到我們保留的其他業務中，無論是 ParkOhio 還是其他汽車業務。

Okay. Great. And then I guess looking forward to 2023, and free cash flow expectations of $40 million. Just so that we have apples-to-apples comparison, is this sort of when you think of free cash flow for 2022, the comparable number, cash from ops less CapEx, I'm getting about a $54 million number. Is that the right number in terms of the free cash flow for 2022 and then going to $40 million for next year?

好的。偉大的。然後我想期待 2023 年，以及 4000 萬美元的自由現金流預期。只是為了讓我們進行蘋果對蘋果的比較，當你想到 2022 年的自由現金流時，這種可比較的數字，來自運營的現金減去資本支出，我得到大約 5400 萬美元的數字。就 2022 年的自由現金流而言，這個數字是否正確，明年將達到 4000 萬美元？

Yes. Yilma, the cash flow for 2023, as we've laid out in our press release of $40 million excludes any transaction related to our aluminum product segment. So I think that will at least give you an apples-and-apples comparison. And then in the current year, as laid out in our cash flow statement, you'll be able to see the free cash flow. Matt referenced $27 million of during the period. And then obviously, there was a use of cash from operating activities relative to the increase in working capital that we've seen in the business.

是的。 Yilma，2023 年的現金流量，正如我們在新聞稿中所列的 4000 萬美元，不包括與我們的鋁產品部門相關的任何交易。所以我認為這至少會給你一個同類比較。然後在今年，正如我們的現金流量表中所列，您將能夠看到自由現金流量。馬特在此期間提到了 2700 萬美元。然後很明顯，相對於我們在業務中看到的營運資本的增加，經營活動中使用了現金。

Okay. So to be clear, though, the free cash flow, as you see it in 2022, comparable to this $40 million forecast for 2023. That's sort of going from $54 million to plus $40 million. Is that correct? -- minus $54 million to plus $40 million.

好的。不過，需要明確的是，正如您在 2022 年看到的那樣，自由現金流與 2023 年的 4000 萬美元預測相當。從 5400 萬美元增加到 4000 萬美元。那是對的嗎？ -- 減去 5400 萬美元到加 4000 萬美元。

That's correct. That's right.

這是正確的。這是正確的。

Jim, I would just -- I would give context to that only in the following way. It gets lost, I think, in the shuffle a little bit -- if you take even the midpoint of the revenue range we've talked about for 2023, that would mean over 24 months, the business has grown in real dollars in the range of $300 million. So we've made tremendous investments in the business at a time where we were not very profitable. So I think 2023, as we look forward is a lot about generating cash as a business and harvesting some of the working capital that was a little bit excess based on shoring up supply chains and so forth. So I think there's some opportunity here on the free cash flow side as growth, what I'll call, stabilizes to metabolize $300 million over 24 months or more is a lot.

吉姆，我只想 - 我只會通過以下方式提供背景信息。我認為，它在洗牌中迷失了一點——如果你甚至採用我們談到的 2023 年收入範圍的中點，那將意味著超過 24 個月，該業務的實際美元增長在該範圍內3億美元。因此，我們在利潤不高的時候對業務進行了大量投資。因此，我認為 2023 年，正如我們所期待的那樣，很多都是關於作為一項業務產生現金，並收穫一些基於支撐供應鍊等而有點過剩的營運資金。所以我認為在自由現金流方面有一些機會，因為增長，我稱之為穩定，在 24 個月或更長時間內代謝 3 億美元是很多的。

I think you partly answered sort of my last follow-up question on the free cash flow. And that is sort of, I guess, a bit of a bridge. It sounds like some of it is going to be from -- driven by revenue increase and the related profitability. A lot of it, it appears to be working capital coming back. If you're ready maybe to help us in terms of the relative size, what is the working capital contribution to this $40 million free cash flow forecast versus the growth in the business and improving profitability.

我認為您部分回答了我關於自由現金流的最後一個後續問題。我想這有點像一座橋樑。聽起來其中一些將來自 - 受收入增長和相關盈利能力的推動。很多，似乎是營運資金回來了。如果你準備好在相對規模方面幫助我們，那麼這個 4000 萬美元的自由現金流預測的營運資本貢獻與業務增長和盈利能力的提高是多少。

Yes, Yilma I would comment that the excess working capital, as I mentioned in my comments, we believe is roughly $50 million. That recovery or the harvesting of that excess working capital to cash will not occur overnight. We estimate that, that will occur over the next 12 to 18 months as supply chain stabilizes, as further reductions in supplier lead times take place. And I think clearly, that will happen over 12 to 18 months, the additional working capital needed to grow our business into next year depends on the business segment. But in general, if you use 25% to 28% of every new sales dollar is invested in working capital. I think that's a good starting point and then consider the harvesting of the $50 million over the next 12 to 18 months.

是的，Yilma 我會評論說，正如我在評論中提到的那樣，我們認為超額營運資金約為 5000 萬美元。這種複蘇或將多餘的營運資金轉化為現金不會在一夜之間發生。我們估計，隨著供應鏈穩定，供應商交貨時間進一步縮短，這將在未來 12 到 18 個月內發生。而且我清楚地認為，這將在 12 到 18 個月內發生，將我們的業務發展到明年所需的額外營運資金取決於業務部門。但一般來說，如果您將每筆新銷售額的 25% 到 28% 投資於營運資金。我認為這是一個很好的起點，然後考慮在接下來的 12 到 18 個月內收穫 5000 萬美元。

Our next question is from Dave Storms with Stonegate Capital Markets.

我們的下一個問題來自 Stonegate Capital Markets 的 Dave Storms。

Just wanted to kind of start on backlogs I know last quarter, you mentioned you were looking at probably about 6 to 9 months of backlog. Has that kind of shortened up a little bit? Or what's the color that you're seeing there?

只是想從我知道的上個季度的積壓開始，你提到你正在尋找大約 6 到 9 個月的積壓。那種縮短了一點？或者你在那裡看到的是什麼顏色？

No activity. Again, our capital equipment business, which is what we're referencing, Dave, is what we were talking about when we allude to those backlogs. Most of the rest of the business on the non-equipment business is shorter-term sort of visibility. So when we refer to the capital equipment business and the backlogs, they've continued to stay strong. The order book continues. It can be a bit lumpy. But in general, the order book and the order interest continues to be strong. And again, I would point to while there may be some fears of a recession, I would point to the fact that the manufacturing sector in the United States has been massively underinvested in. And as they're looking at some of the megatrends I mentioned in the first part of my comments, particularly as it relates to infrastructure and defense, we're underinvested in the country. So I think we're going to continue to see investments in upgrading the capacity and the productivity in the base. So it may be choppy and may be influenced a bit by credit. But in general, I think we're seeing some positive trends.

沒有活動。同樣，我們提到的資本設備業務，戴夫，就是我們在提到這些積壓時所談論的。非設備業務的其餘大部分業務都是短期可見性。因此，當我們提到資本設備業務和積壓訂單時，它們繼續保持強勁。訂單簿繼續。它可能有點塊狀。但總的來說，訂單簿和訂單興趣繼續強勁。再一次，我要指出的是，雖然人們可能會擔心經濟衰退，但我要指出的是，美國的製造業投資嚴重不足。當他們關注我提到的一些大趨勢時在我評論的第一部分，特別是與基礎設施和國防相關的部分，我們在該國的投資不足。因此，我認為我們將繼續看到對提升基地產能和生產力的投資。所以它可能會起伏不定，可能會受到信用的影響。但總的來說，我認為我們看到了一些積極的趨勢。

So that's actually a good segue to my second question here. I'm just sorry to hear some rumblings of other people seeing funds related to the Inflation Adoption Act start to trickle into the market. Is any of that expected to get to you guys at ParkOhio and does that give you any visibility into 2023 related to any cash on that might make it to you?

所以這實際上是我在這裡的第二個問題的一個很好的轉折點。我只是很遺憾聽到其他人的傳聞，他們看到與通貨膨脹法案相關的資金開始流入市場。 ParkOhio 的任何人都希望得到這些嗎？這是否能讓您了解 2023 年與可能為您帶來的任何現金相關的信息？

I think it's a great question, and I wish I had a better answer. The answer I would tell you, what I would give you is trickle is the right word. I don't think there's a ton of visibility at how that money is going to be spent, at least where we are in the supply chain. I will say certainly large defense contractors and other large government suppliers are certainly -- I'm certain having discussions at that level of how to invest these dollars. So there are some very strategic conversations going on between ourselves and some of the kind of household name manufacturers around increasing capacity for them, for with our equipment for us to support them. And I think it's very real. And then layer on top of that, some of the reshoring that we're seeing motivated by the infrastructure bill and the inflation -- I mean, we're continuing to see I think, a need for more American manufacturing.

我認為這是一個很好的問題，我希望我有一個更好的答案。我會告訴你的答案，我會給你的是涓涓細流，這個詞是正確的。我不認為這筆錢將如何花掉，至少我們在供應鏈中的位置是不可見的。我肯定會說，大型國防承包商和其他大型政府供應商肯定 - 我肯定會在那個層面上討論如何投資這些美元。因此，我們與一些家喻戶曉的製造商之間正在進行一些非常具有戰略意義的對話，圍繞增加他們的產能，用我們的設備來支持他們。我認為這是非常真實的。然後最重要的是，我們看到基礎設施法案和通貨膨脹推動的一些回流——我的意思是，我認為我們將繼續看到對更多美國製造業的需求。

So I wouldn't say that, that -- our visibility is great. It's probably baked into the backlog a little bit on the equipment. But I don't know that -- I would call it more trickling, visibility is still weak. But the anecdotal evidence of the type of conversations were being had would suggest that it's on its way.

所以我不會這麼說——我們的知名度很高。它可能會在設備上稍微融入積壓工作。但我不知道——我會稱之為更涓涓細流，能見度仍然很低。但是關於正在進行的對話類型的軼事證據表明它正在進行中。

Our next question is from Steve Barger with KeyBanc Capital Markets.

我們的下一個問題來自 KeyBanc Capital Markets 的 Steve Barger。

Pat, you said the $20 million received and the $25 million promissory note is a portion of the sales price for the aluminum business. Any more details you can provide on what that total sales price could be?

帕特，你說收到的 2000 萬美元和 2500 萬美元的期票是鋁業務銷售價格的一部分。您可以提供有關總銷售價格的更多詳細信息嗎？

Yes, Steve, I really can't comment right now. We're in the middle of the process. And so I can't comment and won't comment until we have a definitive agreement in place. But to reiterate, the $20 million in cash and the promissory note was a portion of the anticipated sale price of the business.

是的，史蒂夫，我現在真的不能發表評論。我們正處於這個過程的中間。因此，在我們達成最終協議之前，我不能也不會發表評論。但重申一下，2000 萬美元現金和期票是該企業預期出售價格的一部分。

Understood. And this looks like it should be nicely deleveraging, which is great, and you expect improving cash flow. I know you put the initial $20 million to the revolver, but with the bonds trading at a discount, is there any thought to allocating some capital to take advantage of that?

明白了。這看起來應該是很好的去槓桿化，這很好，你期望現金流會改善。我知道你將最初的 2000 萬美元用於循環，但隨著債券的折價交易，是否考慮分配一些資金來利用這一點？

Yes, Steve, we historically have purchased the bonds. We expect the proceeds on any sale to delever the company and reduce our net debt. And we'll be flexible to different ways to do that. But we agree it will be a deleveraging event and we're going to give ourselves the flexibility to be open to reduce bank debt or buy back the bonds if there's an opportunity to do so.

是的，史蒂夫，我們歷來購買過債券。我們預計任何出售的收益都會使公司去槓桿化並減少我們的淨債務。我們將靈活地採用不同的方式來做到這一點。但我們同意這將是一次去槓桿化事件，我們將為自己提供靈活性，以便在有機會的情況下減少銀行債務或回購債券。

Got it. Okay. And I know it's not a done deal yet, but with -- when that closes, Matt, what does your focus turn to? What becomes the next priority? I know you referenced a few things, but how are you thinking about this once that's off your plate?

知道了。好的。而且我知道這還沒有完成，但是 - 當它關閉時，馬特，你的重點是什麼？下一個優先事項是什麼？我知道您提到了一些事情，但是一旦您不在意這些事情，您會怎麼想呢？

Yes. No, that's a great question, Steve. I -- and what I wanted to articulate opening comments, and I did it, but I think the opportunity to revisit it. We haven't stopped focusing on what we think are some of the great opportunities in the business. And to be honest with you, General Aluminum is a great opportunity. The reality of it is, we can't do everything at once. And with the growth we're seeing across the business and anticipate into 2023, we just can't do it all. So if you look at where we spent money last year, particularly in some of this exciting and unique forging capacity, which could play right into the prior caller's question about infrastructure and so forth, and defense what we're doing on the engineered fasteners side. You know how much we like that business and adding capacity through the acquisition we did last year or incremental capacity, which plays right into electrification is awesome.

是的。不，這是一個很好的問題，史蒂夫。我——以及我想表達的開場白，我做到了，但我認為有機會重新審視它。我們沒有停止關注我們認為是業務中的一些巨大機會。老實說，通用鋁業是一個很好的機會。現實情況是，我們無法一次完成所有事情。隨著我們在整個業務中看到的增長以及預計到 2023 年的增長，我們無法做到這一切。所以如果你看看我們去年花錢的地方，特別是在一些令人興奮和獨特的鍛造能力上，這可以直接回答先前來電者關於基礎設施等的問題，並為我們在工程緊固件方面所做的事情辯護.你知道我們是多麼喜歡這項業務，並通過我們去年進行的收購或增加產能來增加產能，這對電氣化來說是非常棒的。

So our first area of focus is going to be continuing to feed those parts of our business that we'll get an unfair share of our capital as we see them grow at super accretive margins. So -- and I would say that the other thing we're focused on, again, we haven't not been focused on it, but last year was about addressing supply chains and keeping our customers satisfied, we're going to pivot back to the balance sheet. So we're going to give that an undue amount of attention this year in an effort to with or without the sale candidly, to reduce our leverage and position ourselves well to continue to invest in these businesses.

因此，我們的第一個重點領域將繼續為我們業務的那些部分提供資金，因為我們看到它們以超高的利潤率增長，我們將獲得不公平的資本份額。所以 - 我想說的是我們關注的另一件事，我們並沒有沒有關注它，但去年是關於解決供應鏈問題並讓我們的客戶滿意，我們將轉向到資產負債表。因此，我們今年將給予過多的關注，以努力坦率地進行出售或不進行出售，以降低我們的槓桿率並使我們自己做好繼續投資這些業務的準備。

If we can grow over a couple of years, approaching 20% with -- or more -- I'm sorry, more than that, 25% or 30% and do it in these kinds of products, that bodes really well for our trajectory, both in terms of margin and candidly, the kind of business that people should want to invest in. So I think we've got in front of us, the things to do. In the backdrop, will we continue maybe to see an opportunity for an acquisition? Yes. Within our DNA -- but I would put that third on the list of the things I've mentioned.

如果我們能在幾年內實現增長，接近 20%——或更多——我很抱歉，不止於此，25% 或 30%，並且在這些類型的產品中做到這一點，這對我們的發展軌跡來說是個好兆頭，無論是在保證金方面還是坦率地說，人們應該想要投資的那種業務。所以我認為我們已經擺在我們面前，要做的事情。在這種背景下，我們是否會繼續看到收購的機會？是的。在我們的 DNA 中——但我會把第三個放在我提到的事情清單上。

Got it. And I know that you guys did a lot of hard work on pricing actions to offset inflation last year. And I think, Matt, when you said the heavy lifting is done, it was in reference to that. For the growth of 5% to 10%, can you talk about what your expectation is for price versus volume in 2023?

知道了。我知道你們去年在定價行動上做了大量努力以抵消通貨膨脹。我認為，馬特，當你說繁重的工作已經完成時，是指那個。對於 5% 到 10% 的增長，你能談談你對 2023 年價格與數量的預期嗎？

Yes. It's interesting. I really probably met the restructuring more than the pricing, to be quite honest. But I would tell you on the pricing side, I think, in general, with some exceptions, but in general, those areas that were disproportionately and materially damaging our company, particularly in the continuing operations, we've addressed. So I think that a lot of those tough conversations have been had. That is a work in process because the market is a work in process. So as I've mentioned on prior calls, I think in many cases, raw material was addressed early in the inflationary environment, to a lesser extent, permanent and significant changes in labor costs have not been addressed. So no, I think that there is a daily list of opportunities that we continue to work through to identify opportunities where we're not getting paid for what we do because of how the marketplace has changed, where we have not recouped our costs.

是的。這真有趣。老實說，我真的很可能遇到了重組而不是定價。但我會在定價方面告訴你，我認為，一般來說，除了一些例外，但總的來說，那些對我們公司造成不成比例和實質性損害的領域，特別是在持續經營方面，我們已經解決了。所以我認為已經進行了很多艱難的對話。這是一個在製品，因為市場是一個在製品。因此，正如我在之前的電話會議上提到的那樣，我認為在許多情況下，原材料在通脹環境的早期就得到了解決，在較小程度上，勞動力成本的永久和重大變化沒有得到解決。所以不，我認為每天都有一份機會清單，我們會繼續努力，以確定由於市場發生變化而我們沒有得到報酬的機會，我們沒有收回我們的成本。

But I would say that those corners of the business where we were seeing things that were more catastrophic that burn through the P&L over the last 18 months, I think largely, those have been addressed. But our work is not done there. So the restructuring feels like it's mostly done. That piece until inflation moderates completely, that work is never done.

但我要說的是，在過去 18 個月中，我們看到的那些更災難性的事情在損益表中燃燒的那些業務角落，我認為在很大程度上，這些問題已經得到解決。但是我們的工作還沒有在那裡完成。所以重組感覺好像已經基本完成了。在通貨膨脹完全緩和之前，這項工作永遠不會完成。

We do have a follow-up question from Dave Storms with Stonegate Capital Markets.

我們確實有來自 Stonegate Capital Markets 的 Dave Storms 提出的後續問題。

Just hoping you could give us a little more color on the M&A market that you touched on how that's currently going to be a backdrop for you. But just with the aluminum products, I said, was that more of an opportunistic buyer? Or is this a good time to be a seller, Kind of what are you seeing in the external (inaudible)?

只是希望你能給我們更多關於併購市場的色彩，你談到了目前將如何成為你的背景。但就鋁產品而言，我說，這更像是一個機會主義的買家嗎？或者這是成為賣家的好時機，你在外部（聽不清）看到了什麼？

Yes. Well, I'll touch at a high level on General Aluminum. I would tell you, we've been an investor in General Aluminum, our family quite frankly, for a lot of years, 30, 40 years. It is a very good business. And it's going in a direction which is highly sought after. Candidly, there's not enough capacity in that foundry space for what the OEMs want to do. The reality of it is, though, as I mentioned, it is a -- We've got so many opportunities. I think we had to make some strategic decisions given the growth we're seeing on where we want to allocate our capital. And we felt there are some good strategic buyers in the marketplace who can do well with that business as well as we can. So it became, I think, an obvious place to try and harvest some money.

是的。好吧，我將在高層次上接觸通用鋁業。我會告訴你，我們一直是 General Aluminum 的投資者，坦率地說，我們的家族已經投資了很多年，30 年，40 年。這是一項非常好的業務。它正朝著備受追捧的方向發展。坦率地說，對於原始設備製造商想要做的事情，代工空間的產能不足。然而，正如我所提到的，它的現實是——我們有很多機會。鑑於我們在我們想要分配資本的地方看到的增長，我認為我們必須做出一些戰略決策。我們覺得市場上有一些優秀的戰略買家，他們可以像我們一樣做好這項業務。因此，我認為，它成為了一個明顯的嘗試和收穫一些錢的地方。

We have reached the end of our question-and-answer session. I would like to turn the conference back over to management for closing comments.

我們的問答環節已經結束。我想將會議轉回管理層徵求結束意見。

Great. Thank you very much. I know that this -- a lot of noise, so to speak, in these comments in this press release. But I hope what has been taken away from this call is that we feel as though we're on the backside of COVID finally, so to speak, we feel as though we've got an opportunity to really begin to benchmark against what we were doing pre COVID in 2019. We certainly hope and anticipate that the General Aluminum business deal will go through. but we're prepared either way to move forward with a solid business plan there. And in the meantime, again, we didn't take any time off in terms of restructuring our business or investing in the kinds of things that will take this business to the next level. So thank you for your time today, and we really look forward to the first quarter call. Thanks.

偉大的。非常感謝。我知道這 - 可以說，在本新聞稿的這些評論中有很多噪音。但我希望從這次電話會議中得到的好處是，我們覺得我們終於站在了 COVID 的背後，可以這麼說，我們覺得好像我們有機會真正開始以我們過去的情況為基準在 2019 年做 COVID 之前的工作。我們當然希望並期待通用鋁業的業務交易能夠通過。但無論哪種方式，我們都準備好通過可靠的商業計劃向前推進。與此同時，再一次，我們沒有在重組我們的業務或投資將把這項業務提升到一個新水平的事情方面休息。所以感謝你今天的時間，我們非常期待第一季度的電話會議。謝謝。

Thank you. This will conclude today's conference. You may disconnect your lines at this time, and thank you for your participation.

謝謝。今天的會議到此結束。此時您可以斷開您的線路，感謝您的參與。