Park-Ohio Holdings Corp. (NASDAQ:PKOH) Q4 2023 Earnings Call Transcript
Park-Ohio Holdings Corp. (NASDAQ:PKOH) Q4 2023 Earnings Call Transcript March 6, 2024
Park-Ohio Holdings Corp. isn’t one of the 30 most popular stocks among hedge funds at the end of the third quarter (see the details here).
Operator: Good morning and welcome to the Park-Ohio Fourth Quarter and Full Year 2023 Results Conference Call. At this time all participants are in a listen-only mode. After the presentation the company will conduct a question-and-answer session. Today's conference is also being recorded. [Operator Instructions] 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 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 in the company's 2022 10-K, which was filed on March 16, 2023, with the SEC.
Additionally, the company may discuss adjusted EPS, adjusted operating income and EBITDA as defined on a continuing operations or consolidated basis. These metrics are not measures of performance or generally accepted accounting principles. For a reconciliation of EPS to adjusted EPS, operating income to adjusted operating income and net income attributable to Park-Ohio common shareholders to EBITDA as defined please refer to the company's recent earnings release. I will now turn the conference over to your host, Mr. Matthew Crawford, Chairman, President and CEO. Please proceed Mr. Crawford.
Matthew Crawford: Good morning. Thank you, Ralph. I appreciate the intro. Welcome to our 2023 fourth quarter and annual conference call to fully appreciate the recent collective effort of our Park-Ohio team. It's worth appreciating the more than 30%, or almost $400 million of revenue growth in the last two years, which has set all-time records across our diverse portfolio and in the aggregate. This was done with little impact from acquisitions. The hard work was complemented by the strong brands and customer relationships which have been built up over years and even decades due to innovation, solid operating performance and customer satisfaction. 2023 was committed to metabolizing this rapid growth as we also completed our restructuring and enhanced our focus on improved operating execution and on our key financial metrics.
Thank you to our customers and to our entire team. In line with our areas of focus, critical achievements also included a 230 basis point increase in our gross profit and operating cash flows of more than $50 million, which was used to pay down debt and grow our business. 2024 is off to a fast start with what we believe to be a simpler and less capital intensive business model. While we believe that we're entering a slower revenue growth environment, we anticipate ongoing pockets of relative strength in our diverse set of end markets, in particular, aerospace, defense, and those industries which are beneficiaries of government investments like semiconductor, infrastructure and green energy. In addition, we have strong backlogs heading into 2024, particularly in our IEG [ph] Group.
Perhaps more importantly, we're laser focused on continuous improvement. Given the amount of restructuring and growth over the last two years, we need to continue to work aggressively to optimize our execution and reduce costs. Our allocation of capital will focus heavily on these initiatives, as well as on organic growth opportunities in our best businesses. Creating operating leverage in our best assets, continuing to grow gross margins and generating additional cash flow to deleverage our company are all of the greatest strategic importance during 2024. Thank you. I'll turn it over to Pat to cover the details of the results.
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