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Jun 30, 2021
Park-Ohio Q2 2021 Earnings Report
Park-Ohio experienced revenue growth but faced challenges with profitability due to supply chain disruptions and increased costs.
Key Takeaways
Park-Ohio reported a revenue increase of $350 million, but experienced a net loss due to the global semiconductor chip shortage and increased raw material, labor, and supply chain costs. The company's outlook for EBITDA margin and free cash flow was revised downwards.
Revenue reached $350 million in Q2 2021, up from $228.3 million in Q2 2020.
GAAP EPS loss was $(0.44), while adjusted EPS loss was $(0.33).
The global semiconductor chip shortage significantly impacted automotive demand and profitability.
Increased raw material, labor, and supply chain costs affected the company's performance.
Park-Ohio
Park-Ohio
Park-Ohio Revenue by Segment
Revenue by Segment
Supply Technologies Revenue
CapyFin.comAssembly Components Revenue
CapyFin.comEngineered Products Revenue
CapyFin.com Forward Guidance
Park-Ohio expects organic sales growth of 8% to 12% and capital expenditures of $28 million to $32 million for the year. However, EBITDA margin outlook was decreased and the company expects to utilize cash of up to $15 million for free cash flow purposes.
Positive Outlook
- Continued organic sales growth expected within the previously announced range of 8% to 12%.
- Capital expenditures expected to remain within the previously announced range of $28 million to $32 million.
- Profit improvement initiatives are expected to take hold during the second half of the year.
- Considerable improvement expected from businesses most affected by recent challenges.
- Continued momentum expected from Supply Technologies and Engineered Products segments.
Challenges Ahead
- EBITDA margin outlook revised downwards due to the global semiconductor chip shortage.
- EBITDA margin impacted by higher raw material, labor, and supply chain costs.
- Company now expects to utilize cash of up to $15 million in 2021 for free cash flow purposes.
- Global semiconductor chip shortage is expected to continue and impact sales in Q3 by approximately $15 million.
- Recovery of the business is uneven as it relates to operating profits.
Revenue & Expenses
Visualization of income flow from segment revenue to net income