Good morning. Welcome to Park-Ohio 4th quarter and full year 2022 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. 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 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. Additionally, the company may discuss adjusted EPS, adjusted operating income, and EBITDA as defined on the continuing operations or a consolidated basis. These metrics are not measures of performance under generally accepted accounting principles. For reconciliation of EPS to adjusted EPS, operating income to adjusted operating income, and net income attributed to Park-Ohio's common share holders 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. 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 three 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 three years of battling inflation, supply chain, and a myriad of other challenges. While our job is never complete, I wanna highlight the incredible effort by 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, 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. 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 two 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. 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. 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, quote, 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. 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. We anticipate, whether it's electric cars, wind energy, or electric furnace technology, we will continue to benefit globally. Lastly, improved government spending in infrastructure and defense will accelerate the need for capacity in many basic industries like forging and steel making, 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 wanna 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. 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. Key highlights in 2022 included the following. First, we achieved record consolidated net sales from continuing operations of $1.5 billion of 17% year-over-year, driven by growth in all three 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. 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 four 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 two years combined, cash proceeds from our asset sales total $30 million, resulting in gains of $17 million. We completed two 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. During the fourth quarter, we made the strategic decision to exit our Aluminum Products business. On December 30th, we signed a memorandum of understanding with a third party to acquire the business. Pursuant to the MOU, we received $20 million and a promissory note in the amount of $25 million, representing a portion of the final sale price. The sale of the business is subject to various conditions, including the final execution of a purchase agreement. 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 one-time non-recurring 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. Excluding plant closure costs, 2022 adjusted gross margin was 14.1% 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 pre-tax income of $10.7 million. 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%-25%. We ended the year with $180 million of liquidity, 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. 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 non-recurring and non-cash related. For the year, the business used cash in its operating activities of $1 million and had capital expenditures of $3.6 million. 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 three of our business segments. GAAP EPS for the quarter was a loss of $0.58 per diluted share. Adjusted EPS, which excludes primarily one-time non-recurring items, was a loss of $0.09 per share. The $0.09 loss in the fourth quarter included two 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. 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 and 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 import and domestic freight-related and sales mix. 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. In the fourth quarter, net sales of $95 million were up 13% compared to $83 million in the fourth quarter of 2021, 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 31st was $163 million, 35% higher than a year ago. 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. 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 Kropp 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. Adjusted operating income was $6 million in the quarter compared to a loss of $100,000 a year ago. 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. Finally, looking into 2023, we expect year-over-year revenue growth of approximately 5%-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 two years and other implemented margin improvement initiatives across each business segment. Now I'll turn the call back over to Matt. Great. Thank you very much, Pat. We'll now take some questions. Thank you. If you would like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star two if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. Our first question is from Yilma Abebe with JP Morgan. Please proceed. thank you, good morning. Good morning, Yilma. Good morning. My first question is on the Aluminum Products asset sale. I guess, you know, firstly, can you put it in context for us, what was the relative revenue contribution in 2022, you know, EBITDA if you have it, just so that we can model it going forward appropriately? Yeah. Approximately $200 million, Yilma, is the revenue. The EBITDA, as we define it, was a loss of approximately $12 million. Okay. Great. You know, thank you. In terms of, you know, the business, was it a standalone in a business within the portfolio? You know, are there sort of friction costs in terms of separating the business from the rest of the enterprise? Yilma, this is Matt. Our automotive segment, Assembly Components, is really grouped into two 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. The General Aluminum Products, which is the $200 million piece, is a standalone business. No, it is not incorporated deeply inside of the rest of the business, either Park-Ohio or the rest of the automotive business, which we are retaining. Okay. You know, great. I guess looking forward to 2023, a free cash flow expectations of, you know, $40 million, just so that we have apples comparison, is this sort of when you think of free cash flow, you know, for 2022, the comparable number, you know, cash from ops, less CapEx, I'm getting about a $54 million number. Is that the right number in terms of, you know, the free cash flow for 2022 going to $40 million for next year? Yeah, 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 Products segment. Yeah. I think that'll at least give you an apples and apples comparison. You know, in the current year, as laid out in our cash flow statement, you'll be able to see the free cash flow. You know, Matt referenced $27 million of CapEx during the period. Obviously, there was a use of cash from operating activities relative to the increase in working capital that we've seen in the business. Okay. Just 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 to +40. Is that correct? That's correct. Minus fifty-four to plus forty? That's right. Okay, great. Thank you. I guess. Yilma, I would give context to that only in the following way. You know, it gets lost, I think, in the shuffle a little bit. You know, if you take even the midpoint of the revenue range we've talked about, for 2023, you know, that would mean over 24 months, the business has grown in real dollars in the range of $300 million. You know, we've made tremendous investments in the business at a time where we were not very profitable. You know, I think 2023, as we look forward, is a lot about, you know, 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. you know, 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. Thank you. I think you partly answered sort of my last and follow-up question on the free cash flow. That is sort of, I guess, you know, a bit of a bridge. You know, it sounds like some of it is gonna be driven by, you know, revenue increase and the related profitability. A lot of it appears to be working capital, you know, coming back. If you're ready maybe to help us in terms of the relative size, you know, what is the working capital contribution to this $40 million free cash flow forecast versus the growth in the business and improving profitability? Thank you. Yeah, Yilma, I would comment that, you know, 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'll occur over the next 12 to 18 months as supply chain stabilizes, as further reductions in supplier lead times take place. You know, I think clearly that'll happen over 12 to 18 months. The additional working capital needed to grow our business into next year depends on the business segment. In general, if you use 25%-28% of every new sales dollar is invested in working capital, I think that's a good starting point. Consider the harvesting of the $50 million over the next 12 to 18 months. Thanks very much. That's all I had. Thank you. Thank you. Our next question is from Dave Storms with Stonegate Capital Markets. Please proceed. Morning, gentlemen. Thank you for taking my call. Just wanted to kind of start on backlogs. I know last quarter you mentioned you were looking at probably about six to nine months of backlogs. Has that kind of shortened up a little bit, or what's the color that you're seeing there? No, no activity. Again, our capital equipment business, which is what we're referencing, Dave, is what we're talking about when we allude to those backlogs. You know, most of the rest of the business, the non-equipment business is shorter term, sort of visibility. 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. 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. As they're looking at some of the mega trends I mentioned in the first part of my comments, particularly as it relates to infrastructure and defense, we're underinvested as a country. I think we're gonna continue to see investments in upgrading the capacity and the productivity in the base. It may be choppy, it may be influenced a bit by credit, but in general, I think we're seeing some positive trends. That's actually a good segue to my second question here. I'm starting to hear, you know, some rumblings of other people seeing funds related to the Inflation Reduction Act start to trickle into the market. Is any of that expected to get to you guys at Park-Ohio, and does that give you any visibility into 2023 related to any of those funds that might make it to you? 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's the right word. I don't think there's a ton of visibility in how that money's gonna 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. 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. I think it's very real. Layer on top of that, some of the reshoring that we're seeing, you know, motivated by the infrastructure bill and the Inflation Reduction Act. I mean, you know, we're continuing to see, I think, a need for a more American manufacturing. I wouldn't say 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's still weak, the anecdotal evidence of the type of conversations that are being had, would suggest that it's on its way. That's very helpful. Thank you. Our next question is from Steve Barger with KeyBanc Capital Markets. Please proceed. Thanks. Morning. Morning. 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? Yeah, Steve, I really can't comment right now. You know, we're in the middle of the process, I can't comment and won't comment until, you know, we have a definitive agreement in place. To reiterate, the $20 million in cash and the promissory note was a portion of the anticipated sale price of the business. Understood. This looks like it should be nicely de-leveraging, 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? You know, Steve, we historically have purchased the bonds. We expect the proceeds on any sale to delever the company and reduce our net debt. We'll be flexible to different ways to do that. We agree it will be a deleveraging event and we're gonna give ourselves the flexibility to be open to reduce bank debt or buy back the bonds if there's an opportunity to do so. Got it. Okay. You know, I know it's not a done deal yet, but with, you know, When that closes, Matt, what does your focus turn to? What becomes the next priority? I know you referenced a few things, but, you know, how are you thinking about this once that's off your plate? Yeah, no, it's a great question, Steve. What I wanted to articulate in opening comments, and I did it, but Thanks for the opportunity to revisit it. We haven't stopped focusing on what we think are some of the great opportunities in the business. To be honest with you, General Aluminum is a great opportunity. The reality of it is we can't do everything at once. With the growth we're seeing across the business and anticipate into 2023, we just can't do it all. 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. you know, what we're doing on the engineered fastener 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. you know, our first area of focus is gonna be continuing to feed those parts of our business that will get an unfair share of our capital as we see them grow at super accretive margins, so. 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, you know, satisfied. you know, we're gonna pivot back to the balance sheet. You know, we're gonna 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. You know, if we can grow over a couple of years, approaching 20%, with, you know, or more, I'm sorry, more than that, you know, 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. 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. It's in our DNA, but I would put that, third on the list of the things I've mentioned. Got it. you know, I know that you guys did a lot of hard work on pricing actions to offset inflation last year. I think, Matt, when you said the heavy lifting is done, it was in reference to that. For the growth of 5%-10%, can you talk about what your expectation is for price versus volume in 2023? Yeah. You know, it's interesting. I really probably meant the restructuring more than the pricing, to be quite honest. 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. I think that a lot of those tough conversations have been had. That is a work in process because the market's a work in process. 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. 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. I would say that, you know, those corners of the business where we were, you know, seeing things that were more catastrophic, that, you know, burned through the P&L over the last 18 months, I think largely those have been addressed. Our work's not done there. The restructuring feels like it's mostly done. You know, that piece, until inflation moderates completely, that work is never done. Understood. That's great detail. Thank you. We do have a follow-up question from Dave Storms with Stonegate Capital Markets. Please proceed. Hey, thanks for taking my follow-up here. Just hoping you could give us a little more color on the M&A market. You touched on how that's currently going to be a backdrop for you. Just with the Aluminum Products exit, was that more of an opportunistic buyer, or is this a good time to be a seller? You know, kind of what are you seeing in, you know, the external growth front? Yeah. Well, I'll touch at a high level on General Aluminum. You know, 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 wanna do. The reality of it is, though, as I mentioned, it is, you know, we've, you know, we've got so many opportunities. I think we had to make some strategic decisions given the growth we're seeing on where we wanna allocate our capital. We felt there are some good strategic buyers in the marketplace who can do well with that business, as well as we can. It became, I think, an obvious place to try and harvest some money. That's very helpful. Thank you. 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. Great. Thank you very much. I know that there's a lot of noise, so to speak, in these comments in this press release, 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, we're prepared either way to move forward with a solid business plan there. 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. Thank you for your time today, and we really look forward to the first quarter call. Thanks. Thank you. This will conclude today's conference. You may disconnect your lines at this time. Thank you for your participation.