Good morning, and welcome to the Park-Ohio Q1 2024 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 in the company's 2023 10-K, which was filed on March 6, 2024, 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 under generally accepted accounting principles. For 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 Mr. Matthew Crawford, Chairman, President, and CEO. Please proceed, Mr. Crawford. Great. Thank you very much, and welcome to the Q1 of 2024 conference call. Thank you for joining. We're pleased with the performance of our company during the quarter, especially as it relates to our improved margins and our continued focus on managing improved cash flows. As most of you know, we've spent most of the last several years driving initiatives that would improve the quality of earnings across the businesses. These include commercial activity regarding pricing and exiting low or negative margin business, the restructuring of several high-cost locations, renewed focus on growing our highest margin products and services, and the sale of non-core assets. During the Q1, we began to see a clearer picture of the momentum of those efforts and are proceeding towards a leaner, less capital-intensive, and more predictable business. I particularly want to acknowledge the efforts of Supply Technologies. Supply Tech has led the way as an agile supplier to many of the world's most demanding and often volatile industries and customers, while driving continuous improvement initiatives deeper into the organization and investing aggressively in new productivity tools in both data intelligence and operating execution. Additionally, the innovative ideas in the fastener manufacturing group continue to bring important value-driven solutions to an increasing set of global customers, particularly in the EV space. ACG's relentless focus on operations after several years of consolidations, which are now substantially complete, have not only created more improved and consistent performance, but allow us to quote new business and new products from a position of lower cost and world-class execution. Our product portfolio is diverse and, in many cases, agnostic to the powertrain of the vehicle. EPG continues to benefit from strong backlogs and a growing and impressive aftermarket and service business, precipitated by a massive installed base globally and trusted brands in the industrial space. We're striving to improve execution in the new equipment business, where we've seen substantial turnover in key knowledge areas and expect improvements as we head into the latter part of the year. I remind us all that this group should and will be a leader in accretion to our consolidated margins. For the balance of the year, we anticipate improved year-over-year comparisons and annual growth in line with our guidance. Stable demand, generally combined with strong aerospace and defense volumes, plus solid backlogs in the long cycle businesses, support that assumption. Additionally, we believe macro trends and renewed spending in infrastructure, EV, and semiconductor will play a larger role in our success towards the latter part of the year. With that, I'll turn it over to Pat to cover the quarter results. Thank you, Matt. Our Q1 results were a positive start to the year. Our revenues were in line with our projections, and operating income, earnings per share, and EBITDA exceeded our internal expectations. Sales in the quarter totaled $418 million, and customer demand continued to be strong in most key end markets. The strong end market demand, along with operational improvements, drove the strong performance during the quarter. Our consolidated gross margin was 17.1% in the quarter, up 120 basis points from the Q1 of last year. This is the highest level of gross margin in over 5 years. Also, our adjusted EPS of $0.85 per share was up 18% compared to $0.72 a year ago, and EBITDA, as defined, improved 19% year-over-year. Consolidated operating income improved 19% to $24 million compared to $20.2 million in the Q1 of last year. Operating income margins improved 90 basis points year-over-year to 5.7% of net sales. The strong Q1 operating income performance was driven by record profit performance in Supply Technologies and operating income improvement in Assembly Components. SG&A expenses were $47 million compared to $45 million a year ago, with the increase driven by an increase in personnel costs. Interest costs increased to $11.9 million during the quarter, compared to $10.7 million last year, driven by higher interest rates in the current year, partially offset by lower average borrowings outstanding in the quarter. Our effective tax rate was 25% in the quarter. Foreign tax credits and research and development credits helped to offset the impact of higher foreign tax rates. We expect our full-year effective tax rate to range between 23% and 25%. GAAP earnings per share from continued operations for the quarter improved 36% to $0.83 per diluted share, compared to $0.61 last year. On an adjusted basis, our earnings per share was $0.85, compared to $0.72 a year ago, an increase of 18%. Our EBITDA as defined totaled $38 million in the Q1. On a trailing 12-month basis, our EBITDA as defined was $141 million, resulting in improved leverage ratios compared to year-end. During the quarter, we generated improved year-over-year operating cash flows and free cash flow. We continue to implement working capital initiatives, which will drive improved free cash flow for the remainder of the year. Our liquidity at the end of the Q1 was $168 million, which consisted of approximately $62 million of cash on hand and $106 million of unused borrowing capacity under our various banking arrangements. As we previously announced, S&P Global upgraded our credit ratings during the quarter due to our improved operating performance and reduced financial leverage. Also, during the quarter, we announced the acquisition of EMA GmbH. EMA strengthens our global induction heating expertise throughout Europe and expands both our portfolio of induction equipment brands and our aftermarket service capabilities. We have commenced the integration of EMA into our existing operations in Germany, and we expect EMA's annual revenues to exceed $30 million and their results to be accretive to our operating margins and our earnings per share. Turning now to our segment results. In Supply Technologies, net sales were $197 million during the quarter, up slightly from a year ago, reflecting continued strong demand in most key end markets, and led by a 28% increase in our aerospace and defense business and strong growth in our industrial supply business. During the quarter, demand was lower year-over-year in the heavy-duty truck, lawn and garden, and agricultural equipment markets, which partially offset this growth. We also achieved record sales in our fastener manufacturing business, which were up 15% from a year ago due to strong customer demand for our proprietary products throughout North America and Europe. Operating income in this segment totaled a record $19.5 million compared to $14 million a year ago. Operating margins were also a record at 9.9%, up 270 basis points from 7.2% a year ago. The higher profitability in the quarter was driven by an increase in sales from higher-margin products, lower operating costs in our supply chain business, and sales growth in our, in our proprietary fastener business. Our focus on reducing product costs, location, profit, and improvement initiatives, and expanding our higher-margin industrial supply and proprietary fastener products impacted the Q1 and will continue to positively affect future margins. In our Assembly Components segment, sales for the quarter continued to be strong across all product categories and totaled $107 million. This compared to the sales of $110 million a year ago, with the decline primarily due to lower unit volumes in our fuel rail and extruded rubber products businesses. Despite the lower sales levels, segment operating income increased 18% to $8.6 million from $7.3 million a year ago. Segment margins were also higher in the current year at 8%, compared to 6.6% last year, an increase of 140 basis points. The improvement in profitability was driven by ongoing profit improvement initiatives, improved product pricing, and the benefit from completed plant consolidations. In this segment, we continue to focus on improving operational execution in each of our manufacturing plants and are implementing other profit improvement actions, including expanding our rubber mixing capacity and increasing plant floor automation, which will positively impact our operating margins. In our Engineered Products segment, demand continued to be strong across most product brands and geographies. Q1 sales were $114 million, compared to $117 million a year ago. The slight decline in sales was driven by lower sales of new equipment, primarily in the U.S. and in Europe. During the quarter, our aftermarket revenue increased 16% year-over-year. New equipment bookings totaled approximately $40 million in the quarter, compared to average quarterly bookings of $43 million in 2023. Backlogs continued to be strong in this segment and totaled $151 million compared to $162 million last quarter. Revenues in our forged and machined products business also improved and increased 4% year-over-year. During the quarter, operating income in the segment was $3.5 million, compared to $5 million a year ago, and on an adjusted basis, operating income was $3.8 million in the quarter, compared to $7 million last year. The profitability decline year-over-year in this segment was driven by lower new equipment sales in our induction business, lower sales volumes isolated in our forging operation in Arkansas, and higher operating costs to complete new equipment. We are taking aggressive actions to improve profitability in this segment, including implementing initiatives to improve supply chain challenges experienced during the quarter and to improve the production throughput on new equipment orders. And finally, corporate expenses totaled $7.6 million during the quarter, compared to $6.9 million a year ago, driven by higher personnel costs. With respect to our full year 2024 guidance, we continue to expect year-over-year revenue growth in the mid-single digit range. We also continue to expect year-over-year improvement in adjusted earnings per share and EBITDA as defined. Now I'll turn the call back over to Matt. Thanks, Pat. Appreciate the look at the Q1, and now we'll open the line up for questions. Thank you. We will now be conducting a question and answer session. If you would like to ask a question, please press *1 on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press *2 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. One moment, please, while we poll for your question. Our first questions come from the line of Dave Storms with Stonegate. Please proceed with your questions. Morning. Morning. Just hoping to, sorry, it looks like Supply Tech, you know, really was the flag bearer for everything that, you know, can go right for you guys. How easy or challenging will it be to map, you know, some of those process improvements onto Assembly Components and Engineered Products to see the same results there? Yeah, you know, it's not uncommon, Dave. I know you've looked at the business over a number of years. You know, I often say a great industrial holding company is full of great industrial businesses, and we have a number of great industrial businesses. Underneath the hood, each of them sort of have their own particular business cycle. So having some volatility between the group and having different leadership profiles is not uncommon to us. And you're absolutely right, Supply Tech, both on the manufacturing and the distribution side, had really performed well for, you know, the better part of a couple of years here. So I use the word agile in my comments purposefully because it seems like every month there's a different challenge. But, again, I think we're on a sustainable path there. You know, as I mentioned, ACG, I think, is in a really good place relative to the stability of their business. We invested heavily in the restructuring of that business. We've put ourselves in a great position from an operating excellence standpoint. It reflects itself in productivity, you know, operating efficiencies. We, I think, put ourselves in a great spot there. So I think the tale of the tape there is new business, an area of a tremendous focus now that we have this operating model that we believe is best in class. So, you know, that'll play out, and I think we'll see accretion there as we build that business or continue to build that business going forward. So I think from an operational perspective, my point is we have mapped, to use your word, you know, a lot of the success that we hope to bring to the business after a difficult couple of years, and now it's about building it. Engineered Products, again, often historically has been the leader in the business, has had its own set of challenges, you know, related to a few different things. One is some consolidations there, where we consolidated businesses, which can be a challenge. That business relies heavily on know-how and knowledge, some of which we lost during the changeover. So again, the business principles there around unique assets, strong aftermarket business, and tremendous brands in the new equipment space, particularly in electrification, industrial electrification, as well as products that are heavy in aerospace and defense. The market's there, the backlogs are there. I think it's a, you know, to use your word again, mapping over some of the operational excellence that we've begun to see in the first 2 units, has just taken a little more time than we thought. Understood. That's very helpful. Thank you. When, and you mentioned a little bit in your response there, that you're working on, you know, obviously, new business in automotive, AC. What does that sales cycle look like? You know, now that we're in a more normal world than we were, you know, a couple of years ago, is the, you know, contact to contract cycle trending shorter, you know, and any insight you can give us there would be very helpful. Yeah, no, I think there's, I mean, there's 2 types of, at least 2, I'll just use 2, really 3 types of new business in the automotive space on the OE side. I think one is replacement business. I think we're extremely well positioned on key programs to achieve replacement business, given where we are in terms of productivity, scrap rates, and all the things that drive the performance of an automotive supplier. So I like where we are there. I think there's new business in the space that we participate in, you know, extrusion, molding, et cetera. And again, I think we're particularly well suited there, given the consolidation and the productivity improvements we've made over the last couple of years. So I think, again, I think we're, we're—those are sort of 2 of the areas I think we're primed for success in the near term. I think that the third is launching new products, and that's a little longer cycle. So, you know, those first 2, you know, I see as being impactful, if not later this year, certainly into 25 and 26. You know, developing new products and launching them, you know, typically to be material, could take a couple more years. So no, but the bottom line is, we expect that we didn't just start this new business cycle, particularly not in categories 1 and 2, but I would anticipate us to outperform... car builds, beginning in 2025 in terms of growth. Understood. That's very helpful. Thank you for taking my questions, and good luck in Q2. Thanks, Dave. Thank you. Our next questions come from the line of Steve Barger with KeyBanc Capital Markets. Please proceed with your questions. Morning, everyone. Hey, Steve. It's actually Christian Zilo on for Steve. Morning. Morning, how are you? So your gross margin this quarter looks to be the highest since 3Q 2016. Very impressive. Can you just walk us through what enabled that? Was that due to pricing in your portfolio or more on the material cost side? And do you think this is a sustainable new level? Christian, this is Pat. You know, as I mentioned in the script, Supply Tech really led the operating income performance during the quarter, as a result of, you know, a higher level of sales in higher margin products. I mentioned aerospace and defense, increased year-over-year significantly. I mentioned the growth in our industrial products business, which typically carries higher margins. So overall, mix was a big factor in the increase. In addition, the growth that we saw in our proprietary fastener products, which we expect to continue. Really nice margin relative to the products that they are implementing around the world, relative to EV and other applications that use our self-piercing and clinch products. So there was a lot that impacted Q1. Mix obviously has a lot to do with it, but we were very pleased with where margins have been. A lot of heavy lifting went on over the last 2 years around pricing with customers, around reducing product costs, and those initiatives will continue as we continue to drive our operating margins in that segment. In the automotive segment, we saw a nice improvement year-over-year in our operating income. You know, a lot of that has to do with the consolidations that were completed, as Matt mentioned. You know, in the early part of the completion of those consolidations, there are additional costs, startup costs, training costs, inefficiencies that occur on the plant floor that we're getting over now. We're starting to see those improvements occur and throughput increase, which obviously helps drive an increase in our operating margins. Matt mentioned our engineered products group and some of the challenges that we faced. We expect margins to continue to improve. You know, a number of initiatives are in place. We did see nice improvement in our forging plant in Canton, which historically has been a higher margin business. We see a lot of new growth opportunities in our capital equipment business as it relates to forging equipment, which carries a higher margin. So, we're pleased with where we're at 17.1% overall, and hoping to be able to continue that as we get through the rest of the year. Great, Chris, I would only add, there's, you know, 2 layers of improvement, both inside some of the businesses, particularly Supply Tech, and on the consolidated gross margins. You know, one is a structural shift to higher margin businesses. I mean, we're trying to give the businesses that have the highest margins, their unfair share of capital. And that includes not only investing in the right places, in this particular case, we're benefiting from seeds we planted in Aerospace and Defense, you know, 2, 3, 4, 5 years ago. So it's going well to pay off. It also includes, you know, exiting low margin businesses where we don't provide a value set that we can get paid for. So, you know, I think there's a significant amount of sort of structural work here. There's no question, Supply Tech performed at a very strong level. So, I think that our focus, particularly in auto, on the continuous improvement, is continuing to benefit us. So, you know, again, we're gonna see market leadership inside our business from different businesses at different times, unquestionably. And right now, certainly the leader was in Supply Tech. But, you know, we believe at the end of the day, we're building a more stable, simpler, sustainable business model and less capital intensive. So I hope that helps. Great. Yeah, very helpful. I guess just sticking with Supply Tech, and I know part of this is the improvements you guys have made over the last few years, and part of it was the mix. But just how much of the margin expansion outside of that low 7% range was mix driven? And should we expect that to continue or a step down for the balance of the year? Just trying to think of the model here. Yeah, Christian, I would say most of the improvement, you know, north of, say, 70%, was a result of mix. But on the other hand, as we get through the rest of the quarter, we've got initiatives to continue to reduce our product costs, which will help offset the change in mix going forward. So, I'd like to believe we can continue at that 9.9% operating income margin, but anything that takes us north of 8% will generate a nice comparison year-over-year. But we're gonna continue to drive towards a, you know, a margin that looks closer to 10%. ... We're, I mean, we're again trying to grow our best parts of our business from a quality of earnings standpoint more quickly. Again, aerospace and defense is a good example. Yes, in the quarter that gave us great mix, maybe optimal mix, but so it is a tough comp. There's no question if that's your point. It is. Having said that, we've made changes that, again, we think have taken the business to a higher level. Great. And then just switching gears to Engineered Products. I know in the past you've said as Engineered Products goes, Park-Ohio goes. But as we look at the business, I mean, is there a business line in EP that's a drag on margins? And as you look at the entire Engineered Products portfolio, is there any way to structurally improve the business, like you guys recently did with the Assembly Components? We need to break the business apart a little bit to think about that. Number one, we have made a tremendous amount of decisions over the last few years to try and improve our business for the long term. I think the most well-known example is the consolidation of Kropp Forge into Canton. Maybe a lesser-known example is the expansion of Southwest Steel Processing with the second forge line. You know, these decisions were made with the long-term health and interest of the business in mind, and I think they were made at the right time. Again, these are businesses where centers of excellence, access to trained labor, these are the kinds of decisions that build the business long term. Having said that, these are very difficult operating decisions and consolidation decisions at a time where, you know, turnover was much higher than usual, retirements and loss of knowledge, much higher than usual. So I think, benefiting from those decisions where we sort of worked that through in the automotive business over a couple of years, these are more challenging opportunities. Having said that, these are some of our most stable customers and products. These are businesses that you know, tend to be very unique assets and capabilities. So, you know, we're not losing business. The backlogs are strong, and we need to perform against them. Separately, when I think about the equipment business where we added EMA recently, you know, the aftermarket business, as I mentioned, is a bright spot and continues to be a bright spot. And the macro trends around defense and aerospace and infrastructure will benefit that business as well as the forge business in an outsized way. So we continue, I think, to be a premier supplier of these products in a world that's electrifying. So having said all that, you know, the new equipment part of the business, as I mentioned in my comments, is difficult right now. Again, for some of the same reasons at the forge, combined with the fact that, you know, the cycle time on some of these orders, whether it be a forging press or induction heater, you know, could be, you know, from order to ship or your installation could be 18 months, 16 months, 14 months. It takes time to catch up. It takes time to, you know, optimize, from, you know, both a pricing and an execution standpoint. So, we have strong conviction on the macro trends. We have strong convictions on the decisions we've made. And we have strong conviction on the bones of the business from backlogs and installed base and aftermarket. It's just, you know, there's a smaller part of the business that I've mentioned in a couple areas, places where we consolidated or grew rapidly in forging or new equipment, which has been difficult and will continue to be, and we're gonna get better every day. But that's the nature of a diversified portfolio. Great. Really appreciate the answer. I've got one last one, then I'll pass it back. Just, Okay. With the FY 2024 guide, I know you guys added EMA, but does your M&A pipeline enable upside to your guidance, or should we think about this year as primarily organic-driven top line? And then in the quarter, should we think about a couple of points of price and then the difference being volume for the overall sales performance? Thanks again for the time. I'll let Pat take the latter. I'll take the former. You know, we tend not to build acquisitions into our model. You know, so I think that always has some upside to it. You know, we're not depending on future acquisitions to meet the goals we've laid in front of you. Hard stop. So that is opportunistic. We've tended to do you know, deals fairly often, so I would not want you to leave the call thinking that we're not out there, thinking what's gonna be beneficial for our long-term success. We always are. Having said that, you know, we're also tuned into managing our cash flow, managing our debt levels, and you know, so we're trying to walk and chew gum at the same time. But to be clear, any acquisition that you would see us complete for the remainder of the year should be accretive to our goals and should be something that you should be awfully excited about, or we would be awfully excited about, which means you, too. Thank you. Our next question comes from the line of Guillaume Abibi with JP Morgan. Please proceed with your questions. Thank you, good morning. I guess my first question is, good morning. You talked quite a bit about the operational improvements you've put in place and across the businesses over the last several years. You know, margins expanded, you know, quite nicely in a flat revenue environment. I guess, you know, when revenue increases, how should we be thinking about the operating leverage and the business over the longer term? Really, what I'm trying to get at is, what's the margin opportunity set in a higher revenue environment? Yeah, this is Pat. Clearly, we focus on that flow-through at a higher level of revenue. And we'd like to believe that that flow-through, relative to our operating income margins, would be north of 15%. But we have such a wide range of products and plants, and so often that, you know, sometimes could be higher, sometimes can be lower. But in general, you know, we expect a flow-through of at least 15% in each of the businesses as revenues expand. 'Cause our, especially in our manufacturing businesses, where there's a high level of fixed costs, we've positioned ourselves nicely around the world in our manufacturing plants to have the capacity to grow revenues without growing the fixed cost makeup of the business. So that'll enhance the flow-through as revenues increase. Thank you. That's helpful. I guess maybe a follow-up, you know, to that. I guess, as it relates to, you know, costs, I think, you know, we think you talked about trying to make the business less capital intensive. From the capital intensity perspective, are we thinking about more, more pure CapEx, or, you know, would we expect to see lower working capital in the system and other layers of costs, you know, lower as we move forward here? Clearly, on the CapEx side, you know, we expect, you know, our capital to be spent in, in certain pockets of the business, especially where we're seeing growth. For the current year, we expect to approximate $25 million in CapEx, which is, you know, compared to historic levels, much less. Much of our capital being spent this year is on these growth opportunities and in technology. But going forward, I would expect our CapEx to be lower than $25 million. We continue to focus on reducing our working capital investment in each of our business and have initiatives to continue to pull inventory down, accelerate customer payments, manage our days to pay accordingly, which will help us drive an increase in our free cash flow this year. All of those things, you know, under the current model that we've built, are less than historic levels. So, when you think about working capital, and you think about supplier lead times, you know, over the last couple of years, between freight issues and import issues and supplier delay, expanding lead times, we had an embedded level of inventory that exceeded $50 million. We haven't worked that all out of the system yet, so we continue to work hard on bringing those lead times with suppliers down to their most efficient levels. We try to figure out ways to push inventory back to the suppliers to reduce our level of inventory that we're carrying. All of those things will benefit our free cash flow going forward. Thank you very much. That's all I had. I'll pass it on. Thanks, Guillaume. Thank you. We have reached the end of our question and answer session. I would now like to turn the floor back over to Matthew Crawford for any closing remarks. Great. Thank you very much. Thanks for your time and attention and investment in our company. Again, we look forward to a year of improving results and also a year of stable outlook. So we appreciate your time. Thanks. Thank you so much. This does conclude today's teleconference. We appreciate your participation. You may disconnect your lines at this time. Enjoy the rest of your day.