Park-Ohio Holdings Corp. (PKOH): Business Model Canvas [11-2024 Updated]

Discover how Park-Ohio Holdings Corp. (PKOH) navigates the complex landscape of supply chain management and engineered products through its innovative Business Model Canvas. This comprehensive framework highlights the company's strategic

• partnerships
• key activities
• value propositions

and more, showcasing its commitment to quality and efficiency across various industries. Dive deeper to explore how PKOH effectively meets the needs of sectors ranging from aerospace to automotive.

Park-Ohio Holdings Corp. (PKOH) - Business Model: Key Partnerships

Collaborations with suppliers and manufacturers

Park-Ohio Holdings Corp. maintains strategic collaborations with various suppliers and manufacturers to enhance its supply chain capabilities. In the nine months ended September 30, 2024, the company reported net sales of $1,267.8 million, which reflects its reliance on effective supplier partnerships to drive revenue. The cost of sales during this period was $1,050.9 million, indicating a gross margin of 17.1%.

To support its operations, Park-Ohio has a revolving credit facility of $405 million, which includes a $40 million Canadian subcommitment. This financial arrangement helps the company manage its supplier payments and operational costs.

Partnerships with OEMs in various industries

Park-Ohio collaborates with Original Equipment Manufacturers (OEMs) across several industries, including aerospace, automotive, and heavy-duty trucks. The Supply Technologies segment generated $594 million in sales for the nine months ended September 30, 2024, representing a significant portion of the company’s total revenue. The company’s partnerships with OEMs are crucial for supplying production parts and materials, which are vital for maintaining operational efficiency and competitiveness in the market.

During this period, the Engineered Products segment also saw an increase in net sales to $364.8 million, showcasing the effectiveness of these OEM partnerships in driving growth.

Strategic alliances for supply chain optimization

Park-Ohio has established strategic alliances aimed at optimizing its supply chain processes. The company reported segment operating income of $72.2 million for the nine months ended September 30, 2024, an increase of 8.7% compared to the previous year, which underscores the effectiveness of these alliances. These alliances allow Park-Ohio to leverage best practices in supply chain management, enhance operational efficiencies, and reduce costs.

In addition, the company has implemented Total Supply Management™, which includes services such as engineering support, supplier selection, and just-in-time delivery. This comprehensive approach is designed to streamline operations and improve service delivery to its customers across various industries.

Partnership Type	Details	Financial Impact (2024)
Supplier Collaborations	Partnerships with various suppliers to enhance supply chain capabilities.	Net Sales: $1,267.8 million; Cost of Sales: $1,050.9 million
OEM Partnerships	Collaboration with OEMs in aerospace, automotive, and heavy-duty trucks.	Supply Technologies Sales: $594 million; Engineered Products Sales: $364.8 million
Strategic Alliances	Alliances aimed at optimizing supply chain processes.	Operating Income: $72.2 million; Segment Operating Income Growth: 8.7%

Park-Ohio Holdings Corp. (PKOH) - Business Model: Key Activities

Supply chain management and logistics

Park-Ohio Holdings Corp. emphasizes a robust supply chain management system which is critical for meeting customer demands efficiently. In the first nine months of 2024, total net sales were $1,267.8 million, reflecting a slight decrease of 0.2% compared to $1,270.4 million in the same period of 2023. The company operates a diverse supply chain that supports its various business segments, including Supply Technologies, Assembly Components, and Engineered Products. The Supply Technologies segment alone reported net sales of $594.0 million for the nine months ended September 30, 2024, an increase from $585.9 million in 2023.

Manufacturing of engineered products and components

The manufacturing capabilities of Park-Ohio are centered around engineered products and components. The Engineered Products segment reported net sales of $364.8 million for the nine months ended September 30, 2024, compared to $353.7 million in the previous year, marking a growth in this area. The segment's operating income was $14.6 million, with an operating margin of 4.0%. Additionally, the company has engaged in strategic acquisitions to bolster its manufacturing capabilities, such as the acquisition of EMA Indutec GmbH for $11.0 million.

Continuous improvement and innovation in product offerings

Continuous improvement is a fundamental aspect of Park-Ohio's operations. In the first nine months of 2024, the company recorded $2.4 million in restructuring and acquisition-related charges, indicating an ongoing commitment to refining its operations. The gross margin improved to 17.1% in 2024 from 16.3% in 2023, driven by profit enhancement initiatives. The company's focus on innovation is reflected in the increasing demand for higher-margin products, particularly in the aerospace and defense sectors, which has positively impacted sales.

Key Activities	2024 Performance	2023 Performance
Net Sales	$1,267.8 million	$1,270.4 million
Engineered Products Segment Sales	$364.8 million	$353.7 million
Supply Technologies Segment Sales	$594.0 million	$585.9 million
Operating Income (Engineered Products)	$14.6 million	$15.3 million
Gross Margin	17.1%	16.3%

Park-Ohio Holdings Corp. (PKOH) - Business Model: Key Resources

Advanced manufacturing facilities and equipment

Park-Ohio Holdings Corp. operates advanced manufacturing facilities that are pivotal in delivering high-quality products. The company has made significant capital investments to enhance its manufacturing capabilities, with capital expenditures reaching approximately $22.3 million in the nine months ended September 30, 2024, aimed at increasing capacity and maintaining existing operations.

As of September 30, 2024, the company reported total debt of $663.5 million, which includes obligations tied to its manufacturing facilities. This financial structure supports ongoing investments in technology and equipment necessary to sustain competitive advantage in the market.

Skilled workforce with engineering expertise

Park-Ohio's success is largely attributed to its skilled workforce, particularly in engineering and manufacturing roles. The company emphasizes continuous training and development, which is reflected in its operating income. For the nine months ended September 30, 2024, Park-Ohio reported operating income of $72.2 million, up from $66.4 million in the same period in 2023, indicating improved productivity and efficiency.

The company’s focus on attracting and retaining talent is vital, especially in specialized areas such as aerospace, automotive, and industrial equipment manufacturing. This sector-specific expertise enables Park-Ohio to innovate and enhance product offerings, thus driving revenue growth.

Strong customer relationships across multiple sectors

Park-Ohio maintains strong customer relationships across diverse sectors, including aerospace, automotive, and medical devices. In the nine months ended September 30, 2024, the company generated net sales of $1,267.8 million, a slight decrease of 0.2% compared to the previous year, indicating resilience in customer demand despite market fluctuations.

The company’s Supply Technologies segment, which provides Total Supply Management™ solutions, reported net sales of $594.0 million for the same period, showcasing its ability to cater to various industries effectively.

Furthermore, Park-Ohio's customer-centric approach is evidenced by its segment operating income in the Supply Technologies segment, which increased to $59.0 million, up 31% from the previous year. This growth underscores the value derived from strong customer partnerships and tailored solutions that meet specific industry needs.

Key Resource	Details	Financial Impact
Advanced Manufacturing Facilities	Capital expenditures of $22.3 million for enhancements	Total debt of $663.5 million supporting operations
Skilled Workforce	Increased focus on training and engineering expertise	Operating income rose to $72.2 million (2024)
Customer Relationships	Strong demand across multiple sectors, including aerospace and automotive	Net sales of $1,267.8 million; Supply Technologies segment sales of $594.0 million

Park-Ohio Holdings Corp. (PKOH) - Business Model: Value Propositions

Comprehensive supply chain solutions via Total Supply Management™

Park-Ohio Holdings Corp. offers comprehensive supply chain solutions through its proprietary Total Supply Management™ system. This system integrates various aspects of supply chain management, aiming to enhance efficiency and reduce costs for clients. In the first nine months of 2024, the Supply Technologies segment generated net sales of $594.0 million, reflecting a year-over-year increase of 1% compared to $585.9 million in the same period of 2023.

High-quality, engineered products tailored to customer needs

The company focuses on delivering high-quality, engineered products that meet specific customer requirements. For instance, in the Engineered Products segment, net sales reached $364.8 million for the nine months ended September 30, 2024, an increase of 3.1% from $353.7 million in the previous year. This growth is attributed to higher sales in both capital equipment and aftermarket parts, demonstrating Park-Ohio's commitment to product innovation and customer satisfaction.

Focus on fuel efficiency and emission reduction technologies

Park-Ohio is increasingly emphasizing fuel efficiency and emission reduction technologies across its product lines. This strategic focus is in line with market trends towards sustainability. The company reported a gross margin improvement to 17.1% in the first nine months of 2024, up from 16.3% in the same period of 2023, driven by enhanced operational efficiencies and a shift towards higher-margin products.

Metrics	2024 (9 months)	2023 (9 months)	Change (%)
Net Sales - Supply Technologies	$594.0 million	$585.9 million	1%
Net Sales - Engineered Products	$364.8 million	$353.7 million	3.1%
Gross Margin	17.1%	16.3%	5%

In summary, Park-Ohio Holdings Corp. leverages its comprehensive supply chain solutions, high-quality engineered products, and a strong focus on sustainability to create significant value for its customers, positioning itself competitively in the market.

Park-Ohio Holdings Corp. (PKOH) - Business Model: Customer Relationships

Long-term contracts with key clients

Park-Ohio Holdings Corp. engages in long-term contracts with key clients across various sectors, ensuring stable revenue streams. For instance, in the nine months ended September 30, 2024, the company reported net sales of $1,267.8 million, a slight decrease of 0.2% compared to $1,270.4 million in the same period in 2023. The decrease was primarily attributed to lower sales in the Assembly Components segment, while the Supply Technologies segment saw growth, indicating a diversified client base and contract stability .

Dedicated account management and customer support

To enhance customer relationships, Park-Ohio provides dedicated account management and customer support. The company reported segment operating income of $72.2 million for the nine months ended September 30, 2024, compared to $66.4 million in 2023, reflecting effective management and support services that contribute to customer retention and satisfaction .

Segment	Net Sales (2024)	Operating Income (2024)	Operating Income Margin (2024)
Supply Technologies	$594.0 million	$59.0 million	9.9%
Assembly Components	$309.0 million	$21.6 million	7.0%
Engineered Products	$364.8 million	$14.6 million	4.0%

Engagement through feedback and continuous improvement initiatives

Park-Ohio actively engages with its customers through feedback mechanisms and continuous improvement initiatives. The company's SG&A expenses increased by 5.3% to $142.3 million for the first nine months of 2024, compared to $135.1 million in 2023, reflecting investments in customer engagement and service quality . This focus on customer feedback has been essential for refining their service offerings and improving overall customer satisfaction.

Park-Ohio Holdings Corp. (PKOH) - Business Model: Channels

Direct sales to OEMs and end-users

Park-Ohio Holdings Corp. engages in direct sales to original equipment manufacturers (OEMs) and end-users across various sectors, including automotive, aerospace, and industrial markets. In the first nine months of 2024, the company's net sales totaled $1,267.8 million, a slight decrease of 0.2% compared to $1,270.4 million in the same period of 2023. The direct sales approach is supported by a diversified product portfolio, which includes engineered products and supply technologies.

Online platforms for customer engagement

In 2024, Park-Ohio has enhanced its online presence to facilitate customer engagement through digital platforms. These platforms allow for effective communication and interaction with clients, providing information on products and services, and enabling online orders. The company’s strategic focus on digital channels has become increasingly important as it adapts to changing market dynamics and customer preferences. While specific revenue figures from online channels are not disclosed, the overall digital transformation is expected to contribute positively to customer retention and satisfaction.

Trade shows and industry events for visibility

Park-Ohio actively participates in trade shows and industry events to enhance visibility and showcase its product offerings. In 2024, the company attended several key industry events, which serve as critical platforms for networking, brand recognition, and direct engagement with potential customers. Participation in these events is part of the company's marketing strategy and has proven beneficial, particularly in sectors like aerospace and defense, where personal relationships and trust are vital for securing contracts. The effectiveness of these channels is reflected in the company’s ability to maintain a competitive edge in a challenging market environment.

Channel	Details	Impact on Sales
Direct Sales	Net sales of $1,267.8 million in 2024	0.2% decrease from 2023
Online Platforms	Enhanced digital engagement for orders and information	Positive contribution expected
Trade Shows	Active participation in key industry events	Increased visibility and networking opportunities

Park-Ohio Holdings Corp. (PKOH) - Business Model: Customer Segments

Aerospace and defense industries

Park-Ohio Holdings Corp. serves the aerospace and defense sectors by providing engineered products and supply chain solutions. In the nine months ended September 30, 2024, net sales in this segment increased significantly, contributing to overall company growth. The demand for high-quality components in aircraft manufacturing and defense systems has driven revenue, with net sales reaching approximately $594 million in this sector during the same period, reflecting a year-over-year growth of 1%.

Automotive and heavy-duty truck manufacturers

The automotive sector remains a critical customer segment for Park-Ohio, particularly in the heavy-duty truck manufacturing space. In the nine months ended September 30, 2024, net sales from automotive-related products accounted for about $309 million, though this represented a decrease compared to the previous year. The company’s focus on fuel efficiency and emissions reduction technologies aligns with industry trends, making them a preferred supplier for OEMs and aftermarket services.

Industrial equipment and consumer electronics sectors

Park-Ohio also targets the industrial equipment and consumer electronics sectors, providing components and supply chain management services. The company recorded net sales of $124.4 million in engineered products for the nine months ending September 30, 2024, up from $117.6 million in the same period in 2023. This growth is attributed to robust demand for high-tech components and the company's ability to adapt to market changes efficiently.

Customer Segment	Net Sales (9 months ended Sept 30, 2024)	Year-over-Year Change
Aerospace and Defense	$594 million	+1%
Automotive and Heavy-Duty Trucks	$309 million	-7%
Industrial Equipment and Consumer Electronics	$124.4 million	+5.8%

Park-Ohio Holdings Corp. (PKOH) - Business Model: Cost Structure

Manufacturing and operational costs

In the nine months ended September 30, 2024, Park-Ohio Holdings Corp. reported total costs of sales amounting to $1,050.9 million, a decrease from $1,063.1 million in the same period in 2023. This reduction was attributed to ongoing profit improvement initiatives despite the overall decline in net sales, which were $1,267.8 million compared to $1,270.4 million in 2023.

The gross margin improved to 17.1% in 2024 from 16.3% in 2023, indicating enhanced operational efficiency.

Research and development expenditures

Research and development expenditures have not been explicitly detailed in the available data for the nine months ended September 30, 2024. However, the company continues to invest in initiatives aimed at enhancing product offerings and operational efficiency, which is reflected in the $2.1 million recorded in restructuring and other special charges during the same period.

Marketing and sales expenses

Marketing and sales expenses, encapsulated within selling, general, and administrative (SG&A) expenses, totaled $142.3 million for the first nine months of 2024, up from $135.1 million in 2023. This increase of 5.3% as a percentage of net sales rose to 11.2% from 10.6% in the previous year, largely driven by inflation and increased employee costs.

During the third quarter of 2024, SG&A expenses were $47.8 million, representing an increase of 11.2% compared to $43.0 million in the third quarter of 2023.

Cost Structure Component	2024 (in millions)	2023 (in millions)	Change
Cost of Sales	$1,050.9	$1,063.1	($12.2) (-1.1%)
Gross Margin	17.1%	16.3%	+0.8%
SG&A Expenses	$142.3	$135.1	+$7.2 (+5.3%)
SG&A as % of Net Sales	11.2%	10.6%	+0.6%
Restructuring Charges	$2.1	$6.6	($4.5) (-63.6%)

Park-Ohio Holdings Corp. (PKOH) - Business Model: Revenue Streams

Sales from Supply Chain Services and Management

In the nine months ended September 30, 2024, the Supply Technologies segment generated net sales of $594.0 million, compared to $585.9 million in the same period of 2023, reflecting a year-over-year increase driven by strong demand in key markets such as aerospace and defense.

The segment operating income for Supply Technologies during this period was $59.0 million, which is a 31% increase from $45.0 million in 2023. The operating income margin improved to 9.9% from 7.7% in the prior year.

Product Sales from Engineered Components

For the Engineered Products segment, net sales reached $364.8 million in the nine months ended September 30, 2024, compared to $353.7 million in the same period of 2023, marking an increase attributed to higher sales of new capital equipment and aftermarket parts.

The segment's operating income was $14.6 million, with an operating income margin of 4.0%. This reflects a slight decrease in operating income compared to $15.3 million in 2023, attributed to higher operating costs in certain product lines.

Contracts and Recurring Revenue from Long-Term Partnerships

Recurring revenue streams from long-term contracts contributed significantly to overall sales. The company reported contract assets totaling $55.1 million as of September 30, 2024, down from $59.9 million in December 2023. This indicates a slight decrease in recognized revenues in advance of billing, reflecting ongoing project completions and customer engagements.

Additionally, the company reported contract liabilities of $46.5 million as of September 30, 2024, which represents deposits received from customers prior to revenue recognition, down from $53.9 million at the end of 2023.

Segment	Net Sales (2024)	Net Sales (2023)	Operating Income (2024)	Operating Income Margin (2024)
Supply Technologies	$594.0M	$585.9M	$59.0M	9.9%
Engineered Products	$364.8M	$353.7M	$14.6M	4.0%

Updated on 16 Nov 2024

Resources:

1. Park-Ohio Holdings Corp. (PKOH) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of Park-Ohio Holdings Corp. (PKOH)' financial performance, including balance sheets, income statements, and cash flow statements.
2. SEC Filings – View Park-Ohio Holdings Corp. (PKOH)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.