and the Board of Directors of the Board of Directors of the Board of Directors of the Board of Directors This increase was partially offset by lower interest rates on our revolving credit facility during the quarter. Our effective income tax rate was approximately 17% in the quarter. The favorable effective tax rate year-to-date was due by federal research and development tax credit benefits estimated for the year. We expect our full year effective income tax rate to range between 17% and 20%. Gap earnings per share for the quarter increased 30% year over year to $0.87 per diluted share. On an adjusted basis, earnings per share increased 24% to $0.93 per share compared to $0.75 in the second quarter of last year. During the quarter, cash flow from operations was $9 million, an improvement of $23 million compared to a year ago. The cash flow improvement was due to higher income levels and our ongoing efforts to reduce working capital in each business. Capital spending totaled $11 million in the quarter, which included investments in information systems, automation equipment, which will drive improved plant floor efficiencies, and growth capital. We expect our full year CapEx to be approximately $35 to $40 million. Our liquidity continues to be strong and totaled approximately $189 million at the end of the quarter, which consisted of $48 million of cash on hand and $141 million of unused borrowing capacity under our various banking arrangements. Turning now to our segment results, in supply technologies, net sales increased 12% and totaled a record $209 million during the quarter compared to $187 million in the second quarter of last year. Higher sales were driven by strong customer demand in most canned markets including semiconductor, AI data center, power sports, aerospace and defense, heavy duty truck, and agricultural and industrial equipment end markets. Our supply chain business continues to benefit from increasing demand in the semiconductor, electrical, and AI data center sectors, which in total increased 29% year over year. In response to the growing demand trends in these interrelated end markets, We are expanding our global service center footprint in support of key customers and the expected demand for our supply chain services over the next several years. In addition, aerospace and defense demand continues to be strong and increased 10% during the quarter. Segment operating income in the second quarter was $19 million, an increase of 13% year over year, and operating margins were 8.8% compared to 8.7% a year ago. We continue to be on track to open our new state-of-the-art North American Distribution Center in the third quarter of this year. We are confident that this facility will be a best-in-class service center operation with automated sorting and kitting and additional value-added services for our customers. We expect to see the margin benefits of this strategic investment beginning in 2027. Our faster manufacturing business performed well in the quarter as net sales grew 6% year-over-year. Global customer demand for our proprietary products continues to grow, resulting from the expanded use of lightweight materials and increased global production of EV and hybrid vehicles. In our assembly component segment, sales for the quarter totaled $101 million compared to $95 million a year ago, an increase of 7%, driven by new product sales launched last year in each product line and higher customer demand from various automotive platforms. Segment operating income totaled $5.3 million compared to $5.6 million last year and increased from $4.9 million last quarter. We continue to focus on improving operating margins in this segment through improved margin flow through from revenue growth from new programs as well as through profit enhancement initiatives. Several operating initiatives such as increasing our rubber mixing production to support sales growth in our molded and extruded products and Planfor Automation Investments are expected to improve operating margins. In our engineered product segment, sales were a record $129 million, up 10% compared to last year and up 3% compared to last quarter. The increase in sales was driven primarily by sales of aftermarket parts and services and strong new equipment backlogs in our industrial equipment group, as well as higher sales in our forage and machine products group which were up 25% year over year. New equipment backlogs, I'm sorry, new equipment bookings totaled $66 million. Year to date, new equipment bookings totaled $153 million compared to $129 million for the same period last year, an increase of 19%. Our equipment backlog at the end of the second quarter increased 23% to $252 million compared to $205 million at the end of last year. The increased capital equipment sales in the quarter were driven by strong customer demand in several end markets including defense, electrical steel processing, oil and gas, agriculture, AI data center, and semiconductor markets. Both our industrial equipment and forging businesses continue to experience strong demand from both defense and AI data center related sectors. We provide several products in support of these growing end markets including transformer systems for IT equipment, induction furnaces for electrical steel processing, forgings for industrial turbines and various military applications, generators for emergency power, and various induction equipment used by data center cooling systems and for military applications, and forging presses used to produce munitions for military use. During the quarter, segment operating income improved 50% to $9 million compared to $6 million both a year ago and sequentially last quarter. The improved operating income resulted from strong sales in the quarter and improved operating performance across many locations, including our forged product locations. And finally, as we announced last quarter, as part of our ongoing portfolio optimization strategy, we engaged an investment banking firm to assist us with a formal review of strategic alternatives for our Southwest Steel processing business, including a potential sale or other transaction. SSP is part of our engineered product segment. This review reflects our continued focus on aligning capital and resources toward higher growth, higher margin opportunities across our portfolio. We expect the process to be completed toward the end of this year. Our revised outlook includes the impact of Southwest Steel which is expected to generate approximately $15 million in revenue and a net loss of approximately 50 cents per diluted share. The outcome of our strategic review with respect to this business represents potential upside to our current guidance. Now I'll turn the call back over to Matt.

Great. Thank you, Pat. Before I open up to questions, I just want to draw some attention to both Pat and I discussing sort of the broadening out of demand. We've been very intentional over the last several years, as all of you know, around aerospace and defense and the things related to data centers and electrical grid investments. But this quarter really demonstrated the depth and broadening of the demand cycle. Not only do we see growth for the year in all of our segments, but we also see it in most of our end markets and almost all of our geographies around the world. I think it's important to note that this is part of our intentional strategy, but we're also benefiting from, again, a broadening out of industrial demand throughout the world. With that, we'll open it up for some questions.

Thank you. We will now conduct a question and answer session. If you would like to ask a question, please press star 1 on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star 2 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. Once again, that's star one at this time. One moment while we poll for the first question. The first question comes from David Storms with StoneGate. Please proceed.

Good morning. Good morning, David. Thank you for taking my call. Good morning, David. Congrats on the quarter. Congrats on the guidance raise. Admittedly, I did want to start my first question maybe a little more in the Wheatston normally. Starting with assembly components, it was mentioned that you called out specifically fluid transfer on the release last night. I know that's been a big part of your business for a long time. Can you maybe spend a little more time just talking about some of the challenges and problems that you're solving in fluid transfer as it relates to the AI infrastructure build-out?

Let me sort of kick that off, and I'll let Pat discuss more specifically where we may have said that. But let me point out, we have a very strong brand and very strong market presence in multi-layer extruded hose where we're vertically integrated, mostly in the automotive space. Not entirely, but mostly in the automotive space. So there are numerous areas in our business where we touch on data centers and electrical infrastructure but that would not be one of them per se other than we are seeing more and more applications on the automotive side for fluid transfer for things like battery coolant technology and etc so cooling systems and so forth washer systems more advanced vehicles on the hybrid and EV side so we on that transition we are involved but I think more broadly, the themes that you're thinking about are less so.

One additional comment. When you think of our end markets, as Matt mentioned, automotive, heavy truck, industrial applications to transfer fuel, to transfer cooling fluids, to transfer hydraulic fluids, we also produce extruded plastic hose. for air and other types of fluids. There clearly is an opportunity to expand our makeup of customers outside of auto heavy duty truck to other industrial applications, which might include data center activities or other parts of the industrial economy. Understood.

I appreciate that clarification. I think I was putting the horse before the cart a little bit there. That's perfect. Thank you. As I'm looking then at the data center build-out writ large, obviously there's a lot of excitement. You're able to take advantage of that. Are you seeing any pushback? I'm starting to see a lot of headlines of local pushback to data centers. Are you seeing that come through, or is that more a headline?

I think the headlines are real. How it affects our business is I think a little bit differently than you may expect. We touch really upstream and downstream on this area. For example, when you think about people like Caterpillar who are providing mining equipment for rare earth minerals, when you think about a division of California supplying stationary power. I mean, there's a lot of upstream investments that I think candidly have multi-year backlogs. So I'm not sure that they're real focused right now on what the latest sort of political headline is. Those are really durable opportunities. I also think in some of the build out for some of these data centers are also already commissioned. I'm gonna call these sort of the midstream investments if you will, to steal a term from the energy sector. switch gears, transformers, fasteners that really build out these things. I would tell you those are ongoing. That might be affected over time by some of those headlines, but again, there is a multi-year catch-up period going on right now for what just has not been built. I think you probably have watched this play out with Intel down near Columbus I mean that's multi years behind schedule so I think those could play out over the next you know three five ten years but it'll be interesting to see how that happens I don't see it anticipating our backlogs I think our customers are trying to catch up and then of course you've got this semiconductor sector that I think is really strengthening it's sort of sort of the final piece of the puzzle right you've got all the upstream now you got the facilities built now you need semiconductor tools and you need things like that and and that's why I think that for so long people like Applied Materials were pretty flat and everyone's like how is that possible right and now they're booming as more of these things are stood up and the actual guts or the intelligence of the operations being invested so you know we really touch on all parts of that value stream and so at this point I feel like it's more catch-up than it is real political risk from those headlines but You know, long-term, you know, there's a lot of discussion. Is this a five-year, 10-year, 20-year trend? And I would tell you that over 10 or 20 years, the issue you mentioned will certainly play out.

Understood. That's great commentary. If I could maybe ask one more around defense, just trying to think about what the qualification bidding, you know, negotiating process is like there in the defense market. Are you seeing, you know, maybe manufacturing competence and time to market being on equal or close to equal footing as things like price that might maybe take the lead in other negotiations? Or maybe, I guess, how would you qualify the defense new customer acquisition environment? You're just referring to sort of more broadly? Correct, broadly, and could be engineer products, could be supply tech.

Again, I think that there are parts of the business that that are expanding fairly quickly and we've touched on some of them you know data centers we've touched on aerospace and defense you know the capacity building stationary power mining you know the capacity building is so important i think these are all important issues by the way quality product price delivery i mean these are all um triangulated every day in our business but i would certainly say in some of the segments we're discussing delivery is The most important thing. So I think the deliverable quality, sorry, quality is most the deliveries to a price is always an important part of the puzzle to, you know, deliver value, overall value to the customer. So I would suggest to you that, you know, by and large, those are the kinds of discussions that happen. Again, not to not to suggest that that Price is still not very important, particularly in some of the more traditional sectors, whether it be auto or rail or trucks. So delivering value to that supply chain, particularly after years of price increases as inflation came through, is a little higher on their priorities than perhaps the people who are trying to build more missile cells or something like that. But it's an intersection of all three, unquestionable. especially after years of inflation for sure and cost increases on our side and theirs.

I appreciate you taking my questions and good luck on the next quarter. Thank you so much.

Thank you. The next question comes from Christian Zyla with KeyBank Capital. Please proceed.

Good morning, Matt and Patrick. This is Christian Zyla on for Steve Barger. Thanks for taking the questions. No problem, Christian.

How are you?

Good. First question from us. You guys divested aluminum products a few years ago and now have Southwest Steel in a strategic review. What other business units have negative or flat earnings and should we expect further portfolio actions as your other core businesses really start to accelerate with the industrial cycle?

Well, let me first comment on Southwest Steel. You know, again, Southwest Steel has been an important contributor to Park Ohio over the last 20 years and until recently has been consistently profitable and accretive to our overall margin profile. So, you know, there's some fundamental things that have happened in their end markets that make it less desirable for us as part of our core business and our goals to grow with significant operating leverage. So, you know, we're patiently trying to find the right fit for that. Moving to your second question, I don't know as we sit here today that I would identify another part of our business, which certainly has the negative impact that Southwest does on our overall financial statements. But to be honest with you, we're always, I mean, we are always, particularly in this period of reinvestment, looking to optimize, looking to be more efficient. So while I would not call it any particular business, I would say that we always have what we call value drivers here across the business, you know, to optimize and improve the way that we come to market. So, you know, but not to that level or nor would I call it any particular business other than SSP.

Understood. I guess sticking with engineer products, I know you guys have that silicon steel order that you're working through. So was some of the margin, the year-over-year margin expansion, driven by you fulfilling parts of that contract, or was the margin improvement in the EP partially driven by Metta Mix in the quarter? You guys have said in the past that EP drives Park Ohio, so ultimately what I'm trying to figure out is, is this a level of sustainable margin, you know, as a floor in your EP segment? And judging by the comments you made and the disclosure about Southwest Steel, it sounds like the answer is yes, but I'm just trying to frame out, like, long-term trajectory and how you're thinking about EP.

No, no, it's a great question. So first of all, more specifically, I think what Pat will tell you in a moment is we are benefiting from that order. But I think what's more important to focus on is that order entry this year is up over last year. So even with that big order, order entry continues to be very strong. and oh by the way it you know there are certain dynamics about large orders versus small orders so no I the bad business continues to be strong and there's no question we're benefiting from that large order last year but but I don't want you to suggest this is a lump going through the snakes so to speak it may be operationally at times I'm sure but but it's not that's not the way I would think about it so we are really and then separately I would say I just want to comment generally we are we are seeing through I think great leadership out of that group and some really discreet investments that I discussed in terms of increasing the reliability of their equipment as well as their infrastructure to perform. I think we're beginning to see a return to the profitability metrics we saw consistently for 20 years until COVID. So I would not look at this as a one-off. I would look at this as an opportunity to return some of the profitability metrics to where they should be. And I also think an opportunity to invest in the business. And yes, also benefit maybe a little disproportionately around some of the sort of electrical infrastructure stuff we've talked about, transformers and so forth, AI, et cetera, as well as aerospace and defense, which is where a big chunk of that exposure is for us. So no, I don't view... that particular order while beneficial to this year's earnings as being unusual or the sort of up in the snake.

Yeah, Christian, I would also comment that this is a global business with global aftermarket presence as well as new equipment builds. We continue to see increased absorption in each of our plants based on the increase in bookings. It makes perfect sense that as a result, we're going to see higher margins. Our margins have continued to improve year over year, but still not where we need to be. And our team is working hard on that. So we expect continued improvement. Even margins north of 10% are not uncommon in this business over the long term. And we plan to get there.

yeah that's great and I guess back to the envelope math if I exclude Southwest Steel to engineer products it looks like you guys are closer to like a high single-digit nine plus percent EBIT so sounds like you guys are kind of already there which is great to hear just if I could do one last question thank you for the time again for supply tech what was the impact of the automation improvements and the new distribution center on the margin Just typically when you have double-digit sales in supply tech, you have some nice operating leverage and margin expansion there. So just trying to get a sense of what a clean operating margin level was, excluding the investments that you guys made. Thank you again.

Yeah, I'll address that, Christian. As I mentioned in the script, the effect of the North American Distribution Center will start to appear in our margins in 2027. There was no impact relative to that. We continue to make investments in people to support that activity, but I wouldn't say in the current quarter that had a meaningful impact on our margins. We'll start to see more of that over the next couple of quarters. And then in terms of the information systems investments that we're making, again, it's people-driven, supporting two systems. as we implement our new information systems will have an impact on our margins going forward. But we've seen continued improvement in the margins in this segment. We expect that to continue despite the investments that we're making.

Got it. Thank you.

Thank you. At this time, I would like to turn the call back over to Mr. Crawford for closing comments.

Great. Thank you very much for your questions this morning and your time. And we look forward to a very exciting second half. Have a great day.

Thank you. This does conclude today's teleconference. You may disconnect your lines at this time. Thank you for your participation and have a great day.