EX-99.1 2 l37908exv99w1.htm EX-99.1 exv99w1
EXHIBIT 99.1
         
FOR IMMEDIATE RELEASE
  CONTACT:   EDWARD F. CRAWFORD
 
      PARK-OHIO HOLDINGS CORP.
 
      (440) 947-2000
ParkOhio Announces Third Quarter Results
     CLEVELAND, OHIO, November 2, 2009 — Park-Ohio Holdings Corp. (NASDAQ:PKOH) today announced results for its third quarter ended September 30, 2009.
THIRD QUARTER RESULTS
     Net sales were $168.6 million for third quarter 2009, a reduction of 37% from net sales of $266.1 million for third quarter 2008. Net loss for the third quarter of 2009 was $3.2 million, or $(.29) per share dilutive compared to a net loss of $9.1 million, or $(.82) per share dilutive, for third quarter 2008.
NINE MONTHS RESULTS
     Net sales were $513.3 million for the first nine months of 2009, a reduction of 37% from net sales of $819.2 million for the same period of 2008. Net loss was $5.4 million, or $(.50) per share, versus net income of $.1 million, or $.01 per share dilutive, in the same period of 2008.
     Edward F. Crawford, Chairman and Chief Executive Officer, stated, “The most difficult period in the company’s history has been addressed and we look forward to the next 18 months.”
     A conference call reviewing ParkOhio’s third quarter results will be broadcast live over the Internet on Tuesday, November 3, commencing at 10:00 am Eastern Time. Simply log on to http://www.pkoh.com.
     ParkOhio is a leading provider of supply management services and a manufacturer of highly engineered products. Headquartered in Cleveland, Ohio, the Company operates 28 manufacturing sites and 38 supply chain logistics facilities.
     This news release contains forward-looking statements, including statements regarding future performance of the Company that are subject to certain risks, uncertainties and assumptions. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those anticipated, estimated or projected.
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     Among the key factors that could cause actual results to differ materially from expectations are: the cyclical nature of the vehicular industry; timing of cost reductions; labor availability and stability; changes in economic and industry conditions, including as a result of the current global financial crisis; adverse impacts to the Company, its suppliers and customers from acts of terrorism or hostilities; the financial condition of the Company’s customers and suppliers, including the impact of any bankruptcies; the Company’s ability to successfully integrate the operations of acquired companies; the uncertainties of environmental, litigation or corporate contingencies; and changes in regulatory requirements. These and other risks and assumptions are described in the Company’s reports that are available from the United States Securities and Exchange Commission. The Company assumes no obligation to update the information in this release.
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CONSOLIDATED CONDENSED STATEMENTS OF INCOME (UNAUDITED)
PARK-OHIO HOLDINGS CORP. AND SUBSIDIARIES
(In Thousands, Except per Share Data)
                                 
    Three Months Ended     Nine Months Ended  
    September 30,     September 30,  
    2009     2008     2009     2008  
Net sales
   $ 168,597     $ 266,148     $ 513,252     $ 819,178  
Cost of products sold
     145,938       226,759       437,402       697,361  
 
                        
Gross profit
     22,659       39,389       75,850       121,817  
Selling, general and administrative expenses
     21,701       28,799       66,537       82,755  
Restructuring and impairment charges
     0       17,480       0       17,480  
Gain on purchase of 8.375% senior subordinated notes
     (2,011 )     0       (5,107 )     0  
 
                        
Operating income (loss)
     2,969       (6,890 )     14,420       21,582  
Interest expense
     5,897       6,775       17,996       20,672  
 
                        
 
                                
Income (loss) before income taxes
     (2,928 )     (13,665 )     (3,576 )     910  
Income taxes
     296       (4,597 )     1,838       779  
 
                        
Net (loss) income
     ($3,224 )     ($9,068 )     ($5,414 )   $ 131  
 
                        
 
                                
Amounts per common share:
                                
Basic
     ($0.29 )     ($0.82 )     ($0.50 )   $ 0.01  
Diluted
     ($0.29 )     ($0.82 )     ($0.50 )   $ 0.01  
 
                                
Common shares used in the computation:
                                
Basic
     11,011       11,006       10,931       11,081  
Diluted
     11,011       11,006       10,931       11,605  
 
                                
Other financial data:
                                
EBITDA, as defined
   $ 10,459     $ 17,618     $ 35,742     $ 58,205  
 
                        
Note A—EBITDA, as defined, reflects earnings before interest, income taxes, and excludes depreciation, amortization, certain non-cash charges and corporate-level expenses as defined in the Company’s Revolving Credit Agreement. EBITDA is not a measure of performance under generally accepted accounting principles (“GAAP”) and should not be considered in isolation or as a substitute for net income, cash flows from operating, investing and financing activities and other income or cash flow statement data prepared in accordance with GAAP or as a measure of profitability or liquidity. The Company presents EBITDA because management believes that EBITDA is useful to investors as an indication of the Company’s satisfaction of its Debt Service Ratio covenant in its Revolving Credit Agreement and because EBITDA is a measure used under the Company’s revolving credit facility to determine whether the Company may incur additional debt under such facility. EBITDA as defined herein may not be comparable to other similarly titled measures of other companies.
The following table reconciles net (loss) income to EBITDA, as defined:
                                 
    Three Months Ended     Nine Months Ended  
    September 30,     September 30,  
    2009     2008     2009     2008  
Net (loss) income
     ($3,224 )     ($9,068 )     ($5,414 )   $ 131  
Add back:
                                
Income taxes (benefit)
     296       (4,597 )     1,838       779  
Interest expense
     5,897       6,775       17,996       20,672  
Depreciation and amortization
     4,426       5,586       14,015       15,974  
Restructuring and impairment charges
     0       18,059       0       18,059  
Reserve for customer in bankruptcy
     2,139       0       4,154       0  
Miscellaneous
     925       863       3,153       2,590  
 
                        
EBITDA, as defined
   $ 10,459     $ 17,618     $ 35,742     $ 58,205  
 
                        
Note B—In the first nine months of 2009, the Company recorded a gain of $5.1 million on the purchase of $6.125 million principal amount of Park-Ohio Industries, Inc. 8.375% senior subordinated notes due 2014 of which $2.0 million was recorded in the third quarter.
Note C—In the first nine months of 2009 the Company recorded a charge of $4.2 million to reserve for an account receivable from a customer in bankruptcy.
Note D—In the third quarter of 2008, the Company recorded $18.1 million of restructuring and asset impairment charges associated with the weakness and volatility in the automotive markets ($13.8 million in the Aluminum Products segment and $4.3 million in the Manufactured Products segment). Inventory impairment charges of $.6 million were included in Cost of Products Sold and $17.5 were included in Restructuring and impairment charges.

 

 

CONSOLIDATED CONDENSED BALANCE SHEETS
PARK-OHIO HOLDINGS CORP. AND SUBSIDIARIES
                 
    September 30,     December 31,  
    2009     2008  
    (Unaudited)     (Audited)  
    (In Thousands)  
ASSETS
                
 
                
Current Assets
                
Cash and cash equivalents
   $ 19,377     $ 17,825  
Accounts receivable, net
     122,851       165,779  
Inventories
     199,171       228,817  
Deferred tax assets
     9,446       9,446  
Unbilled contract revenue
     9,151       25,602  
Other current assets
     9,113       12,818  
 
            
 
Total Current Assets
     369,109       460,287  
 
Property, Plant and Equipment
     253,724       248,474  
Less accumulated depreciation
     170,514       157,832  
 
            
Total Property Plant and Equipment
     83,210       90,642  
 
Other Assets
                
Goodwill
     4,206       4,109  
Other
     65,424       64,182  
 
            
Total Other Assets
     69,630       68,291  
 
            
Total Assets
   $ 521,949     $ 619,220  
 
            
 
                
LIABILITIES AND SHAREHOLDERS’ EQUITY
                
 
                
Current Liabilities
                
Trade accounts payable
   $ 76,165     $ 121,995  
Accrued expenses
     52,556       74,351  
Current portion of long-term debt
     2,369       8,778  
Current portion of other postretirement benefits
     2,290       2,290  
 
            
Total Current Liabilities
     133,380       207,414  
 
                
Long-Term Liabilities, less current portion
               
8.375% Senior Subordinated Notes due 2014
     188,770       198,985  
Revolving credit maturing on December 31, 2010
     147,800       164,600  
Other long-term debt
     6,051       2,283  
Deferred tax liability
     9,090       9,090  
Other postretirement benefits and other long-term liabilities
     23,580       24,093  
 
            
Total Long-Term Liabilities
     375,291       399,051  
 
                
Shareholders’ Equity
     13,278       12,755  
 
            
Total Liabilities and Shareholders’ Equity
   $ 521,949     $ 619,220  
 
            

 

 

BUSINESS SEGMENT INFORMATION (UNAUDITED)
PARK-OHIO HOLDINGS CORP. AND SUBSIDIARIES
(In Thousands)
                                 
    Three Months Ended September 30,     Nine Months Ended September 30,  
    2009     2008     2009     2008  
NET SALES
                                
 
                                
Supply Technologies
   $ 82,464     $ 131,668     $ 242,879     $ 399,452  
Aluminum Products
     31,663       35,784       75,656       120,304  
Manufactured Products
     54,470       98,696       194,717       299,422  
 
                        
 
   $ 168,597     $ 266,148     $ 513,252     $ 819,178  
 
                        
 
                                
INCOME (LOSS) BEFORE INCOME TAXES
                                
 
                                
Supply Technologies
   $ 2,078     $ 5,259     $ 5,509     $ 16,551  
Aluminum Products
     (1,337 )     (17,557 )     (6,793 )     (18,674 )
Manufactured Products
     3,413       10,062       20,498       37,703  
 
                        
 
     4,154       (2,236 )     19,214       35,580  
Corporate and Other Costs
     (1,185 )     (4,654 )     (4,794 )     (13,998 )
Interest Expense
     (5,897 )     (6,775 )     (17,996 )     (20,672 )
 
                        
 
   $ (2,928 )   $ (13,665 )   $ (3,576 )   $ 910