EX-99.1 2 l40310exv99w1.htm EX-99.1 exv99w1
EXHIBIT 99.1
         
FOR IMMEDIATE RELEASE
  CONTACT:   EDWARD F. CRAWFORD
 
      PARK-OHIO HOLDINGS CORP.
 
      (440) 947-2000
ParkOhio Announces Second Quarter Results
     CLEVELAND, OHIO, July 27, 2010 — Park-Ohio Holdings Corp. (NASDAQ:PKOH) today announced results for its second quarter ended June 30, 2010.
SECOND QUARTER RESULTS
     Net sales were $198.3 million for second quarter 2010, an increase of 21% from net sales of $163.4 million for second quarter 2009. Net income for the second quarter of 2010 was $3.4 million, or $.29 per share dilutive compared to net income of $3.3 million, or $.29 per share dilutive, for second quarter 2009. Included in the 2009 results were a gain of $3.1 million on the purchase of Park-Ohio Industries, Inc. 8.375% senior subordinated notes due 2014 and a charge of $2.0 million to reserve for an account receivable from a customer in bankruptcy.
SIX MONTHS RESULTS
     Net sales were $390.0 million for the first six months of 2010, an increase of 13% from net sales of $344.7 million for the same period of 2009. Net income for the first six months of 2010 was $5.5 million, or $.47 per share, versus net loss of $2.2 million, or $(.20) per share dilutive, in the same period of 2009. Included in the 2009 results were a gain of $3.1 million on the purchase of Park-Ohio Industries, Inc. 8.375% senior subordinated notes due 2014 and a charge of $2.0 million to reserve for an account receivable from a customer in bankruptcy.
     A conference call reviewing ParkOhio’s second quarter results will be broadcast live over the Internet on Wednesday, July 28, 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 40 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.
- more -
     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; 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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CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
PARK-OHIO HOLDINGS CORP. AND SUBSIDIARIES
(In Thousands, Except per Share Data)
                                 
    Three Months Ended     Six Months Ended  
    June 30,     June 30,  
    2010     2009     2010     2009  
Net sales
   $ 198,303     $ 163,405     $ 390,004     $ 344,655  
Cost of products sold
     165,005       134,077       327,368       291,464  
 
                        
Gross profit
     33,298       29,328       62,636       53,191  
Selling, general and administrative expenses
     22,337       22,214       43,305       44,836  
 
                        
Operating income
     10,961       7,114       19,331       8,355  
Gain on purchase of 8.375% senior subordinated notes
     0       (3,096 )     0       (3,096 )
Interest expense
     6,167       6,128       11,603       12,099  
 
                        
Income before income taxes
     4,794       4,082       7,728       (648 )
Income taxes
     1,379       810       2,247       1,542  
 
                        
Net income
   $ 3,415     $ 3,272     $ 5,481       ($2,190 )
 
                        
 
                                
Amounts per common share:
                                
Basic
   $ 0.30     $ 0.30     $ 0.49       ($0.20 )
Diluted
   $ 0.29     $ 0.29     $ 0.47       ($0.20 )
 
                                
Common shares used in the computation:
                                
Basic
     11,475       11,008       11,229       10,890  
Diluted
     11,956       11,282       11,747       10,890  
 
                                
Other financial data:
                                
EBITDA, as defined
   $ 15,777     $ 17,558     $ 28,827     $ 25,284  
 
                        
 
Note A—EBITDA, as defined, reflects earnings before interest and 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 income to EBITDA, as defined:
                                 
    Three Months Ended     Six Months Ended  
    June 30,     June 30,  
    2010     2009     2010     2009  
Net income
   $ 3,415     $ 3,272     $ 5,481       ($2,190 )
Add back:
                                
Income taxes
     1,379       810       2,247       1,542  
Interest expense
     6,167       6,128       11,603       12,099  
Reserve for customer in bankruptcy
     0       2,015       0       2,015  
Depreciation and amortization
     4,265       4,396       8,433       9,589  
Miscellaneous
     551       937       1,063       2,229  
 
                        
EBITDA, as defined
   $ 15,777     $ 17,558     $ 28,827     $ 25,284  
 
                        
Note B—In the second quarter of 2009, the Company recorded a gain of $3.1 million on the purchase of $6.125 million of Park-Ohio Industries, Inc. 8.375% senior subordinated notes due 2014.
Note C—In the second quarter of 2009, the Company recorded a charge of $2.0 million to reserve for an account receivable from a customer in bankruptcy.

 

 

CONDENSED CONSOLIDATED BALANCE SHEETS
PARK-OHIO HOLDINGS CORP. AND SUBSIDIARIES
                 
    June 30,     December 31,  
    2010     2009  
    (Unaudited)     (Audited)  
    (In Thousands)  
ASSETS
                
 
                
Current Assets
                
Cash and cash equivalents
   $ 27,866     $ 23,098  
Accounts receivable, net
     119,878       104,643  
Inventories
     169,115       182,116  
Deferred tax assets
     8,104       8,104  
Unbilled contract revenue
     15,263       19,411  
Other current assets
     10,171       12,700  
 
            
 
                
Total Current Assets
     350,397       350,072  
 
                
Property, Plant and Equipment
     246,763       245,240  
Less accumulated depreciation
     176,534       168,609  
 
            
Total Property Plant and Equipment
     70,229       76,631  
 
                
Other Assets
                
Goodwill
     3,738       4,155  
Other
     79,657       71,410  
 
            
Total Other Assets
     83,395       75,565  
 
            
Total Assets
   $ 504,021     $ 502,268  
 
            
 
                
LIABILITIES AND SHAREHOLDERS’ EQUITY
                
 
                
Current Liabilities
                
Trade accounts payable
   $ 83,692     $ 75,083  
Accrued expenses
     46,895       39,150  
Current portion of long-term debt
     11,882       10,894  
Current portion of other postretirement benefits
     2,197       2,197  
 
            
Total Current Liabilities
     144,666       127,324  
 
                
Long-Term Liabilities, less current portion
               
8.375% Senior Subordinated Notes due 2014
     183,835       183,835  
Revolving credit maturing on June 30, 2013
     117,300       134,600  
Other long-term debt
     4,562       4,668  
Deferred tax liability
     7,200       7,200  
Other postretirement benefits and other long-term liabilities
     23,562       21,831  
 
            
Total Long-Term Liabilities
     336,459       352,134  
 
                
Shareholders’ Equity
     22,896       22,810  
 
            
Total Liabilities and Shareholders’ Equity
   $ 504,021     $ 502,268  
 
            

 

 

BUSINESS SEGMENT INFORMATION (UNAUDITED)
PARK-OHIO HOLDINGS CORP. AND SUBSIDIARIES
(In Thousands)
                                 
    Three Months Ended June 30,     Six Months Ended June 30,  
    2010     2009     2010     2009  
NET SALES
                                
 
                                
Supply Technologies
   $ 97,185     $ 77,444     $ 191,423     $ 160,415  
Aluminum Products
     37,572       21,635       74,160       43,993  
Manufactured Products
     63,546       64,326       124,421       140,247  
 
                        
 
   $ 198,303     $ 163,405     $ 390,004     $ 344,655  
 
                        
 
                                
INCOME (LOSS) BEFORE INCOME TAXES
                                
 
                                
Supply Technologies
   $ 5,311     $ 2,885     $ 9,795     $ 3,431  
Aluminum Products
     2,299       (1,794 )     4,235       (5,456 )
Manufactured Products
     7,597       9,373       12,529       17,085  
 
                        
 
     15,207       10,464       26,559       15,060  
Corporate and Other Costs
     (4,246 )     (254 )     (7,228 )     (3,609 )
Interest Expense
     (6,167 )     (6,128 )     (11,603 )     (12,099 )
 
                        
 
   $ 4,794     $ 4,082     $ 7,728       ($648 )