EX-99.1 3 l02428aexv99w1.txt EX-99.1 PRESS RELEASE Exhibit 99.1 [Park Ohio Logo] FOR IMMEDIATE RELEASE CONTACT: EDWARD F. CRAWFORD PARK-OHIO HOLDINGS CORP. (216) 692-7200 PARK-OHIO ANNOUNCES NEW $165 MILLION SENIOR REVOLVING CREDIT FACILITY --------------------------------------------------------------------- AND IMPROVED SECOND QUARTER 2003 RESULTS ---------------------------------------- CLEVELAND, OHIO, July 30, 2003 -- Park-Ohio Holdings Corp. (NASDAQ:PKOH), today announced results for its second quarter ended June 30, 2003. SIX MONTHS RESULTS Park-Ohio reported net income of $5.1 million or $.47 per share dilutive for the first six months of 2003, compared to loss before cumulative effect of accounting change for the first six months of 2002 of ($.5) million or ($.05) per share dilutive. Adjusted (A) income before cumulative effect of accounting change for the first six months of 2002 was $2.1 million or $.20 per share dilutive. Park-Ohio reported net sales of $314.8 million for the first six months of 2003 compared to net sales of $320.5 million one year earlier. SECOND QUARTER RESULTS Park-Ohio reported net income of $2.7 million or $.25 per share dilutive for the second quarter of 2003, compared to net loss for the second quarter of 2002 of ($.5) million or ($.05) per share dilutive. Adjusted (B) net income for the second quarter of 2002 was $1.7 million or $.16 per share dilutive. Park-Ohio reported net sales of $159.9 million for the second quarter of 2003 compared to net sales of $166.6 million one year earlier. (Note A) Net income for the first six months of 2002, as adjusted, excludes the after-tax impact of restructuring and other unusual charges of $2.6 million. (Note B) Net income for the second quarter of 2002, as adjusted, excludes the after-tax impact of restructuring and other unusual charges of $2.2 million. The Company presents adjusted income excluding restructuring and other unusual charges to facilitate comparison between periods. NEW FINANCING REPLACES PREVIOUS SENIOR CREDIT FACILITY AND CARRIES IMPROVED TERMS Additionally, Park-Ohio announced that it has entered into a four year, $165 million senior revolving credit facility. This financing carries improved terms including a lower interest rate, and replaces the Company's previous senior credit facility. Bank One, NA served as the lead arranger of the new credit facility, and KeyBank National Association served as syndication agent. Proceeds of the new facility will be used to repay approximately $110 million outstanding under the previous credit facility and finance working capital. Edward F. Crawford, Chairman and Chief Executive Officer, stated, "We continue to 23000 EUCLID AVENUE - CLEVELAND, OHIO 44117 - 216-692-7200 / FAX 216-692-7174 improve our performance in a flat economy. Our new four-year revolving credit agreement provides more attractive borrowing terms and flexibility to support working capital growth in our core businesses as the economy recovers." A conference call reviewing Park-Ohio's year-end results will be broadcast live over the Internet on Thursday, July 31, commencing at 10:00 a.m. EDT. Simply log on to http://www.firstcallevents.com/service/ajwz386682258gf12.html. Park-Ohio is a leading provider of supply chain logistics services, and a manufacturer of highly engineered products for industrial original equipment manufacturers. Headquartered in Cleveland, Ohio, the Company operates 23 manufacturing sites and 36 supply chain logistics facilities. This news release contains forward-looking statements 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. 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 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. -more- CONSOLIDATED CONDENSED 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, 2003 2002 2003 2002 --------- --------- --------- --------- Net sales $ 159,916 $ 166,625 $ 314,767 $ 320,468 Cost of products sold 134,069 142,245 264,510 274,390 --------- --------- --------- --------- Gross profit 25,847 24,380 50,257 46,078 Selling, general and administrative expenses 15,620 14,698 30,699 28,954 Restructuring and other unusual charges 0 3,635 0 4,256 --------- --------- --------- --------- Operating income 10,227 6,047 19,558 12,868 Interest expense 6,695 6,959 13,452 13,639 --------- --------- --------- --------- Income (loss) before income taxes and cumulative effect of accounting change 3,532 (912) 6,106 (771) Income taxes (credits) 835 (365) 972 (299) --------- --------- --------- --------- Income (loss) before cumulative effect of accounting change 2,697 (547) 5,134 (472) Cumulative effect of accounting change 0 0 0 (48,799) --------- --------- --------- --------- Net income (loss) $ 2,697 ($ 547) $ 5,134 ($ 49,271) ========= ========= ========= ========= Amounts per common share: Basic: Income (loss) before cumulative effect of accounting change $ 0.26 ($ 0.05) $ 0.49 ($ 0.05) Cumulative effect of accounting change 0.00 0.00 0.00 (4.68) Net income (loss) $ 0.26 ($ 0.05) $ 0.49 ($ 4.73) Diluted: Income (loss) before cumulative effect of accounting change $ 0.25 ($ 0.05) $ 0.47 ($ 0.05) Cumulative effect of accounting change 0.00 0.00 0.00 (4.68) Net income (loss) $ 0.25 ($ 0.05) $ 0.47 ($ 4.73) Common shares used in the computation Basic 10,501 10,434 10,499 10,434 Diluted 10,903 10,434 10,878 10,434 Other financial data: EBITDA, as defined $ 14,337 $ 14,324 $ 27,928 $ 26,098 ========= ========= ========= =========
Note A--The Company completed the impairment tests required by Statement of Financial Standards No. 142 "Goodwill and Other Intangible Assets" and effective January 1, 2002, recorded a $48.8 million charge reflected as a cumulative effect of a change in accounting principle. Note B--The effective income tax rate for the first six months of 2003 is less than the statutory Federal income tax rate due primarily to the recognition of net operating loss carryforwards. Note C--EBITDA reflects earnings before interest, income taxes, and non-operating income and expense (Operating Income), and excludes depreciation and amortization, non-recurring items and certain 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 data prepared in accordance with GAAP or as a measure of profitability or liquidity. The Company presents EBITDA because management believes that EBITDA could be useful to investors as an indication of the Company's ability to incur and service debt 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 (loss) to EBITDA, as defined:
Three Months Ended Six Months Ended June 30, June 30, 2003 2002 2003 2002 -------- -------- -------- -------- Net income (loss) $ 2,697 ($ 547) $ 5,134 ($49,271) Add back: Cumulative effect of accounting change 0 0 0 48,799 Income taxes (credits) 835 (365) 972 (299) Interest expense 6,695 6,959 13,452 13,639 Depreciation and amortization 4,009 4,271 8,212 8,474 Restructuring and other unusual charges 0 3,635 0 4,256 Miscellaneous 101 371 158 500 -------- -------- -------- -------- EBITDA, as defined $ 14,337 $ 14,324 $ 27,928 $ 26,098 ======== ======== ======== ========
CONSOLIDATED CONDENSED BALANCE SHEETS PARK-OHIO HOLDINGS CORP. AND SUBSIDIARIES
June 30 December 31 2003 2002 (Unaudited) (Audited) ----------- --------- (In Thousands) ASSETS Current Assets Cash and cash equivalents $ 4,909 $ 8,812 Accounts receivable, net 108,331 101,477 Inventories 159,290 156,067 Other current assets 7,108 8,626 -------- -------- Total Current Assets 279,638 274,982 Property, Plant and Equipment 235,617 227,426 Less accumulated depreciation 124,166 114,302 -------- -------- Total Property Plant and Equipment 111,451 113,124 Other Assets Goodwill 82,127 81,464 Net assets held for sale 10,352 19,205 Other 54,233 52,083 -------- -------- Total Other Assets 146,712 152,752 -------- -------- Total Assets $537,801 $540,858 ======== ======== LIABILITIES AND SHAREHOLDERS' EQUITY Current Liabilities Trade accounts payable $ 68,499 $ 74,868 Accrued expenses 49,669 48,907 Current portion of long-term liabilities 2,694 3,056 -------- -------- Total Current Liabilities 120,862 126,831 Long-Term Liabilities, less current portion 9.25% Senior Subordinated Notes due 2007 199,930 199,930 Revolving credit maturing on June 30,2004 109,500 114,000 Other long-term debt 10,148 9,886 Other postretirement benefits 23,332 23,829 Other 3,230 3,483 -------- -------- Total Long-Term Liabilities 346,140 351,128 Shareholders' Equity 70,799 62,899 -------- -------- Total Liabilities and Shareholders' Equity $537,801 $540,858 ======== ========
Note A--Effective June 30, 2003 the Company changed the method of accounting for the 15% of its inventories utilizing the LIFO method to the FIFO method. As required by GAAP, the Company has restated its consolidated balance sheet as of December 31, 2002 to increase inventories by the recorded LIFO reserve ($4.4 million), increase deferred tax liabilities ($1.7 million), and increase shareholders' equity ($2.7 million). Previously reported results of operations have not been restated because the impact of utilizing the LIFO method had an insignificant impact on the Company's reported amounts for consolidated net income (loss). Note B--The revolving credit was refinanced by the Company on July 30, 2003, maturing July 30, 2007 and is classified as long-term debt.