EX-99.1 2 l28536aexv99w1.htm EX-99.1 EX-99.1
 

EXHIBIT 99.1
FOR IMMEDIATE RELEASE
     
CONTACT:
  EDWARD F. CRAWFORD
PARK-OHIO HOLDINGS CORP.
440-947-2000
 
    
Park-Ohio Reports Record Third Quarter Earnings
     CLEVELAND, OHIO, October 30, 2007 — Park-Ohio Holdings Corp. (NASDAQ:PKOH) today announced results for its third quarter ended September 30, 2007.
NINE MONTHS RESULTS
     Park-Ohio reported net sales of $823.6 million for the first nine months of 2007, a 5% increase on sales of $785.8 million for the same period of 2006. Park-Ohio reported net income of $17.3 million, or $1.48 per share dilutive, for the first nine months of 2007, a 29% increase on $13.4 million, or $1.17 per share dilutive, in the same period of 2006.
THIRD QUARTER RESULTS
     Park-Ohio reported net sales of $269.1 million for third quarter 2007, a 5% increase on sales of $257.2 million for third quarter 2006. Park-Ohio reported net income of $6.2 million, or $.53 per share dilutive, for third quarter 2007, a 68% increase on net income of $3.7 million, or $.33 per share dilutive, for third quarter 2006.
     Edward F. Crawford, Chairman and Chief Executive Officer, stated, “Solid results during what has historically been our seasonally slow third quarter demonstrate the strength of our international performance and the results of ongoing margin improvement initiatives. We expect 2007 EPS to be between $2.10 and $2.20 dilutive.”
     A conference call reviewing Park-Ohio’s third quarter results will be broadcast live over the Internet on Wednesday, October 31, 2007, commencing at 10:00 am Eastern Time. Simply log on to http://www.pkoh.com.
     Park-Ohio is a leading provider of supply chain logistics services and a manufacturer of highly engineered products. Headquartered in Cleveland, Ohio, the Company operates 24 manufacturing sites and 54 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; 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,  
    2007     2006     2007     2006  
Net sales
   $ 269,104     $ 257,167     $ 823,626     $ 785,841  
Cost of products sold
     226,880       220,968       700,413       675,039  
 
                        
Gross profit
     42,224       36,199       123,213       110,802  
Selling, general and administrative expenses
     24,187       22,443       74,537       66,372  
Gain on sale of assets held for sale
     0       0       (2,299 )     0  
 
                        
Operating income
     18,037       13,756       50,975       44,430  
Interest expense
     7,993       8,065       24,286       23,170  
 
                        
 
                                
Income before income taxes
     10,044       5,691       26,689       21,260  
Income taxes
     3,816       1,955       9,408       7,866  
 
                        
Net income
   $ 6,228     $ 3,736     $ 17,281     $ 13,394  
 
                        
 
                                
Amounts per common share:
                                
Basic
   $ 0.56     $ 0.34     $ 1.56     $ 1.22  
Diluted
   $ 0.53     $ 0.33     $ 1.48     $ 1.17  
 
                                
Common shares used in the computation:
                                
Basic
     11,127       11,007       11,079       10,987  
Diluted
     11,707       11,451       11,641       11,448  
 
                                
Other financial data:
                                
EBITDA, as defined
   $ 23,821     $ 18,332     $ 66,178     $ 59,356  
 
                        
     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     Nine Months Ended  
    September 30,     September 30,  
    2007     2006     2007     2006  
Net income
   $ 6,228     $ 3,736     $ 17,281     $ 13,394  
Add back:
                                
Income taxes
     3,816       1,955       9,408       7,866  
Interest expense
     7,993       8,065       24,286       23,170  
Depreciation and amortization
     5,254       4,270       15,782       14,097  
Gain on the sale of assets held for sale
     0       0       (2,299 )     0  
Miscellaneous
     530       306       1,720       829  
 
                        
EBITDA, as defined
   $ 23,821     $ 18,332     $ 66,178     $ 59,356  
 
                        

 

 

CONSOLIDATED CONDENSED BALANCE SHEETS
PARK-OHIO HOLDINGS CORP. AND SUBSIDIARIES
                 
    September 30,     December 31,  
    2007     2006  
    (Unaudited)     (Audited)  
    (In Thousands)  
ASSETS
                
 
                
Current Assets
                
Cash and cash equivalents
   $ 18,878     $ 21,637  
Accounts receivable, net
     197,644       181,893  
Inventories
     206,828       223,936  
Deferred tax assets
     34,142       34,142  
Other current assets
     41,866       24,218  
 
            
 
                
Total Current Assets
     499,358       485,826  
 
                
Property, Plant and Equipment
     260,177       248,065  
Less accumulated depreciation
     158,223       146,980  
 
            
Total Property Plant and Equipment
     101,954       101,085  
 
                
Other Assets
                
Goodwill
     99,097       98,180  
Net assets held for sale
     4,112       6,959  
Other
     95,144       92,092  
 
            
Total Other Assets
     198,353       197,231  
 
            
Total Assets
   $ 799,665     $ 784,142  
 
            
 
                
LIABILITIES AND SHAREHOLDERS’ EQUITY
                
 
                
Current Liabilities
                
Trade accounts payable
   $ 118,734     $ 132,864  
Accrued expenses
     80,089       78,655  
Current portion of long-term liabilities
     9,535       5,873  
 
            
Total Current Liabilities
     208,358       217,392  
 
                
Long-Term Liabilities, less current portion
                
8.375% Senior Subordinated Notes due 2014
     210,000       210,000  
Revolving credit maturing on December 31, 2010
     155,600       156,700  
Other long-term debt
     1,918       4,790  
Deferred tax liability
     32,089       32,089  
Other postretirement benefits and other long-term liabilities
     28,238       24,434  
 
            
Total Long-Term Liabilities
     427,845       428,013  
 
                
Shareholders’ Equity
     163,462       138,737  
 
            
Total Liabilities and Shareholders’ Equity
   $ 799,665     $ 784,142  
 
            

 

 

BUSINESS SEGMENT INFORMATION (UNAUDITED)
PARK-OHIO HOLDINGS CORP. AND SUBSIDIARIES
(In Thousands)
                                 
    Three Months Ended September 30,     Nine Months Ended September 30,  
    2007     2006     2007     2006  
NET SALES
                                
 
                                
ILS
   $ 134,066     $ 149,133     $ 403,956     $ 449,630  
Aluminum Products
     41,188       33,274       131,838       120,889  
Manufactured Products
     93,850       74,760       287,832       215,322  
 
                        
 
   $ 269,104     $ 257,167     $ 823,626     $ 785,841  
 
                        
 
                                
INCOME BEFORE INCOME TAXES
                                
 
                                
ILS
   $ 8,288     $ 8,796     $ 20,420     $ 29,449  
Aluminum Products
     1,131       (118 )     3,285       4,318  
Manufactured Products
     11,619       8,148       35,292       19,942  
 
                        
 
     21,038       16,826       58,997       53,709  
Corporate and Other Costs
     (3,001 )     (3,070 )     (8,022 )     (9,279 )
Interest Expense
     (7,993 )     (8,065 )     (24,286 )     (23,170 )
 
                        
 
   $ 10,044     $ 5,691     $ 26,689     $ 21,260