EXHIBIT 99.1
| FOR IMMEDIATE RELEASE | CONTACT: | EDWARD F. CRAWFORD PARK-OHIO HOLDINGS CORP. (216) 692-7200 |
Park-Ohio Growth Continues in Second Quarter 2007
CLEVELAND, OHIO, July 31, 2007 — Park-Ohio Holdings Corp. (NASDAQ:PKOH) today announced results for its second quarter ended June 30, 2007.
SIX MONTHS RESULTS
Park-Ohio reported net sales of $554.5 million for the first six months of 2007, a 5% increase on sales of $528.7 million for the same period of 2006. Park-Ohio reported net income of $11.1 million, or $.95 per share dilutive, for the first six months of 2007, a 14% increase on $9.7 million, or $.84 per share dilutive, in the same period of 2006.
SECOND QUARTER RESULTS
Park-Ohio reported net sales of $286.6 million for second quarter 2007, a 7% increase on sales of $268.5 million for second quarter 2006. Park-Ohio reported net income of $5.8 million, or $.50 per share dilutive, for second quarter 2007, an 18% increase on net income of $4.9 million, or $.43 per share dilutive, for second quarter 2006.
Edward F. Crawford, Chairman and Chief Executive Officer, stated, “The diversity of Park-Ohio’s business model was evident as revenues and earnings grew 7% and 18% respectively, in line with management’s expectations, despite strong headwinds from the heavy truck and U.S. auto manufacturing segments. Order backlogs in our Manufactured Products group are very strong and, combined with improved profitability at Integrated Logistics Solutions (ILS) during the second half, are expected to more than offset continuing sluggish performance in the Aluminum group. We reiterate our 2007 EPS forecast range of $2.10 to $2.35 dilutive.”
A conference call reviewing Park-Ohio’s second quarter results will be broadcast live over the Internet on Wednesday, August 1, commencing at 10:00 am Eastern Time. Simply log on tohttp://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)
PARK-OHIO HOLDINGS CORP. AND SUBSIDIARIES
(In Thousands, Except per Share Data)
| Three Months Ended | Six Months Ended | |||||||||||||||
| June 30, | June 30, | |||||||||||||||
| 2007 | 2006 | 2007 | 2006 | |||||||||||||
| Net sales | $ | 286,636 | $ | 268,453 | $ | 554,522 | $ | 528,674 | ||||||||
| Cost of products sold | 244,256 | 230,738 | 473,533 | 454,072 | ||||||||||||
| Gross profit | 42,380 | 37,715 | 80,989 | 74,602 | ||||||||||||
| Selling, general and administrative expenses | 24,859 | 22,209 | 50,349 | 43,928 | ||||||||||||
| Gain on sale of assets held for sale | 0 | 0 | (2,299 | ) | 0 | |||||||||||
| Operating income | 17,521 | 15,506 | 32,939 | 30,674 | ||||||||||||
| Interest expense | 8,286 | 7,735 | 16,293 | 15,105 | ||||||||||||
| Income before income taxes | 9,235 | 7,771 | 16,646 | 15,569 | ||||||||||||
| Income taxes | 3,386 | 2,870 | 5,593 | 5,911 | ||||||||||||
| Net income | $ | 5,849 | $ | 4,901 | $ | 11,053 | $ | 9,658 | ||||||||
| Amounts per common share: | ||||||||||||||||
| Basic | $ | 0.53 | $ | 0.45 | $ | 1.00 | $ | 0.88 | ||||||||
| Diluted | $ | 0.50 | $ | 0.43 | $ | 0.95 | $ | 0.84 | ||||||||
| Common shares used in the computation | ||||||||||||||||
| Basic | 11,061 | 10,983 | 11,055 | 10,976 | ||||||||||||
| Diluted | 11,631 | 11,446 | 11,598 | 11,440 | ||||||||||||
| Other financial data: | ||||||||||||||||
| EBITDA, as defined | $ | 23,386 | $ | 20,810 | $ | 42,357 | $ | 41,024 | ||||||||
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 income to EBITDA, as defined:
| Three Months Ended | Six Months Ended | |||||||||||||||
| June 30, | June 30, | |||||||||||||||
| 2007 | 2006 | 2007 | 2006 | |||||||||||||
| Net income | $ | 5,849 | $ | 4,901 | $ | 11,053 | $ | 9,658 | ||||||||
| Add back: | ||||||||||||||||
| Income taxes | 3,386 | 2,870 | 5,593 | 5,911 | ||||||||||||
| Interest expense | 8,286 | 7,735 | 16,293 | 15,105 | ||||||||||||
| Depreciation and amortization | 5,280 | 5,047 | 10,527 | 9,827 | ||||||||||||
| Gain on the sale of assets held for sale | 0 | 0 | (2,299 | ) | 0 | |||||||||||
| Miscellaneous | 585 | 257 | 1,190 | 523 | ||||||||||||
| EBITDA, as defined | $ | 23,386 | $ | 20,810 | $ | 42,357 | $ | 41,024 | ||||||||
CONSOLIDATED CONDENSED BALANCE SHEETS
PARK-OHIO HOLDINGS CORP. AND SUBSIDIARIES
PARK-OHIO HOLDINGS CORP. AND SUBSIDIARIES
| June 30, | December 31, | |||||||
| 2007 | 2006 | |||||||
| (Unaudited) | (Audited) | |||||||
| (In Thousands) | ||||||||
ASSETS | ||||||||
| Current Assets | ||||||||
| Cash and cash equivalents | $ | 20,500 | $ | 21,637 | ||||
| Accounts receivable, net | 189,274 | 181,893 | ||||||
| Inventories | 211,812 | 223,936 | ||||||
| Deferred tax assets | 34,142 | 34,142 | ||||||
| Other current assets | 34,199 | 24,218 | ||||||
| Total Current Assets | 489,927 | 485,826 | ||||||
| Property, Plant and Equipment | 255,765 | 248,065 | ||||||
| Less accumulated depreciation | 155,022 | 146,980 | ||||||
| Total Property Plant and Equipment | 100,743 | 101,085 | ||||||
| Other Assets | ||||||||
| Goodwill | 98,676 | 98,180 | ||||||
| Net assets held for sale | 4,458 | 6,959 | ||||||
| Other | 93,986 | 92,092 | ||||||
| Total Other Assets | 197,120 | 197,231 | ||||||
| Total Assets | $ | 787,790 | $ | 784,142 | ||||
LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||
| Current Liabilities | ||||||||
| Trade accounts payable | $ | 116,468 | $ | 132,864 | ||||
| Accrued expenses | 66,163 | 78,655 | ||||||
| Current portion of long-term liabilities | 7,915 | 5,873 | ||||||
| Total Current Liabilities | 190,546 | 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 | 169,100 | 156,700 | ||||||
| Other long-term debt | 3,985 | 4,790 | ||||||
| Deferred tax liability | 32,089 | 32,089 | ||||||
| Other postretirement benefits and other long-term liabilities | 28,447 | 24,434 | ||||||
| Total Long-Term Liabilities | 443,621 | 428,013 | ||||||
| Shareholders’ Equity | 153,623 | 138,737 | ||||||
| Total Liabilities and Shareholders’ Equity | $ | 787,790 | $ | 784,142 | ||||
BUSINESS SEGMENT INFORMATION (UNAUDITED)
PARK-OHIO HOLDINGS CORP. AND SUBSIDIARIES
(In Thousands)
PARK-OHIO HOLDINGS CORP. AND SUBSIDIARIES
(In Thousands)
| Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
| 2007 | 2006 | 2007 | 2006 | |||||||||||||
NET SALES | ||||||||||||||||
| ILS | $ | 131,133 | $ | 150,338 | $ | 269,890 | $ | 300,497 | ||||||||
| Aluminum Products | 48,563 | 44,913 | 90,650 | 87,615 | ||||||||||||
| Manufactured Products | 106,940 | 73,202 | 193,982 | 140,562 | ||||||||||||
| $ | 286,636 | $ | 268,453 | $ | 554,522 | $ | 528,674 | |||||||||
INCOME BEFORE INCOME TAXES | ||||||||||||||||
| ILS | $ | 5,548 | $ | 10,231 | $ | 12,132 | $ | 20,653 | ||||||||
| Aluminum Products | 1,404 | 2,396 | 2,154 | 4,436 | ||||||||||||
| Manufactured Products | 14,164 | 6,132 | 23,673 | 11,794 | ||||||||||||
| 21,116 | 18,759 | 37,959 | 36,883 | |||||||||||||
| Corporate and Other Costs | (3,595 | ) | (3,253 | ) | (5,020 | ) | (6,209 | ) | ||||||||
| Interest Expense | (8,286 | ) | (7,735 | ) | (16,293 | ) | (15,105 | ) | ||||||||
| $ | 9,235 | $ | 7,771 | $ | 16,646 | $ | 15,569 | |||||||||