- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 10-Q

(MARK ONE)

<Table>

[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD
ENDED JUNE 30, 2003, OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD
FROM____________ TO ____________
</Table>

COMMISSION FILE NO. 333-43005

PARK-OHIO INDUSTRIES, INC.
(Exact name of registrant as specified in its charter)

<Table>

OHIO 34-6520107
- ----------------------------------------- -----------------------------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
23000 EUCLID AVENUE, CLEVELAND, OHIO 44117
- ----------------------------------------- -----------------------------------------
(Address of principal executive offices) (Zip Code)
</Table>

REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: 216/692-7200

Pursuant to a corporate reorganization effective June 15, 1998, Park-Ohio
Industries, Inc. became a wholly-owned subsidiary of Park-Ohio Holdings Corp.

The registrant meets the conditions set forth in general instruction H(1)(a) and
(b) of Form 10-Q and is therefore filing this form in reduced disclosure format.

Indicate by check mark whether the registrant:

(1) Has filed all reports required to be filed by Section 13 or 15(d) of
the Securities Exchange Act of 1934 during the preceding twelve months
(or for such shorter period that the registrant was required to file
such reports) and

(2) Has been subject to such filing requirements for the past 90 days.

YES [X] NO [ ]

Indicate by check mark whether the registrant is an accelerated filer (as
defined in Exchange Act Rule 12 b-2).

YES [ ] NO [X]

All of the outstanding capital stock of the registrant is held by Park-Ohio
Holdings Corp. As of July 31, 2003, 100 shares of the registrant's common stock,
$1 par value were outstanding.

The Exhibit Index is located on page 21.

- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

PARK-OHIO INDUSTRIES, INC. AND SUBSIDIARIES

INDEX

<Table>

PART I. FINANCIAL INFORMATION
Item 1 Financial Statements (Unaudited)
Consolidated balance sheets -- June 30, 2003 and December
31, 2002
Consolidated statements of operations -- Three months and
six months ended June 30, 2003 and 2002
Consolidated statement of shareholder's equity -- Six months
ended June 30, 2003
Consolidated statements of cash flows -- Six months ended
June 30, 2003 and 2002
Notes to consolidated financial statements -- June 30, 2003
Independent accountants' review report
Item 2 Management's Discussion and Analysis of Financial Condition
and Results of Operations
Item 4 Controls and Procedures
PART II. OTHER INFORMATION
Item 6 Exhibits and Reports on Form 8-K

SIGNATURE

EXHIBIT INDEX
</Table>

PART I

FINANCIAL INFORMATION

PARK-OHIO INDUSTRIES, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

<Table>
<Caption>
(UNAUDITED)
JUNE 30 DECEMBER 31
2003 2002
----------- -----------
(DOLLARS IN THOUSANDS)

ASSETS
Current Assets
Cash and cash equivalents................................. $ 3,592 $ 8,800
Accounts receivable, less allowances for doubtful accounts
of $3,369 at June 30, 2003 and $3,313 at December 31,
2002................................................... 108,331 101,477
Inventories............................................... 159,290 156,067
Other current assets...................................... 11,789 12,181
-------- --------
Total Current Assets.............................. 283,002 278,525
Property, Plant and Equipment............................... 234,592 226,426
Less accumulated depreciation............................. 124,083 114,260
-------- --------
110,509 112,166
Other Assets
Goodwill.................................................. 82,127 81,464
Net assets held for sale.................................. 10,352 19,205
Prepaid pension and other................................. 53,733 51,583
-------- --------
$539,723 $542,943
======== ========
LIABILITIES AND SHAREHOLDER'S EQUITY
Current Liabilities
Trade accounts payable.................................... $ 68,494 $ 74,868
Accrued expenses.......................................... 49,238 48,839
Current portion of long-term liabilities.................. 2,694 3,056
-------- --------
Total Current Liabilities......................... 120,426 126,763
Long-Term Liabilities, less current portion
9.25% Senior Subordinated Notes........................... 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
-------- --------
346,140 351,128
Shareholder's Equity
Common Stock.............................................. -0- -0-
Additional paid-in capital................................ 64,844 64,844
Retained earnings......................................... 13,639 8,304
Accumulated other comprehensive (loss).................... (5,326) (8,096)
-------- --------
73,157 65,052
-------- --------
$539,723 $542,943
======== ========
</Table>

Note: The balance sheet at December 31, 2002 has been derived from the audited
financial statements at that date, as restated for the Company's change in
accounting for inventories at certain subsidiaries as discussed in Note B.
However, it does not include all of the information and footnotes required
by generally accepted accounting principles for complete financial
statements.

See notes to consolidated financial statements.

PARK-OHIO INDUSTRIES, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)

<Table>
<Caption>
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30, JUNE 30,
------------------- -------------------
2003 2002 2003 2002
-------- -------- -------- --------
(AMOUNTS IN THOUSANDS)

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....... 15,497 14,557 30,498 28,666
Restructuring and impairment charges............... -0- 3,635 -0- 4,256
-------- -------- -------- --------
Operating income................................. 10,350 6,188 19,759 13,156
Interest expense................................... 6,695 6,959 13,452 13,639
-------- -------- -------- --------
Income (loss) before income taxes and cumulative
effect of accounting change................... 3,655 (771) 6,307 (483)
Income tax (benefit)............................... 835 (365) 972 (299)
-------- -------- -------- --------
Income (loss) before cumulative effect of
accounting change............................. 2,820 (406) 5,335 (184)
Cumulative effect of accounting change............. -0- -0- -0- (48,799)
-------- -------- -------- --------
Net income (loss)................................ $ 2,820 $ (406) $ 5,335 $(48,983)
======== ======== ======== ========
</Table>

See notes to consolidated financial statements.

PARK-OHIO INDUSTRIES, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY (UNAUDITED)

<Table>
<Caption>
ACCUMULATED
OTHER
COMMON PAID-IN RETAINED COMPREHENSIVE
STOCK CAPITAL EARNINGS (LOSS) TOTAL
------- ------- -------- ------------- -------

Balance January 1, 2003, as previously
stated...................................... $ -0- $64,844 $ 5,563 $(8,096) $62,311
Adjustment for the cumulative effect on the
prior years of applying retroactively the
change in the method of accounting for
inventories (see Note B).................... 2,741 2,741
------- ------- ------- ------- -------
Balance January 1, 2003, as restated.......... -0- 64,844 8,304 (8,096) 65,052
Comprehensive income:
Net income.................................. 5,335 5,335
Foreign currency translation adjustment..... 2,770 2,770
-------
Comprehensive income........................ 8,105
------- ------- ------- ------- -------
Balance June 30, 2003......................... $ -0- $64,844 $13,639 $(5,326) $73,157
======= ======= ======= ======= =======
</Table>

See notes to consolidated financial statements.

PARK-OHIO INDUSTRIES, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

<Table>
<Caption>
SIX MONTHS ENDED
JUNE 30,
----------------------
2003 2002
--------- ----------
(DOLLARS IN THOUSANDS)

OPERATING ACTIVITIES
Net income (loss)......................................... $ 5,335 $(48,983)
Adjustments to reconcile net income (loss) to net cash
(used) provided by operating activities:
Cumulative effect of change in accounting.............. -0- 48,799
Depreciation and amortization.......................... 8,170 8,402
Changes in operating assets and liabilities:
Accounts receivable.................................... (6,854) (9,861)
Inventories and other current assets................... (2,833) 2,705
Accounts payable and accrued expenses.................. (5,975) 16,319
Other.................................................. 56 (3,405)
------- --------
Net Cash (Used) Provided by Operating Activities..... (2,101) 13,976
INVESTING ACTIVITIES
Purchases of property, plant and equipment, net........... (5,846) (6,282)
Proceeds from sale of assets held for sale................ 7,340 2,486
------- --------
Net Cash Provided (Used) by Investing Activities....... 1,494 (3,796)
FINANCING ACTIVITIES
Proceeds from bank arrangements........................... -0- 1,510
Payments on debt.......................................... (4,601) (5,466)
------- --------
Net Cash Used by Financing Activities.................. (4,601) (3,956)
------- --------
(Decrease) Increase in Cash and Cash Equivalents............ (5,208) 6,224
Cash and Cash Equivalents at Beginning of Period............ 8,800 2,344
------- --------
Cash and Cash Equivalents at End of Period.................. $ 3,592 $ 8,568
======= ========
Taxes refunded.............................................. $(1,187) $ (4,639)
Interest paid............................................... 12,904 12,827
</Table>

See notes to consolidated financial statements.

PARK-OHIO INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
JUNE 30, 2003
(AMOUNTS IN THOUSANDS)

NOTE A -- BASIS OF PRESENTATION

The consolidated financial statements include the accounts of Park-Ohio
Industries, Inc. and its subsidiaries ("Park-Ohio," "the Company"). Park-Ohio is
a wholly-owned subsidiary of Park-Ohio Holdings Corp. as of June 10, 1998. All
significant intercompany transactions have been eliminated in consolidation.

The accompanying unaudited consolidated financial statements have been
prepared in accordance with accounting principles generally accepted for interim
financial information and with the instructions to Form 10-Q and Article 10 of
Regulation S-X. Accordingly, they do not include all of the information and
footnotes required by accounting principles generally accepted in the United
States for complete financial statements. In the opinion of management, all
adjustments (consisting of normal recurring accruals) considered necessary for a
fair presentation have been included. Operating results for the three-month and
six-month periods ended June 30, 2003 are not necessarily indicative of the
results that may be expected for the year ending December 31, 2003. For further
information, refer to the consolidated financial statements and footnotes
thereto included in the Company's Annual Report on Form 10-K for the year ended
December 31, 2002.

Certain amounts have been reclassified to conform to current year
presentation.

NOTE B -- ACCOUNTING CHANGE

As described in Note A to the consolidated financial statements for the
year ended December 31, 2002, inventories are stated at the lower of cost or
market value. The first-in, first-out (FIFO) method was used to determine cost
for 85% of inventories and the last-in, first-out (LIFO) method was used to
determine cost for the remaining 15% of inventories.

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. The
Company believes that this change is preferable for the following reasons: 1)
the change conforms all of its inventories to one method of determining cost,
which is the FIFO method; 2) the costs of the Company's inventories have
remained fairly level during the past several years, which has substantially
negated the benefits of the LIFO method (a better matching of current costs with
current revenues in periods of rising costs); 3) the impact of utilizing the
LIFO method has had an insignificant impact on the Company's consolidated net
income (loss) during the past several years; and 4) the FIFO method results in
the valuation of inventories at current costs on the consolidated balance sheet,
which provides a more meaningful presentation for investors and financial
institutions.

As required under accounting principles generally accepted in the United
States, the Company has restated the 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 C -- ACQUISITION AND DISPOSITIONS

During the first quarter of 2003, the Company completed the sale of
substantially all of the assets of Green Bearing ("Green") and St. Louis Screw
and Bolt ("St. Louis Screw") for cash of approximately $7.3 million. No gain or
loss was recorded on the sale. Green and St. Louis Screw were non-core
businesses in the ILS Segment and Manufactured Products Segment, respectively,
and had been identified as businesses the Company was selling as part of its
restructuring activities during 2002 and 2001.

PARK-OHIO INDUSTRIES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) -- (CONTINUED)

On September 10, 2002, the Company acquired substantially all of the assets
of Ajax Magnethermic Corporation ("Ajax"), a manufacturer of induction heating
and melting equipment. The purchase price of approximately $5.5 million and the
results of operations of Ajax prior to its date of acquisition were not deemed
significant as defined in Regulation S-X.

On April 26, 2002, the Company completed the sale of substantially all of
the assets of Castle Rubber Company for cash of approximately $2.5 million.
Castle Rubber, a non-core business in the Manufactured Products Segment, had
been identified as a business the Company was discontinuing as part of its
restructuring activities during 2001.

NOTE D -- INVENTORIES

The components of inventory consist of the following:

<Table>
<Caption>
JUNE 30 DECEMBER 31
2003 2002
-------- -----------

In process and finished goods............................... $137,121 $136,430
Raw materials and supplies.................................. 22,169 19,637
-------- --------
$159,290 $156,067
======== ========
</Table>

NOTE E -- ADOPTION OF FAS 142 "GOODWILL AND OTHER INTANGIBLE ASSETS"

Effective January 1, 2002, the Company adopted FAS 142, "Goodwill and Other
Intangible Assets". Under this standard, goodwill is no longer amortized but is
subject to an impairment test at least annually. The Company has selected
October 1 as its annual testing date.

The Company, with the assistance of an outside consultant, completed the
transitional impairment review of goodwill during the fourth quarter of 2002 and
recorded a non-cash charge for goodwill impairment which aggregated $48,799. In
accordance with the provisions of FAS 142, the charge has been accounted for as
a cumulative effect of a change in accounting principle, retroactive to January
1, 2002.

NOTE F -- ACCOUNTING PRONOUNCEMENTS

In June 2002, the Financial Accounting Standards Board ("FASB") issued
Statement of Financial Accounting Standards No. 146, "Accounting for Costs
Associated with Exit or Disposal Activities," ("FAS 146"), which addresses
financial accounting and reporting for costs associated with exit or disposal
activities and nullifies Emerging Issues Task Force (EITF) Issue No. 94-3,
"Liability Recognition for Certain Employee Termination Benefits and Other Costs
to Exit an Activity (including Certain Costs Incurred in a Restructuring)." FAS
146 requires that a liability for a cost that is associated with an exit or
disposal activity be recognized when a legal liability is incurred. FAS 146 is
effective for exit and disposal activities that are initiated after December 31,
2002.

In November 2002, the FASB issued Interpretation No. 45, "Guarantor's
Accounting and Disclosure Requirements for Guarantees, Including Indirect
Guarantees of Indebtedness of Others" ("FIN 45"). FIN 45 elaborates on required
disclosures by a guarantor in its financial statements about obligations under
certain guarantees that it has issued and requires a guarantor to recognize, at
the inception of certain guarantees, a liability for the fair value of the
obligation undertaken in issuing the guarantee. The Company is reviewing the
provisions of FIN 45 relating to initial recognition and measurements of
guarantor liabilities, which are effective for qualifying guarantees entered
into or modified after December 31, 2002, but does not expect the adoption to
have a material impact on the consolidated financial statements. The Company
adopted the new disclosure requirements for the year ended December 31, 2002.

PARK-OHIO INDUSTRIES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) -- (CONTINUED)

In January 2003, the FASB issued Interpretation No. 46 ("FIN 46"),
"Consolidation of Variable Interest Entities," which clarifies the application
of Accounting Research Bulletin ("ARB") No. 51, "Consolidated Financial
Statements," relating to consolidation of certain entities. First, FIN 46 will
require identification of the Company's participation in variable interest
entities ("VIEs"), which are defined as entities with a level of invested equity
that is not sufficient to fund future activities to permit them to operate on a
stand alone basis, or whose equity holders lack certain characteristics of a
controlling financial interest. Then, for entities identified as VIEs, FIN 46
sets forth a model to evaluate potential consolidation based on an assessment of
which party to the VIE, if any, bears a majority of the exposure to its expected
losses, or stands to gain from a majority of its expected returns. FIN 46 is
effective for all new VIEs created or acquired after January 31, 2003. For VIEs
created or acquired prior to February 1, 2003, the provisions of FIN 46 must be
applied for the first interim or annual period beginning after June 15, 2003.
FIN 46 also sets forth certain disclosures regarding interests in VIEs that are
deemed significant, even if consolidation is not required. The Company is
currently evaluating the effect that the adoption of FIN 46 will have on its
financial position, results of operations and cash flows.

In April 2003, the FASB issued Statement of Financial Accounting Standards
No. 149, "Amendment of Statement 133 on Derivative Instruments and Hedging
Activities ("FAS 149"). FAS 149 amends and clarifies the accounting for
derivative instruments, including certain derivative instruments embedded in
other contracts, and for hedging activities under FAS 133, "Accounting for
Derivative Instruments and Hedging Activities." FAS 149 is generally effective
for contracts entered into or modified after June 30, 2003 and for hedging
relationships designated after June 30, 2003. The Company is currently
evaluating whether or not the adoption of FAS 149 will have an effect on its
financial position, results of operations and cash flows.

In May 2003, the FASB issued Statement of Financial Accounting Standards
No. 150, "Accounting for Certain Financial Instruments with Characteristics of
both Liabilities and Equity ("FAS 150"). FAS 150 requires that certain financial
instruments, which under previous guidance were accounted for as equity, must
now be accounted for as liabilities. The financial instruments affected include
mandatorily redeemable stock, certain financial instruments that require or may
require the issuer to buy back some of its shares in exchange for cash or other
assets and certain obligations that can be settled with shares of stock. FAS 150
is effective for all financial instruments entered into or modified after May
31, 2003 and must be applied to the Company's existing financial instruments
effective July 1, 2003, the beginning of the first fiscal period after June 15,
2003. The Company adopted FAS 150 on June 1, 2003. The adoption of this
statement did not have a material effect on the Company's financial position,
results of operations or cash flows.

NOTE G -- SEGMENTS

The Company operates through three segments: Integrated Logistics Solutions
("ILS"), Aluminum Products and Manufactured Products. ILS is a leading supply
chain logistics provider of production components to large, multinational
manufacturing companies, other manufacturers and distributors. In connection
with the supply of such production components, ILS provides a variety of
value-added, cost-effective supply chain management services. Aluminum Products
manufactures cast aluminum components for automotive, agricultural equipment,
heavy duty truck and construction equipment. Aluminum Products also provides
value-added services such as design and engineering, machining and assembly.
Manufactured Products operates a diverse group of niche manufacturing businesses
that design and manufacture a broad range of high quality products engineered
for specific customer applications. Intersegment sales are immaterial.

PARK-OHIO INDUSTRIES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) -- (CONTINUED)

Results by business segment were as follows:

<Table>
<Caption>
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30 JUNE 30
------------------- -------------------
2003 2002 2003 2002
-------- -------- -------- --------

Net sales, including intersegment sales:
ILS...................................... $ 96,525 $103,985 $188,877 $199,742
Aluminum products........................ 23,931 30,028 47,973 56,503
Manufactured products.................... 39,460 32,612 77,917 64,223
-------- -------- -------- --------
$159,916 $166,625 $314,767 $320,468
======== ======== ======== ========
Income before income taxes and cumulative
effect of accounting change:
ILS...................................... $ 6,237 $ 4,904 $ 12,085 $ 10,366
Aluminum products........................ 3,222 1,631 6,800 3,751
Manufactured products.................... 2,598 612 3,746 1,168
-------- -------- -------- --------
12,057 7,147 22,631 15,285
Corporate costs............................ (1,707) (959) (2,872) (2,129)
Interest expense........................... (6,695) (6,959) (13,452) (13,639)
-------- -------- -------- --------
$ 3,655 $ (771) $ 6,307 $ (483)
======== ======== ======== ========
</Table>

<Table>
<Caption>
JUNE 30 DECEMBER 31
2003 2002
-------- -----------

Identifiable assets were as follows:
ILS....................................................... $273,241 $273,442
Aluminum products......................................... 79,609 79,797
Manufactured products..................................... 153,963 151,880
General corporate......................................... 32,910 37,824
-------- --------
$539,723 $542,943
======== ========
</Table>

NOTE H -- COMPREHENSIVE INCOME (LOSS)

Total comprehensive income (loss) was as follows:

<Table>
<Caption>
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30 JUNE 30
------------------ ------------------
2003 2002 2003 2002
------- ------- ------ --------

Net income (loss)............................. $2,820 $ (406) $5,335 $(48,983)
Foreign currency translation.................. 2,044 2,099 2,770 1,890
------ ------ ------ --------
Total comprehensive income (loss)............. $4,864 $1,693 $8,105 $(47,093)
====== ====== ====== ========
</Table>

PARK-OHIO INDUSTRIES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) -- (CONTINUED)

The components of accumulated comprehensive loss at June 30, 2003 and
December 31, 2002 are as follows:

<Table>
<Caption>
JUNE 30 DECEMBER 31
2003 2002
------- -----------

Foreign currency translation adjustment..................... $ (229) $2,541
Minimum pension liability................................... 5,555 5,555
------ ------
$5,326 $8,096
====== ======
</Table>

NOTE I -- RESTRUCTURING ACTIVITIES

The Company responded to the economic downturn by reducing costs in a
variety of ways, including restructuring businesses and selling non-core
manufacturing assets. These activities, which included asset write-downs and
other exit costs related to the shutdown of facilities, generated restructuring
and asset impairment charges of $19.2 million and $28.5 million in 2002 and
2001, respectively (of which $5.6 million (490 employees) in 2002 and $6.9
million (525 employees) in 2001 related to severance and exit costs). For
further details on the restructuring plan, see Note L to the audited financial
statements contained in the Company's Annual Report on Form 10-K for the year
ended December 31, 2002.

During the first quarter of 2003, the Company completed the sale of
substantially all of the assets of Green Bearing and St. Louis Screw and Bolt
for cash of approximately $7.3 million. No gain or loss was recorded on these
sales. Both of these businesses had been identified as businesses the Company
was selling as part of its restructuring activities.

The accrued liability balance for severance and exit costs and related cash
payments consisted of:

<Table>

2001
Severance and exit charges.................................. $ 6,883
Cash payments............................................... (2,731)
-------
Balance at December 31, 2001................................ 4,152

2002
Severance and exit charges.................................. 5,599
Cash payments............................................... (5,706)
-------
Balance at December 31, 2002................................ 4,045

2003
Cash payments............................................... (1,374)
-------
Balance at June 30, 2003.................................... $ 2,671
=======
</Table>

As of June 30, 2003, all of the 525 employees identified in 2001 and all
but 29 of the 490 employees identified in 2002 had been terminated. The
workforce reductions under the restructuring plan consisted of hourly and
salaried employees at various operating facilities due to either closure or
consolidation.

Net sales for the businesses that were included in net assets held for sale
were $7,129 and $10,167 for the six months ended June 30, 2003 and 2002,
respectively. Operating income for these entities was $23 and $66 for the six
months ended June 30, 2003 and 2002, respectively.

PARK-OHIO INDUSTRIES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) -- (CONTINUED)

NOTE J -- ACCRUED WARRANTY COSTS

The Company estimates the amount of warranty claims on sold products that
may be incurred based on current and historical data. The actual warranty
expense could differ from the estimates made by the Company based on product
performance. The following table presents the changes in the Company's product
warranty liability:

<Table>

Balance at January 1, 2003.................................. $ 3,068
Claims paid during the year............................... (1,440)
Additional warranties issued during the year.............. 539
-------
Balance at June 30, 2003.................................... $ 2,167
=======
</Table>

NOTE K -- INCOME TAXES

The effective income tax rate for the three-month period ended June 30,
2003 was 24%, compared to 40% for the corresponding period in 2002. Only foreign
and state income taxes were provided for in 2003, because federal income taxes
were eliminated due to the recognition of net operating loss carryforwards for
which valuation allowances had been provided for prior to 2003. At December 31,
2002, the Company had net operating loss carryforwards of approximately $25.6
million. Tax benefits related to these carryforwards were fully reserved in
2002, because the Company was in a three-year cumulative loss position.

NOTE L -- DEBT RESTRUCTURING

The revolving credit maturing on June 30, 2004 was refinanced and repaid in
its entirety by the Company on July 30, 2003 with a new revolving credit
facility which matures on July 30, 2007 and is classified as long-term debt.

INDEPENDENT ACCOUNTANTS' REVIEW REPORT

Board of Directors and Shareholder
Park-Ohio Industries, Inc.

We have reviewed the accompanying consolidated balance sheet of Park-Ohio
Industries, Inc. and subsidiaries as of June 30, 2003 and the related
consolidated statements of operations for the three-month and six-month periods
ended June 30, 2003 and 2002, the consolidated statement of shareholder's equity
for the six-month period ended June 30, 2003 and the consolidated statements of
cash flows for the six-month periods ended June 30, 2003 and 2002. These
financial statements are the responsibility of the Company's management.

We conducted our review in accordance with standards established by the
American Institute of Certified Public Accountants. A review of interim
financial information consists principally of applying analytical procedures to
financial data, and making inquiries of persons responsible for financial and
accounting matters. It is substantially less in scope than an audit conducted in
accordance with auditing standards generally accepted in the United States,
which will be performed for the full year with the objective of expressing an
opinion regarding the financial statements taken as a whole. Accordingly, we do
not express such an opinion.

Based upon our reviews, we are not aware of any material modifications that
should be made to the accompanying consolidated financial statements referred to
above for them to be in conformity with accounting principles generally accepted
in the United States.

We have previously audited, in accordance with auditing standards generally
accepted in the United States, the consolidated balance sheet of Park-Ohio
Industries, Inc. and subsidiaries as of December 31, 2002 and the related
consolidated statements of operations, shareholder's equity, and cash flows for
the year then ended, not presented herein, and in our report dated February 25,
2003, we expressed an unqualified opinion on those consolidated financial
statements and included an explanatory paragraph for a change in accounting for
goodwill. In our opinion, the information set forth in the accompanying
consolidated balance sheet as of December 31, 2002, is fairly stated, in all
material respects, in relation to the consolidated balance sheet from which it
has been derived.

As discussed in Note B to the consolidated financial statements, effective
June 30, 2003, the Company changed its method of accounting for inventories at
certain subsidiaries.

/s/ Ernst & Young LLP

Cleveland, Ohio
August 12, 2003

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS

Financial information for the three-month and six-month periods ended June
30, 2003 is not directly comparable to the financial information for the same
periods in 2002 primarily due to restructuring and other unusual charges in 2002
plus divestitures and an acquisition in 2002 and divestitures in 2003.
Restructuring charges of $622 thousand and $3.6 million were recorded in first
and second quarter 2002, respectively. The Company divested Castle Rubber in
second quarter 2002, and Green Bearing and St. Louis Screw in first quarter
2003. The Company purchased the assets of Ajax Magnethermic in third quarter
2002.

OVERVIEW

The Company operates through three segments, ILS, Aluminum Products and
Manufactured Products. ILS is a leading supply chain logistics provider of
production components to large, multinational manufacturing companies, other
manufacturers and distributors. In connection with the supply of such production
components, ILS provides a variety of value-added, cost-effective supply chain
management services. The principal customers of ILS are in the semiconductor
equipment, heavy-duty truck, industrial equipment, aerospace and defense,
electrical controls, HVAC, vehicle parts and accessories, appliances, and lawn
and garden equipment industries. Aluminum Products manufactures cast aluminum
components for automotive, agricultural equipment, heavy-duty truck and
construction equipment manufacturers. Aluminum Products also provides
value-added services such as design and engineering, machining and assembly.
Manufactured Products operates a diverse group of niche manufacturing businesses
that design and manufacture a broad range of high quality products engineered
for specific customer applications. The principal customers of Manufactured
Products are OEMs and end-users in the aerospace, automotive, steel, forging,
railroad, truck, oil, food processing and consumer appliance industries.

The Company's sales volumes and profitability declined during 2001, due to
overall weakness in the manufacturing economy, and particularly to contraction
in the heavy-duty truck and automotive industries. Despite these sales declines,
the Company retained or gained market share in most major markets served. The
Company responded to this downturn by reducing costs, increasing prices on
targeted products, restructuring many of its businesses and selling non-core
manufacturing assets. The Company continued and extended restructuring its
businesses through 2001 and 2002, closing 20 supply chain logistics facilities,
and closing or selling eight manufacturing plants in those two years. With
regard to these actions, the Company recorded restructuring and impairment
charges of $28.5 million in 2001 and $19.2 million in 2002. Management's actions
were aimed to position the Company for increased profitability when the
manufacturing economy stabilizes and returns to growth.

The Company's actions resulted in increased operating income in 2002
compared to 2001, despite flat sales. Operating income rose to $16.6 million in
2002, after restructuring and impairment charges of $19.2 million, compared to
an operating loss of $3.9 million in 2001, after restructuring and impairment
charges of $28.5 million and goodwill amortization of $3.7 million.

The Company's profitability improved again in first half 2003, on
continuing flat sales. Compared to first half 2002, operating income increased
50%, or $6.6 million, to $19.8 million, on a 2% sales decline. First half 2002
operating income was negatively impacted by $4.3 million in restructuring
charges. During first half 2003, the Company continued to reduce costs and
restructure businesses, including consolidating two logistics facilities and
selling two additional non-core manufacturing businesses.

The Company sold substantially all the assets of St. Louis Screw and Bolt
on January 29, 2003 and Green Bearing on February 21, 2003 for cash totaling
approximately $7.3 million.

The Company sold substantially all the assets of Castle Rubber Company on
April 26, 2002 for cash of approximately $2.5 million. The Company purchased
substantially all the assets of Ajax Magnethermic Corp. on September 10, 2002
for cash of approximately $5.5 million.

On January 1, 2002, the Company adopted Statement of Financial Accounting
Standards No. 142, "Goodwill and Other Intangible Assets" ("FAS 142"). Under FAS
142, the Company reviewed its goodwill

and other intangible assets and recorded a non-cash goodwill impairment charge
of $48.8 million, which was recorded as the cumulative effect of a change in
accounting principle effective January 1, 2002.

Effective June 30, 2003, the Company changed its method of accounting for
the 15% of its inventories utilizing the LIFO method to the FIFO method. As
required by generally accepted accounting principles, the Company has restated
its 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).

RESULTS OF OPERATIONS

Six Months 2003 versus Six Months 2002

Net sales decreased by $5.7 million, or 2%, from $320.5 million for the
first six months of 2002 to $314.8 million in 2003. ILS net sales declined 5%,
or $10.9 million, of which $3.3 million related to the sale of Green Bearing and
the remainder related primarily to continued volume weakness in customer
industries. Aluminum Products net sales were 15%, or $8.5 million lower,
primarily due to the ending of $8.3 million of certain sales contracts.
Manufactured Products net sales increased 21%, or $13.7 million, primarily due
to increased sales in the induction business.

Gross profit increased by $4.2 million, or 9%, to $50.3 million for the
first six months of 2003 from $46.1 million for the same period of 2002, and the
Company's gross margin increased to approximately 16.0% for the first six months
of 2003, from 14.4% for the same period of 2002. ILS gross margin increased,
primarily due to lower inventory costs, facility costs and other cost
reductions, partially offset by the absorption of fixed overhead over a smaller
sales base. Aluminum Products gross margin increased significantly, primarily as
a result of restructuring and cost reductions and higher margins on new
contracts. Gross margin in the Manufactured Products segment improved, primarily
as a result of increased sales and overhead efficiencies achieved in the
induction business.

Selling, general and administrative ("SG&A") expenses increased by 6%, or
$1.8 million, to $30.5 million for the first six months of 2003 from $28.7
million for the same period in 2002. SG&A expenses increased by $3.7 million due
to the net effect of acquisitions and divestitures, partially offset by cost
reductions in the ILS and Aluminum Products segments. Consolidated SG&A expenses
as a percentage of net sales were 9.7% for the first six months of 2003 as
compared to 8.9% for the first six months of 2002, primarily due to a $.8
million reduction of net pension credits reflecting less favorable returns on
pension plan assets.

Interest expense decreased $.1 million from $13.6 million in the first six
months of 2002 to $13.5 million in the same period of 2003, primarily due to
reduced borrowings in 2003. During the first six months of 2003, the Company
averaged outstanding borrowings of $324.2 million as compared to $333.8 million
for the corresponding period of the prior year. The $9.6 million decrease
related primarily to lower average working capital levels during the first six
months and cash from the sale of non-core manufacturing assets. The average
interest rate of 8.30% for the first half of 2003 was 13 basis points higher
than the average rate of 8.17% for the same period in 2002.

The effective income tax rate for the six-month period ended June 30, 2003
was 15%, compared to 62% for the corresponding period in 2002. Only foreign and
certain state income taxes were provided for in 2003 because federal income
taxes were not owed due to the recognition of net operating loss carryforwards
for which valuation allowances had been provided for prior to 2003. At December
31, 2002, the Company had net operating loss carryforwards of approximately
$25.6 million. Tax benefits related to these carryforwards were fully reserved
in 2002 because the Company was in a three-year cumulative loss position.

Second Quarter 2003 versus Second Quarter 2002

Net sales decreased by $6.7 million, or 4%, from $166.6 million in second
quarter 2002 to $159.9 million in the same quarter 2003. ILS net sales declined
7%, or $7.5 million, of which $2.1 million related to the sale
16

of Green Bearing and the remainder primarily to continued volume weakness in
customer industries. Aluminum Products net sales declined 20%, or $6.1 million,
due to a $4.2 million decrease relating to the ending of certain sales
contracts, and downturns in volumes on certain parts. Manufactured Products net
sales increased 21%, or $6.8 million, primarily due to increased sales in the
induction business.

Gross profit increased by $1.5 million, or 6%, to $25.8 million for second
quarter 2003 from $24.4 million for the same quarter 2002, and the Company's
gross margin increased to approximately 16.2% for second quarter 2003, from
14.6% for the same quarter 2002. ILS gross margin increased, primarily due to
savings from restructuring and other cost reductions, partially offset by the
absorption of fixed overhead over a smaller sales base. Aluminum Products gross
margin increased significantly, primarily as a result of restructuring and cost
reductions and higher margins on new contracts. Gross margin in the Manufactured
Products segment improved, primarily as a result of increased sales and overhead
efficiencies achieved in the induction business.

SG&A expenses increased by 6%, or $.9 million, to $15.5 million for second
quarter 2003 from $14.6 million for the same quarter 2002. SG&A expenses
increased by $2.1 million due to the net effect of acquisitions and
divestitures, partially offset by cost reductions in the ILS and Aluminum
Products segments. Consolidated SG&A expenses as a percentage of net sales were
9.7% for second quarter 2003 as compared to 8.7% for the first three months of
2002, primarily due to a $.4 million reduction of net pension credits reflecting
less favorable returns on pension plan assets.

Interest expense decreased $.3 million from $7.0 million in second quarter
2002 to $6.7 million in the same quarter 2003 primarily due to reduced
borrowings in 2003. During second quarter 2003, the Company averaged outstanding
borrowings of $319.7 million as compared to $329.7 million for the corresponding
period of the prior year. The $10.0 million decrease related primarily to lower
average working capital levels during the quarter and cash from the sale of
non-core manufacturing assets. The average interest rate of 8.38% for the
current quarter was 6 basis points lower than the average rate of 8.44% for
second quarter 2002.

The effective income tax rate for second quarter 2003 was 23%, compared to
47% for the corresponding period in 2002. Only foreign and certain state income
taxes were provided for in 2003 because federal income taxes were not owed due
to the recognition of net operating loss carryforwards for which valuation
allowances had been provided for prior to 2003. At December 31, 2002, the
company had net operating loss carryforwards of approximately $25.6 million. Tax
benefits related to these carryforwards were fully reserved in 2002, because the
Company was in a three-year cumulative loss position.

SEASONALITY; VARIABILITY OF OPERATING RESULTS

The Company's results of operations are typically stronger in the first six
months rather than the last six months of each calendar year due to scheduled
plant maintenance in the third quarter to coincide with customer plant shutdowns
and due to holidays in the fourth quarter.

The timing of orders placed by the Company's customers has varied with,
among other factors, orders for customers' finished goods, customer production
schedules, competitive conditions and general economic conditions. The
variability of the level and timing of orders has, from time to time, resulted
in significant periodic and quarterly fluctuations in the operations of the
Company's business units. Such variability is particularly evident at the
capital equipment businesses included in the Manufactured Products segment,
which typically ship a few large systems per year.

FORWARD-LOOKING STATEMENTS

This Form 10-Q contains certain statements that are "forward-looking
statements" within the meaning of Section 27A of the Securities Act and Section
21E of the Exchange Act. Certain statements in this Management's Discussion and
Analysis of Financial Condition and Results of Operations contain forward-
looking statements, including without limitation, credit availability, levels
and funding of capital expenditures and trends for the remainder of 2003.
Forward-looking statements are necessarily subject to risks, uncertainties and
other factors, many of which are outside our control, which could cause actual
results to differ materially from such statements. These uncertainties and other
factors include such things as: general business

conditions, competitive factors, including pricing pressures and product
innovation; raw material availability and pricing; changes in our relationships
with customers and suppliers; the ability of the Company to successfully
integrate recent and future acquisitions into its existing operations; changes
in general domestic economic conditions such as inflation rates, interest rates,
foreign currency exchange rates, tax rates and adverse impacts to us, our
suppliers and customers from acts of terrorism or hostilities; our ability to
meet various covenants, including financial covenants, contained in our credit
agreement and the indenture governing the Senior Subordinated Notes;
increasingly stringent domestic and foreign governmental regulations including
those affecting the environment; inherent uncertainties involved in assessing
our potential liability for environmental remediation-related activities; the
outcome of pending and future litigation and other claims; dependence on the
automotive and heavy truck industries; dependence on key management; and
dependence on information systems. Any forward-looking statement speaks only as
of the date on which such statement is made, and we undertake no obligation to
update any forward-looking statement, whether as a result of new information,
future events or otherwise. In light of these and other uncertainties, the
inclusion of a forward-looking statement herein should not be regarded as a
representation by us that our plans and objectives will be achieved.

REVIEW BY INDEPENDENT ACCOUNTANTS

The consolidated financial statements at June 30, 2003, and for the
three-month and six-month periods ended June 30, 2003 and 2002, have been
reviewed, prior to filing, by Ernst & Young LLP, the Company's independent
accountants, and their report is included herein.

ITEM 4. CONTROLS AND PROCEDURES

The Company's chief executive officer and chief financial officer, after
evaluating the effectiveness of the Company's "disclosure controls and
procedures" (as defined in Rules 13a-15(e) and 15d-15(e) of the Securities
Exchange Act of 1934) as of the end of the period covered by this quarterly
report, have concluded that, as of the end of such period, the Company's
disclosure controls and procedures were effective and designed to ensure that
material information relating to the Company and the Company's consolidated
subsidiaries would be made known to them by others within those entities.

There were no significant changes in the Company's internal control over
financial reporting or in other factors that occurred during the period covered
by this quarterly report that has materially affected, or is reasonably likely
to materially affect, the Company's internal control over financial reporting.

PART II

OTHER INFORMATION

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

(a) The following exhibits are included herein:

(4) Credit Agreement dated as of July 30, 2003 among Park-Ohio
Industries, Inc. as borrower and various financial institutions

(15) Letter re: unaudited financial information

(18) Letter re: change in accounting principles

(31.1) Principal Executive Officer's Certification Pursuant to Section
302 of the Sarbanes-Oxley Act of 2002.

(31.2) Principal Financial Officer's Certification Pursuant to Section
302 of the Sarbanes-Oxley Act of 2002.

(32) Certification requirement under Section 906 of the Sarbanes-Oxley
Act of 2002

(b) The Company did not file any reports on Form 8-K during the three
months ended June 30, 2003.

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.

PARK-OHIO INDUSTRIES, INC.
------------------------------------
(REGISTRANT)

By /s/ RICHARD P. ELLIOTT
-----------------------------------
Name: Richard P. Elliott
Title: Vice President and Chief
Financial Officer (Principal
Financial and Accounting
Officer)

Dated August 13, 2003
---------------------------------

EXHIBIT INDEX

QUARTERLY REPORT ON FORM 10-Q

PARK-OHIO INDUSTRIES, INC. AND SUBSIDIARIES
FOR THE QUARTER ENDED JUNE 30, 2003

<Table>
<Caption>
EXHIBIT
- -------

(4) Credit Agreement dated as of July 30, 2003 among Park-Ohio
Industries Inc. as borrower and various financial
institutions
(15) Letter re: unaudited financial information
(18) Letter re: change in accounting principles
(31.1) Principal Executive Officer's Certification Pursuant to
Section 302 of the Sarbanes-Oxley Act of 2002.
(31.2) Principal Financial Officer's Certification Pursuant to
Section 302 of the Sarbanes-Oxley Act of 2002.
(32) Certification requirement under Section 906 of the
Sarbanes-Oxley Act of 2002
</Table>