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

FORM 10-Q

(MARK ONE)

[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD
ENDED SEPTEMBER 30, 1999, OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD
FROM ____________ TO ____________

COMMISSION FILE NO. 0-3134

PARK-OHIO HOLDINGS CORP.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

OHIO 34-1867219
- ------------------------------------------ ------------------------------------------
(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)

REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: 216/692-7200
PARK-OHIO HOLDINGS CORP. IS A SUCCESSOR ISSUER TO PARK-OHIO INDUSTRIES, INC.

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 [ ]

Number of shares outstanding of registrant's Common Stock, par value $1.00 per
share, as of October 31, 1999: 11,147,462 including 572,271 shares in treasury.

The Exhibit Index is located on page 20.

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2

PARK-OHIO HOLDINGS CORP. AND SUBSIDIARIES

INDEX

PART I. FINANCIAL INFORMATION
Item 1. Financial Statements (Unaudited)
Consolidated balance sheets--September 30, 1999 and December
31, 1998
Consolidated statements of income--Nine months and three
months ended September 30, 1999 and 1998
Consolidated statements of shareholders' equity--Nine months
ended September 30, 1999
Consolidated statements of cash flows--Nine months ended
September 30, 1999 and 1998
Notes to consolidated financial statements--September 30,
1999
Independent accountants' review report
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations
Item 3. Quantitative and Qualitative Disclosures About Market Risk

PART II. OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security Holders
Item 6. Exhibits and Reports on Form 8-K

SIGNATURE

EXHIBIT INDEX

2
3

PART I

FINANCIAL INFORMATION

3
4

PARK-OHIO HOLDINGS CORP. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS

(UNAUDITED)
SEPTEMBER 30, DECEMBER 31,
1999 1998
------------- ------------
(DOLLARS IN THOUSANDS)

ASSETS
Current Assets
Cash and cash equivalents................................. $ 2,174 $ 4,320
Accounts receivable, less allowances for doubtful accounts
of $2,805 at September 30, 1999 and $2,803 at December
31, 1998............................................... 116,080 95,718
Inventories............................................... 183,706 150,052
Deferred tax assets....................................... 2,232 2,232
Other current assets...................................... 7,040 5,468
-------- --------
Total Current Assets.............................. 311,232 257,790
Property, Plant and Equipment............................... 213,670 160,625
Less accumulated depreciation............................. 82,174 70,468
-------- --------
131,496 90,157
Other Assets
Excess purchase price over net assets acquired, net of
accumulated amortization of $10,831 at September 30,
1999 and $8,105 at December 31, 1998................... 131,328 99,351
Deferred taxes............................................ 8,900 8,900
Other..................................................... 48,561 33,356
-------- --------
$631,517 $489,554
======== ========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities
Trade accounts payable.................................... $ 63,437 $ 46,410
Accrued expenses.......................................... 57,166 32,076
Current portion of long-term liabilities.................. 2,120 2,372
-------- --------
Total Current Liabilities......................... 122,723 80,858
Long-Term Liabilities, less current portion
Long-term debt............................................ 327,708 237,483
Other postretirement benefits............................. 25,625 26,286
Other..................................................... 3,688 3,740
-------- --------
357,021 267,509
Shareholders' Equity
Capital stock, par value $1 a share:
Serial Preferred Stock................................. -0- -0-
Common Stock........................................... 11,148 11,148
Additional paid-in capital................................ 55,684 55,755
Retained earnings......................................... 93,180 80,420
Treasury stock, at cost................................... (7,245) (4,554)
Accumulated other comprehensive earnings (loss)........... (994) (1,582)
-------- --------
151,773 141,187
-------- --------
$631,517 $489,554
======== ========

Note: The balance sheet at December 31, 1998 has been derived from the audited
financial statements at that date, but 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.

4
5

PARK-OHIO HOLDINGS CORP. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)

THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30 SEPTEMBER 30
-------------------- --------------------
1999 1998 1999 1998
-------- -------- -------- --------
(DOLLARS IN THOUSANDS-EXCEPT PER SHARE DATA)

Net sales....................................... $178,087 $133,370 $536,407 $410,638
Cost of products sold........................... 146,542 109,474 440,082 339,824
-------- -------- -------- --------
Gross profit.................................. 31,545 23,896 96,325 70,814
Selling, general and administrative expenses.... 18,108 14,547 56,255 42,077
-------- -------- -------- --------
Operating income.............................. 13,437 9,349 40,070 28,737
Interest expense................................ 6,658 4,233 17,729 12,727
-------- -------- -------- --------
Income before income taxes.................... 6,779 5,116 22,341 16,010
Income taxes.................................... 2,903 2,200 9,581 6,885
-------- -------- -------- --------
Net income.................................... $ 3,876 $ 2,916 $ 12,760 $ 9,125
======== ======== ======== ========
Net income per common share:
Basic......................................... $ .36 $ .27 $ 1.19 $ .83
======== ======== ======== ========
Diluted....................................... $ .36 $ .26 $ 1.17 $ .81
======== ======== ======== ========
Common shares used in the computation:
Basic......................................... 10,664 10,995 10,723 10,994
======== ======== ======== ========
Diluted....................................... 10,827 11,176 10,868 11,230
======== ======== ======== ========

See notes to consolidated financial statements.

5
6

PARK-OHIO HOLDINGS CORP. AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY (UNAUDITED)

ACCUMULATED
OTHER
ADDITIONAL COMPREHENSIVE
COMMON PAID-IN RETAINED TREASURY EARNINGS
STOCK CAPITAL EARNINGS STOCK (LOSS) TOTAL
------- ---------- -------- -------- ------------- --------
(DOLLARS IN THOUSANDS)

Balance January 1,
1999.................... $11,148 $55,755 $80,420 $(4,554) $(1,582) $141,187
Comprehensive income:
Net income............ 12,760 12,760
Foreign currency
translation
adjustment......... 588 588
--------
Comprehensive
income........ 13,348
Exercise of stock
options............... (71) 330 259
Purchase of treasury
stock................. (3,021) (3,021)
------- ------- ------- ------- ------- --------
Balance September 30,
1999.................. $11,148 $55,684 $93,180 $(7,245) $ (994) $151,773
======= ======= ======= ======= ======= ========

See notes to consolidated financial statements.

6
7

PARK-OHIO HOLDINGS CORP. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

NINE MONTHS ENDED
SEPTEMBER 30
-----------------------
1999 1998
--------- ----------
(DOLLARS IN THOUSANDS)

OPERATING ACTIVITIES
Net income................................................ $12,760 $ 9,125
Adjustments to reconcile net income to net cash provided
(used) by operating activities:
Depreciation and amortization.......................... 15,090 10,393
------- --------
27,850 19,518
Changes in operating assets and liabilities excluding
acquisitions of businesses:
Accounts receivable.................................... (8,312) (5,599)
Inventories and other current assets................... (25,268) (15,930)
Accounts payable and accrued expenses.................. 12,660 6,990
Other.................................................. (9,147) (1,106)
------- --------
Net Cash (Used) Provided by Operating Activities..... (2,217) 3,873
INVESTING ACTIVITIES
Purchases of property, plant and equipment, net........... (13,226) (20,677)
Costs of acquisitions, net of cash acquired............... (65,237) (6,036)
Other..................................................... (445) (101)
------- --------
Net Cash (Used) by Investing Activities................ (78,908) (26,814)
FINANCING ACTIVITIES
Proceeds from bank arrangements........................... 88,500 36,500
Issuance of 9.25% Senior Subordinated Notes, net of
deferred financing costs............................... 49,508 -0-
Payments on debt.......................................... (56,267) (11,039)
Purchase of treasury stock................................ (3,021) (816)
Issuance of common stock under stock option plan.......... 259 253
------- --------
Net Cash Provided by Financing Activities.............. 78,979 24,898
------- --------
(Decrease) Increase in Cash and Cash Equivalents....... (2,146) 1,957
Cash and Cash Equivalents at Beginning of Period....... 4,320 1,814
------- --------
Cash and Cash Equivalents at End of Period............. $ 2,174 $ 3,771
======= ========

See notes to consolidated financial statements.

7
8

PARK-OHIO HOLDINGS CORP. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
SEPTEMBER 30, 1999
(DOLLARS IN THOUSANDS- EXCEPT PER SHARE DATA)

NOTE A -- BASIS OF PRESENTATION

The consolidated financial statements include the accounts of Park-Ohio
Holdings Corp. and its subsidiaries ("the Company"). All significant
intercompany transactions have been eliminated in consolidation.

The accompanying unaudited consolidated financial statements have been
prepared in accordance with generally accepted accounting principles 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 generally accepted accounting principles 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 and nine-month periods ended
September 30, 1999 are not necessarily indicative of the results that may be
expected for the year ending December 31, 1999. 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, 1998.

NOTE B -- ACQUISITIONS AND DISPOSITION

During the first nine months of 1999, the Company acquired all of the stock
of The Metalloy Corporation ("Metalloy"), Columbia Nut and Bolt Corp.
("Columbia"), Industrial Fasteners Corporation ("Industrial"), M.P. Colinet
("Colinet") and substantially all of the assets of St. Louis Screw & Bolt Co.
("St. Louis Screw") and PMC Industries ("PMC") for cash. Metalloy is a full
service aluminum casting and machining company. Columbia and Industrial are
logistics providers of fastener related components. St. Louis Screw is a
manufacturer of bolts and PMC and Colinet provide capital equipment and
associated parts for the oil drilling industry. Each of these transactions has
been accounted for as a purchase. The purchase price and the results of
operations of each of these businesses prior to their respective dates of
acquisition were not deemed to be significant as defined in Regulation S-X.

During 1998, the Company completed the acquisitions of Direct Fasteners
Limited ("Direct") and GIS Industries, Inc. ("Gateway"). The transactions have
been accounted for as purchases. Direct is a logistics provider of fastener
related components. Gateway is a logistics provider of fastener related
components and manufacturer of fabricated metal products and fasteners. The
aggregate purchase price and the results of operations of Direct and Gateway
prior to their respective dates of acquisition were not deemed to be significant
as defined in Regulation S-X.

During September 1998, the Company completed the sale of the assets of
Friendly and Safe Packaging Systems, Inc. to Kerr Group. The transaction had an
immaterial effect on the consolidated results of operations and financial
position of the Company.

NOTE C -- INVENTORIES

The components of inventory consist of the following:

SEPTEMBER 30, DECEMBER 31,
1999 1998
------------- ------------

In process and finished goods.............................. $152,898 $124,783
Raw materials and supplies................................. 30,808 25,269
-------- --------
$183,706 $150,052
======== ========

8
9
PARK-OHIO HOLDINGS CORP. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) -- CONTINUED

NOTE D -- SHAREHOLDERS' EQUITY

At September 30, 1999, capital stock consists of (i) Serial Preferred Stock
of which 632,470 shares were authorized and none were issued and (ii) Common
Stock of which 40,000,000 shares were authorized and 11,147,462 shares were
issued including 521,271 shares held in treasury.

NOTE E -- NET INCOME PER COMMON SHARE

The following table sets forth the computation of basic and diluted
earnings per share:

THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30 SEPTEMBER 30
----------------------- ----------------------
1999 1998 1999 1998
---------- --------- --------- ---------
(DOLLARS IN THOUSANDS -- EXCEPT PER SHARE DATA)

NUMERATOR
Net income........................................... $ 3,876 $2,916 $12,760 $ 9,125
======= ====== ======= =======
DENOMINATOR
Denominator for basic earnings per share-weighted
average shares..................................... 10,664 10,995 10,723 10,994
Effect of dilutive securities:
Employee stock options............................. 163 181 145 236
------- ------ ------- -------
Denominator for diluted earnings per share-adjusted
weighted average shares and assumed conversions.... 10,827 11,176 10,868 11,230
======= ====== ======= =======
Net income per common share-basic.................... $ .36 $ .27 $ 1.19 $ .83
======= ====== ======= =======
Net income per common share-diluted.................. $ .36 $ .26 $ 1.17 $ .81
======= ====== ======= =======

NOTE G -- ACCOUNTING PRONOUNCEMENTS

In March 1998, the American Institute of Certified Public Accountants
("AICPA") issued Statement of Position ("SOP") 98-1, "Accounting for the Cost of
Computer Software Developed or Obtained for Internal Use". The SOP requires
companies to capitalize qualifying computer software costs incurred during the
application development stage. This statement was applied prospectively and is
effective for financial statements for fiscal years beginning after December 15,
1998. The impact of this new standard did not have a significant effect on the
Company's financial position or results of operations.

In April 1998, the AICPA issued SOP 98-5, "Accounting for the Costs of
Start-up Activities". The SOP requires that costs of start-up activities be
expensed as incurred. The SOP is effective for fiscal years beginning after
December 15, 1998. The Company adopted the SOP in the first quarter of 1999. The
impact of adoption of the SOP on the Company's financial position, results of
operations or cash flows was immaterial.

The Financial Accounting Standards Board's Statement of Financial
Accounting Standards No. 133, "Accounting for Derivative Instruments and Hedging
Activities" was issued in June 1998. Statement 133 requires derivatives to be
recorded on the balance sheet at fair value and establishes accounting for three
different types of hedges: hedges of changes in fair value of assets,
liabilities, or firm commitments; hedges of the variable cash flows of
forecasted transactions; and hedges of foreign currency exposures of net
investments in foreign operations. Statement 133 is effective for years
beginning after June 15, 2000 and is not expected to have a significant impact
on the Company's financial position or results of operations.

9
10
PARK-OHIO HOLDINGS CORP. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) -- CONTINUED

NOTE H -- SEGMENTS

During the first quarter of 1999 the Company, upon completion of the
acquisition of Metalloy, redefined its operating segments. The Company retained
its Integrated Logistics Solutions ("ILS") segment and further segregated its
former Manufactured Products segment into an Aluminum Products segment and a
Manufactured Products segment. ILS is a leading national supplier of fasteners
(e.g. nuts, bolts and screws) and other industrial products to original
equipment manufacturers, other manufacturers and distributors. In connection
with the supply of such industrial products, ILS provides a variety of
value-added, cost-effective procurement solutions. Aluminum Products
manufactures cast aluminum components primarily for automotive original
equipment manufacturers. In addition, Aluminum Products also provides
value-added services such as design and engineering, machining and assembly.
Manufactured Products is a diverse group of manufacturing businesses that design
and manufacture a broad range of high quality products which includes capital
equipment, rubber products and forged and machined products for specific
customer applications.

Results by Business Segment were as follows:

THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30 SEPTEMBER 30
-------------------- --------------------
1999 1998 1999 1998
-------- -------- -------- --------

Net sales, including intersegment sales:
ILS.......................................... $112,710 $ 86,781 $328,245 $270,243
Aluminum products............................ 29,686 9,620 98,433 29,383
Manufactured products........................ 35,691 36,969 109,729 111,012
-------- -------- -------- --------
$178,087 $133,370 $536,407 $410,638
======== ======== ======== ========
Income before income taxes:
ILS.......................................... $ 10,215 $ 8,421 $ 31,210 $ 25,125
Aluminum products............................ 1,860 306 8,975 1,411
Manufactured products........................ 3,957 2,861 6,694 7,305
-------- -------- -------- --------
16,032 11,588 46,879 33,841
Amortization of excess purchase price over
net assets acquired....................... (1,018) (506) (2,726) (1,496)
Corporate costs.............................. (1,577) (1,732) (4,083) (3,608)
Interest expense............................. (6,658) (4,234) (17,729) (12,727)
-------- -------- -------- --------
$ 6,779 $ 5,116 $ 22,341 $ 16,010
======== ======== ======== ========

SEPTEMBER 30, DECEMBER 31,
1999 1998
--------------- -------------

Identifiable assets were as follows:
ILS................................ $357,702 $288,713
Aluminum products.................. 93,875 40,063
Manufactured products.............. 162,138 147,009
General corporate.................. 17,802 13,769
-------- --------
$631,517 $489,554
======== ========

10
11
PARK-OHIO HOLDINGS CORP. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) -- CONTINUED

NOTE I -- FINANCING ARRANGEMENTS

On June 3, 1999, the Company sold an additional $50 million of its 9.25%
Senior Subordinated Notes due 2007. The Company used the net proceeds to reduce
the amount borrowed under its credit facility. Interest on the Senior
Subordinated Notes is payable semi-annually on June 1 and December 1 of each
year.

On November 1, 1999, the Company amended its credit agreement with a group
of banks under which it may borrow up to $175 million on an unsecured basis.
Interest is payable quarterly at the prime lending rate less 1% to plus .2% or
at Park-Ohio's election at LIBOR plus .9% to 2.2%. The interest rate is
dependent on the aggregate amounts borrowed under the agreement.

11
12

INDEPENDENT ACCOUNTANTS' REVIEW REPORT

Board of Directors and Shareholders
Park-Ohio Holdings Corp.

We have reviewed the accompanying consolidated balance sheet of Park-Ohio
Holdings Corp. and subsidiaries as of September 30, 1999, and the related
consolidated statements of income for the three months and nine months ended
September 30, 1999 and 1998, the consolidated statement of shareholders' equity
for the nine months ended September 30, 1999 and the consolidated statements of
cash flows for the nine months ended September 30, 1999 and 1998. 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 generally accepted auditing standards, 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 generally accepted accounting
principles.

We have previously audited, in accordance with generally accepted auditing
standards, the consolidated balance sheet of Park-Ohio Holdings Corp. and
subsidiaries as of December 31, 1998 and the related consolidated statements of
income, shareholders' equity, and cash flows for the year then ended, not
presented herein, and in our report dated February 15, 1999, we expressed an
unqualified opinion on those consolidated financial statements. In our opinion,
the information set forth in the accompanying consolidated balance sheet as of
December 31, 1998, is fairly stated, in all material respects, in relation to
the consolidated balance sheet from which it is derived.
/s/ Ernst & Young LLP

Cleveland, Ohio
October 20, 1999

12
13

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

The consolidated financial statements of the Company include the accounts
of Park-Ohio Holdings Corp. and its subsidiaries. All significant intercompany
transactions have been eliminated in consolidation. The financial information
for the nine and three-month periods ended September 30, 1999 is not directly
comparable on a period-to-period basis to the financial information for the nine
and three-month periods ended September 30, 1998 due to acquisitions made in
1998 and 1999. During 1998, the Company acquired two businesses for $40.2
million. In October the Company acquired all of the shares of GIS Industries,
Inc. ("Gateway"). Gateway is a logistics provider of fastener related components
and a manufacturer of metal products and fasteners. In April the Company
acquired all of the shares of Direct Fasteners Limited ("Direct"), a logistics
provider of fastener related components located in Ontario, Canada. During the
first nine months of 1999, the Company acquired six businesses for an aggregate
purchase price of $65.2 million. In January, the Company acquired all of the
shares of The Metalloy Corporation ("Metalloy") and substantially all of the
assets of St. Louis Screw & Bolt Co. ("St. Louis Screw"). Metalloy is a full
service aluminum casting and machining company. St. Louis Screw is a
manufacturer of bolts. In February, the Company acquired substantially all of
the assets of PMC Industries, ("PMC") and, in September, the Company acquired
all of the shares of M.P. Colinet ("Colinet"). PMC and Colinet provide capital
equipment and associated parts for the oil drilling industry. In July, the
Company acquired all of the shares of Columbia Nut and Bolt Corp. ("Columbia")
and Industrial Fasteners Corporation ("Industrial"). Columbia and Industrial are
logistics providers of fastener related components. Each of these transactions
has been accounted for as a purchase and consequently their results are included
in the consolidated financial statements from their respective dates of
acquisition.

OVERVIEW

The Company operates diversified manufacturing and logistics businesses
that serve a wide variety of industrial markets. The Company manages its
businesses based upon three operating segments: Integrated Logistics Solutions
("ILS"), Aluminum Products, and Manufactured Products. ILS is a leading national
supplier of fasteners (e.g., nuts, bolts and screws) and other industrial
products to original equipment manufacturers ("OEMs"), other manufacturers and
distributors. In connection with the supply of such industrial products, ILS
provides a variety of value-added, cost-effective procurement solutions. The
principal customers of ILS are in the transportation, industrial, electrical and
lawn and garden equipment industries. Aluminum Products manufactures cast
aluminum components primarily for automotive OEMs. 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 automotive, railroad, truck
and aerospace industries.

Between 1993 and 1998, the Company has grown significantly, both internally
and through acquisitions. Over this period, the Company's net sales increased at
a 42% compounded annual growth rate ("CAGR"), from $94.5 million to $551.8
million, and income from continuing operations on a fully taxed basis increased
at a 40% CAGR from $2.4 million to $12.9 million.

Recent growth has been primarily attributable to the Company's strategy of
making selective acquisitions in order to complement internal growth. The
Company has acquired businesses with potential for: (i) significant cost
reductions through improved labor, supplier and customer relations and increased
purchasing power and (ii) revenue enhancement due to better asset utilization
and management practices, as well as increased access to capital. The Company's
internal growth has been driven primarily by the addition of ILS customers under
total fastening service ("TFS") contracts and by the leveraging of existing
customer relationships in the Aluminum and Manufactured Products segments.

Between January 1, 1994 and September 30, 1999, the Company's continuing
operations incurred $77.4 million of capital expenditures, the majority of which
was used to expand and upgrade existing manufacturing facilities and enhance the
Company's management information systems.

13
14

RESULTS OF OPERATIONS

FIRST NINE MONTHS OF 1999 VERSUS FIRST NINE MONTHS OF 1998

Net sales increased by $125.8 million, or 31%, from $410.6 million for the
first nine months of 1998 to $536.4 million for the first nine months of 1999.
This growth results primarily from acquisitions that the Company has made
subsequent to September 30, 1998 and relates primarily to the ILS and the
Aluminum Products segments. For ILS, the growth in net sales amounted to $55.8
million of which $42.5 million related to acquisitive growth and the remainder
to internal growth. For Aluminum Products, net sales increased by $69.0 million
and related primarily to the acquisition of Metalloy.

Gross profit increased by $25.5 million, or 36%, from $70.8 million for the
first nine months of 1998 to $96.3 million for the first nine months of 1999 and
is directly related to acquisitions made in the preceding twelve months. The
Company's consolidated gross margin increased to 18.0% for the first nine months
of 1999 from 17.2% for the first nine months of 1998. This increase in
consolidated gross margin was due to increased margins in both the Aluminum
Products and ILS segments offset by a slight decline in gross margins in the
Manufactured Products segment. The increase in Aluminum Products was due to
increased production at General Aluminum thereby allocating fixed manufacturing
overhead over a greater production base and to the acquisition of Metalloy that
has a higher overall gross margin than the existing business. The increase in
margins in the ILS segment is primarily the result of the acquisitions having a
higher gross margin than the existing business.

Selling, general and administrative costs increased by 34% to $56.3 million
for the first nine months of 1999 from $42.1 million for the first nine months
of 1998. The increase was related to the acquisitions consummated subsequent to
September 30, 1998. Consolidated selling, general and administrative expenses as
a percentage of net sales were 10.5% during the current period and 10.2% for the
first nine months of 1998. The increase in rate for 1999 is caused by the
acquisitions having a higher administrative expense relationship to sales than
the existing core operations.

Interest expense increased by $5.0 million from $12.7 million for the
nine-month period ended September 30, 1998 to $17.7 million for the nine-month
period ended September 30, 1999 due to higher average debt outstanding during
the current period offset by lower average interest rates in 1999 versus 1998.
For the nine-month period ended September 30, 1999, the Company averaged
outstanding borrowings of $284.0 million as compared to $196.7 million for the
nine months ended September 30, 1998. The $87.3 million increase related
primarily to acquisitions completed during the latter part of 1998 and the first
nine months of 1999. The average borrowing rate of 8.3% for the nine months
ended September 30, 1999 is 31 basis points lower than the average rate of 8.6%
for the nine months ended September 30, 1998 primarily because of increased
borrowings under the Company's bank revolving credit which carries a lower
effective interest rate.

The effective income tax rate for the nine-month periods ended September
30, 1999 and 1998 was 43%. At December 31, 1998, subsidiaries of the Company had
$1.1 million of net operating loss carryforwards for federal tax purposes.

THIRD QUARTER 1999 VERSUS THIRD QUARTER 1998

Net sales increased by $44.7 million, or 34%, from $133.4 million for the
quarter ended September 30, 1998 to $178.1 million for the three months ended
September 30, 1999. This growth results primarily from acquisitions made
subsequent to September 30, 1998 and relates primarily to the ILS and the
Aluminum Products segments. For ILS, the growth in net sales amounted to $25.1
million of which $20.5 million related to acquisitive growth and the remainder
to internal growth. For Aluminum Products, net sales increased by $20.1 million
of which $18.3 related to the acquisition of Metalloy and the remaining $1.8
million related to internal growth.

Gross profit increased by $7.6 million, or 32%, from $23.9 million for the
quarter ended September 30, 1998 to $31.5 million for the quarter ended
September 30, 1999. This increase was a result of acquisitions made in the last
twelve months increasing gross profit by $10.5 million offsetting a decline in
gross profit from

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the existing businesses of $2.9 million. The decrease in gross profit from the
existing businesses primarily related to ILS and was the result of production
decreases at two agricultural customers, product mix changes and not realizing
certain cost of goods improvements with vendors. All segments experienced
increased margins compared to the year earlier period and were primarily due to
acquisitions made in the preceding twelve months which had higher overall gross
margins than the existing business. However, the Company's consolidated gross
margin decreased slightly to 17.7% for the current period from 17.9% for the
quarter ended September 30, 1998. This decrease in overall gross margins results
from increased sales in the ILS and Aluminum Products segments which have lower
gross margins compared to Manufactured Products.

Selling, general and administrative costs increased by 25% to $18.1 million
for the quarter ended September 30,1999 from $14.5 million for the quarter ended
September 30, 1998. The entire increase was related to acquisitions that have
been consummated subsequent to the third quarter of 1998. Consolidated selling,
general and administrative expenses as a percentage of net sales were 10.2% in
the current period and 10.9% in the corresponding period of the prior year. The
decrease in rates results from cost reduction efforts and efficiencies realized
in the core operations.

Interest expense increased by $2.4 million from $4.2 million for the
quarter ended September 30, 1998 to $6.6 million for the quarter ended September
30, 1999 due to higher average debt outstanding during the current period and
higher average interest rates in 1999 versus 1998. For the quarter ended
September 30, 1999, the Company averaged outstanding borrowings of $308.0
million as compared to $203.9 million outstanding for the quarter ended
September 30, 1998. The $104.1 million increase related to acquisitions
completed during the latter part of 1998 and the first nine months of 1999. The
average borrowing rate of 8.7% for the quarter ended September 30, 1999 is 40
basis points higher than the average rate of 8.3% for the quarter ended
September 30, 1998 primarily because of the $50 million add-on in June 1999, to
the Company's Senior Subordinated Notes which carries a rate of 9.25% versus
6.6% on the bank debt it replaced.

LIQUIDITY AND SOURCES OF CAPITAL

The Company's liquidity needs are primarily for working capital and capital
expenditures. The Company's primary sources of liquidity have been funds
provided by operations and funds available from existing bank credit
arrangements and the sale of Senior Subordinated Notes. On November 1, 1999,
Park-Ohio amended its credit agreement with a group of banks under which it may
borrow up to $175 million on an unsecured basis. The proceeds from the amended
credit agreement, which expires on April 30, 2001, will be used for general
corporate purposes. Amounts borrowed under the new credit agreement may be
borrowed at Park-Ohio's election at either (i) the bank's prime lending rate
less 100 basis points to plus 20 basis points or (ii) LIBOR plus 90-220 basis
points depending on the aggregate amount borrowed under the new credit
agreement. As of October 31, 1999, $125.5 million was outstanding under the
facility.

On June 3, 1999, the Company sold an additional $50 million of its 9.25%
Senior Subordinated Notes due 2007 bringing the amount of Notes outstanding to
$200 million. The Company used the net proceeds from the sale of the Notes
($49.5 million) to repay outstanding bank borrowings.

Current financial resources (working capital and available bank borrowing
arrangements) and anticipated funds from operations are expected to be adequate
to meet current cash requirements. Capital expenditures for 1999 are projected
to be approximately $15 million that will be used to invest in the Company's
current facilities for projected new business, for scheduled improvements and
new equipment to expand existing products.

The ratio of current assets to current liabilities was 2.54 at September
30, 1999 versus 3.19 at December 31, 1998. Working capital increased by $11.6
million, after giving effect to acquisitions made subsequent to December 31,
1998, to $188.5 million at September 30, 1999 from $176.9 million at December
31, 1998.

During the first nine months of 1999, the Company generated $27.9 million
from operations before changes in operating assets and liabilities. After giving
effect to the use of $30.1 million in the operating accounts, the Company used
$2.2 million from operating activities compared to providing $3.9 million for
the

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first nine months of 1998. During the period, the Company invested $13.2 million
in capital expenditures, used $65.2 for acquisitions and used $3.2 million for
other purposes, primarily the purchase of treasury shares. These activities were
funded by issuing $49.5 million of 9.25% Senior Subordinated Notes, a net
increase of $32.2 million in bank borrowings and cash of $2.1 million.

YEAR 2000 CONVERSION

The Year 2000 issue is the result of computer programs being written using
two digits rather than four to define the applicable year. Any of our computer
programs or hardware that have date-sensitive software or embedded chips may
recognize a date using "00" as the year 1900 rather than the year 2000. This
could result in a system failure or miscalculations causing disruption of
operations, including, among other things, a temporary inability to process
transactions, send invoices, or engage in similar normal business activities.

During 1996, we developed a Year 2000 Task Force, which was established to
monitor and track the Year 2000 compliance at our operating units. The Task
Force developed a Year 2000 plan in order to minimize the risk to our operating
units and its customers. The plan to resolve the Year 2000 issues involves four
phases: assessment, remediation, testing and implementation.

To date, the Task Force has completed its assessment of our computer
hardware and software applications, process control equipment, and other
non-information technology equipment. After taking into consideration
investments in new equipment and systems that have already been made, this
assessment has determined that with only a few exceptions, the systems are Year
2000 compliant. The exceptions require upgrades of software programs or changes
to existing programs, which are nearly complete. The remediation and testing
phases are currently underway, and upgrades and software corrections are being
completed. The target for completion of all phases is by the end of November,
1999. We also expect critical contingency plans to be developed by the end of
November, 1999, as well. Based upon the assessments and remediations completed
to date, we do not expect that the Year 2000 issue with respect to our internal
systems will have a material effect on our business operations, consolidated
financial condition, cash flows, or results of operations.

In addition, the Task Force is continuing to review the Year 2000
compliance of our key suppliers, customers and service providers ("significant
third parties") in an effort to reduce the potential adverse effect on our
operations from non-compliance by those parties. Interfaces to external
suppliers and customers are part of this assessment and validation process. As
these significant third parties are reviewed, the Task Force intends to develop
contingency plans, if necessary, for those parties that exhibit possible Year
2000 problems. We have identified the most likely risk of Year 2000
non-compliance as the risk that significant third parties will not be Year 2000
compliant. Due to the general uncertainty inherent in the Year 2000 problem, we
are unable to determine at this time whether the consequence of third party Year
2000 compliance failures will have a material affect on our results of
operations or financial condition. If Year 2000 compliance is not achieved by
these significant third parties, over which we have no control, it could,
depending on duration, have a material adverse effect on our operations.

We are utilizing both internal and external resources to remedy, test, and
implement the software and operating equipment for Year 2000 modifications. The
total cost to achieve Year 2000 compliance is estimated at $9 million.
Approximately 75% of this cost represents new systems, which the Company may
have initiated during the period, notwithstanding the Year 2000 issue. To date,
the Company has incurred approximately $8.8 million for Year 2000 modifications,
with the majority of these costs for the conversion/development of systems. The
remaining $.2 million will be funded through operating cash flows. We generally
do not separately identify the direct costs of internal employees working on
Year 2000 projects.

SEASONALITY; VARIABILITY OF OPERATING RESULTS

As a result of the significant growth in our net sales and operating income
in recent years, seasonal fluctuations have been mitigated. However, the
Company's results of operations are stronger in the first six months rather than
the last six months due to scheduled plant maintenance in the third quarter to
coincide with customer plant shut downs and holidays in the fourth quarter.

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The timing of orders placed by our 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 our business units.
This 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, discussion regarding the
Company's anticipated levels of capital expenditures, financial resources and
the Year 2000 conversion. 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 and quality; raw material availability and pricing; changes in our
relationships with customers and suppliers; our ability to successfully
integrate recent and future acquisitions into existing operations; changes in
general domestic economic conditions such as inflation rates, interest rates and
tax rates; 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 industry; dependence on key management; dependence
on information systems; and our ability, as well as the ability of our vendors
and customers to achieve Year 2000 compliance. 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 September 30, 1999, and for the
nine and three-month periods ended September 30, 1999 and 1998, have been
reviewed, prior to filing, by Ernst & Young LLP, our independent accountants,
and their report is included herein.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK

We are exposed to market risk including changes in interest rates. We are
subject to interest rate risk on our floating rate revolving credit facility
which consisted of borrowings of $125 million at September 30, 1999. A 100 basis
point increase in the interest rate would have resulted in an increase in
interest expense of $.3 million for the three-month period ended September 30,
1999.

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PART II

OTHER INFORMATION

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

There were no matters submitted to a vote of security holders during the
third quarter of 1999.

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

The following exhibits are included herein:

(4) Second Amendment Agreement to the Amended and Restated Credit
Agreement among Park-Ohio Industries, Inc. and various financial
institutions dated November 1, 1999.

(15) Letter re: unaudited financial information

(27) Financial data schedule (Electronic filing only)

We did not file any reports on Form 8-K during the three months ended
September 30, 1999.

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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 HOLDINGS CORP.
------------------------------------
(Registrant)

By /s/ J. S. WALKER
-----------------------------------
Name: J. S. Walker
Title: Vice President and Chief
Financial Officer

Dated November 12, 1999
---------------------------------

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EXHIBIT INDEX

QUARTERLY REPORT ON FORM 10-Q

PARK-OHIO HOLDINGS CORP. AND SUBSIDIARIES
FOR THE QUARTER ENDED SEPTEMBER 30, 1999

EXHIBIT
- -------

(4) Second Amendment Agreement to the Amended and Restated
Credit Agreement among Park-Ohio Industries, Inc. and
various financial institutions dated November 1, 1999.
(15) Letter re: unaudited financial information
(27) Financial data schedule (Electronic filing only)