Park-Ohio Reports Increased Revenue and Income in First Quarter 2007

CLEVELAND, May 8 /PRNewswire-FirstCall/ -- Park-Ohio Holdings Corp. today announced results for its first quarter ended March 31, 2007.

Park-Ohio reported net sales of $267.9 million for first quarter 2007, a 3% increase on sales of $260.2 million for first quarter 2006. Park-Ohio reported net income of $5.2 million, or $.45 per share dilutive, for first quarter 2007, an 8% increase on net income of $4.8 million, or $.42 per share dilutive, for first quarter 2006.

Edward F. Crawford, Chairman and Chief Executive Officer, stated, "We are pleased with our continued trend of global growth in revenue and profitability. Our same-quarter sales have grown for 14 straight quarters. Compared to four years earlier we have generated compound growth rates of 15% for sales and 21% for net income. We continue to be well positioned to achieve our previous guidance of 10% sales growth and 25% earnings growth this year, producing EBIT of $72 to $78 million and dilutive earnings per share of $2.10 to $2.35 in 2007."

A conference call reviewing Park-Ohio's first quarter results will be broadcast live over the Internet on Wednesday, May 9, commencing at 10:00 am Eastern Time. Simply log on to http://www.pkoh.com/.

Park-Ohio is a leading provider of supply chain logistics services and a manufacturer of highly engineered products. Headquartered in Cleveland, Ohio, the Company operates 24 manufacturing sites and 55 supply chain logistics facilities.

This news release contains forward-looking statements, including statements regarding future performance of the company, that are subject to certain risks, uncertainties and assumptions. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those anticipated, estimated or projected.

Among the key factors that could cause actual results to differ materially from expectations are: the cyclical nature of the vehicular industry; timing of cost reductions; labor availability and stability; changes in economic and industry conditions; adverse impacts to the Company, its suppliers and customers from acts of terrorism or hostilities; the financial condition of the Company's customers and suppliers, including the impact of any bankruptcies; the Company's ability to successfully integrate the operations of acquired companies; the uncertainties of environmental, litigation or corporate contingencies; and changes in regulatory requirements. These and other risks and assumptions are described in the Company's reports that are available from the United States Securities and Exchange Commission. The Company assumes no obligation to update the information in this release.

CONSOLIDATED CONDENSED STATEMENTS OF INCOME (UNAUDITED) PARK-OHIO HOLDINGS CORP. AND SUBSIDIARIES (In Thousands, Except per Share Data) Three Months Ended March 31, 2007 2006 ---- ---- Net sales $267,886 $260,221 Cost of products sold 229,277 223,334 ------- ------- Gross profit 38,609 36,887 Selling, general and administrative expenses 25,490 21,719 Gain on sale of assets held for sale (2,299) 0 ------- ------- Operating income 15,418 15,168 Interest expense 8,007 7,370 Income before income taxes 7,411 7,798 Income taxes 2,206 3,041 ----- ----- Net Income $5,205 $4,757 ====== ====== Amounts per common share: Basic $0.47 $0.43 Diluted $0.45 $0.42 Common shares used in the computation Basic 11,049 10,970 Diluted 11,553 11,438 Other financial data: EBITDA, as defined $18,971 $20,214 ======= ======= Note A -- EBITDA, as defined, reflects earnings before interest and income taxes, and excludes depreciation, amortization, certain non-cash charges and corporate-level expenses as defined in the Company's revolving credit agreement. EBITDA is not a measure of performance under generally accepted accounting principles ("GAAP") and should not be considered in isolation or as a substitute for net income, cash flows from operating, investing and financing activities and other income or cash flow statement data prepared in accordance with GAAP or as a measure of profitability or liquidity. The Company presents EBITDA because management believes that EBITDA is useful to investors as an indication of the Company's satisfaction of its Debt Service Ratio covenant in its revolving credit agreement and because EBITDA is a measure used under the Company's revolving credit facility to determine whether the Company may incur additional debt under such facility. EBITDA as defined herein may not be comparable to other similarly titled measures of other companies. The following table reconciles net income to EBITDA, as defined: Three Months Ended March 31, 2007 2006 ---- ---- Net income $5,205 $4,757 Add back: Income taxes 2,206 3,041 Interest expense 8,007 7,370 Depreciation and amortization 5,247 4,780 Gain on sale of assets held for sale (2,299) 0 Miscellaneous 605 266 --- --- EBITDA, as defined $18,971 $20,214 ======= ======= CONSOLIDATED CONDENSED BALANCE SHEETS PARK-OHIO HOLDINGS CORP. AND SUBSIDIARIES March 31, December 31, 2007 2006 (Unaudited) (Audited) --------- ------- (In Thousands) ASSETS Current Assets Cash and cash equivalents $24,831 $21,637 Accounts receivable, net 195,934 181,893 Inventories 220,880 223,936 Deferred tax assets 34,142 34,142 Other current assets 24,149 24,218 ------ ------ Total Current Assets 499,936 485,826 Property, Plant and Equipment 256,844 251,565 Less accumulated depreciation 151,442 146,980 ------- ------- Total Property Plant and Equipment 105,402 104,585 Other Assets Goodwill 98,246 98,180 Net assets held for sale 4,331 6,959 Other 89,618 88,592 ------ ------ Total Other Assets 192,195 193,731 ------- ------- Total Assets $797,533 $784,142 ======== ======== LIABILITIES AND SHAREHOLDERS' EQUITY Current Liabilities Trade accounts payable $112,739 $132,864 Accrued expenses 84,832 78,655 Current portion of long-term liabilities 8,283 5,873 ----- ----- Total Current Liabilities 205,854 217,392 Long-Term Liabilities, less current portion 8.375% Senior Subordinated Notes due 2014 210,000 210,000 Revolving credit maturing on December 31, 2010 171,800 156,700 Other long-term debt 4,544 4,790 Deferred tax liability 32,089 32,089 Other postretirement benefits and other long-term liabilities 28,734 24,434 ------ ------ Total Long-Term Liabilities 447,167 428,013 Shareholders' Equity 144,512 138,737 ------- ------- Total Liabilities and Shareholders' Equity $797,533 $784,142 ======== ======== BUSINESS SEGMENT INFORMATION (UNAUDITED) PARK-OHIO HOLDINGS CORP. AND SUBSIDIARIES (In Thousands) Three Months Ended March 31, 2007 2006 ---- ---- NET SALES ILS $138,757 $150,159 Aluminum Products 42,087 42,702 Manufactured Products 87,042 67,360 ------ ------ $267,886 $260,221 ======== ======== INCOME BEFORE INCOME TAXES ILS $6,584 $10,422 Aluminum Products 750 2,040 Manufactured Products 9,509 5,662 ----- ----- 16,843 18,124 Corporate and Other Costs (1,425) (2,956) Interest Expense (8,007) (7,370) ------- ------- $7,411 $7,798 ====== ======