Park-Ohio Announces First Quarter 2012 Results

May 07, 2012, 16:40 ET from Park-Ohio Holdings Corp.

CLEVELAND, May 7, 2012 /PRNewswire/ -- Park-Ohio Holdings Corp. (NASDAQ: PKOH) today reported net sales of $263.1 million for first quarter 2012, an increase of $21.5 million or 9% from net sales of $241.6 million for first quarter 2011. ParkOhio reported income before income taxes of $13.4 million for first quarter 2012, an increase of 29% on income before income taxes of $10.4 million for first quarter 2011. ParkOhio recorded income tax expense of $4.4 million for first quarter 2012, an effective income tax rate of 33%, compared to $1.7 million, or an effective tax rate of 15% for first quarter 2011.  ParkOhio reported net income of $9.0 million, or $.74 per share dilutive, for first quarter 2012, which included the impact of federal income tax expense. This compared to net income of $8.7 million, or $.73 per share dilutive, for first quarter 2011 which benefited from the absence of federal income tax expense.

 

 

ParkOhio would have reported net income fully taxed of $7.0 million or $.58 per share dilutive for the first quarter of 2011 if federal taxes had been recorded as reflected in the table below.

 

Quarter Ended March 31,

2012

2011

Dilutive EPS, GAAP, as reported

$ .74

$ .73

Dilutive EPS, as adjusted with 33% income tax

.74

.58

Reconciliation to GAAP: (in millions, except EPS)

   Income before income taxes, GAAP, as reported

$13.4

$10.4

   Income taxes at 33% (GAAP for 2012, adjusted for 2011)

   Net Income (GAAP for 2012 using 33% effective tax rate, adjusted for 2011)

$ 9.0

$ 7.0

Number of Dilutive Shares

12.0

12.0

Dilutive EPS  (GAAP for 2012, adjusted for 2011)

.74

.58

The Company presents fully-taxed net income and EPS to facilitate comparison between periods because the Company began recording a provision for income taxes in 2012.

 

"The economy has created an excellent opportunity for our style of management and the results indicate the possibilities for the future," stated Edward F. Crawford, Chairman and Chief Executive Officer.

A conference call reviewing ParkOhio's first quarter results will be broadcast live over the Internet on Tuesday, May 8, commencing at 10:00 am Eastern Time.  Simply log on to http://www.pkoh.com.         

ParkOhio is a leading provider of supply management services and a manufacturer of highly-engineered products.  Headquartered in Cleveland, Ohio, the Company operates 31 manufacturing sites and 44 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,

2012

2011

Net sales

$263,056

$241,628

Cost of products sold

214,177

199,693

    Gross profit

48,879

41,935

Selling, general and administrative expenses

28,745

25,665

    Operating income

20,134

16,270

Interest expense

6,735

5,863

    Income before income taxes

13,399

10,407

Income taxes

4,443

1,678

    Net Income

$8,956

$8,729

Amounts per common share:

    Basic

$0.76

$0.76

    Diluted

$0.74

$0.73

Common shares used in the computation:

    Basic

11,787

11,460

    Diluted

12,041

11,987

Other financial data:

    EBITDA, as defined

$23,597

$20,668

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,

2012

2011

Net income

$8,956

$8,729

Add back:

    Income taxes

4,443

1,678

    Interest expense

6,735

5,863

    Depreciation and amortization

3,496

3,955

    Miscellaneous

(33)

443

EBITDA, as defined

$23,597

$20,668

Note B--On March 23, 2012, the Company completed the acquisition of Fluid Routing Solutions Holding Corp. ("FRS"), a leading manufacturer of

industrial hose products and fuel filler and hydraulic fluid assemblies, in an all cash transaction for approximately $97.5 million. The Company

funded the acquisition with cash of $40 million, a $25 million amortizing term loan and $32.5 million of borrowings under the Company's revolving

credit agreement. The Company included the results of operations of FRS from the date of acquisition through March 31, 2012 in its Aluminum Products reporting

segment.

  

CONSOLIDATED CONDENSED BALANCE SHEETS

PARK-OHIO HOLDINGS CORP. AND SUBSIDIARIES

March 31,

December 31,

2012

2011

(Unaudited)

(Audited)

(In Thousands)

ASSETS

Current Assets

Cash and cash equivalents

$44,588

$78,001

Accounts receivable, net

191,062

139,941

Inventories

222,643

202,039

Deferred tax assets

22,544

20,561

Unbilled contract revenue

15,102

18,778

Other current assets

12,572

8,790

Total Current Assets

508,511

468,110

Property, Plant and Equipment

284,387

259,975

Less accumulated depreciation

201,377

198,165

Total Property Plant and Equipment

83,010

61,810

Other Assets

Goodwill and other intangible assets

104,282

20,187

Other

64,578

63,833

Total Other Assets

168,860

84,020

Total Assets

$760,381

$613,940

LIABILITIES AND SHAREHOLDERS' EQUITY

Current Liabilities

Trade accounts payable

$134,774

$99,588

Accrued expenses

102,308

$73,651

Current portion of long-term debt

4,730

$1,415

Current portion of other postretirement benefits

2,002

2,002

Total Current Liabilities

243,814

176,656

Long-Term Liabilities, less current portion

Senior Notes

250,000

250,000

Credit facility

138,029

93,000

Other long-term debt

3,051

3,165

Deferred tax liability

24,321

1,392

Other postretirement benefits and other long-term liabilities

25,159

24,285

Total Long-Term Liabilities

440,560

371,842

Shareholders' Equity

76,007

65,442

Total Liabilities and Shareholders' Equity

$760,381

$613,940

 

BUSINESS SEGMENT INFORMATION (UNAUDITED)

PARK-OHIO HOLDINGS CORP. AND SUBSIDIARIES

(In Thousands)

Three Months Ended

March 31,

2012

2011

NET SALES

Supply Technologies

$134,351

$123,226

Aluminum Products

36,165

39,041

Manufactured Products

92,540

79,361

$263,056

$241,628

INCOME (LOSS) BEFORE INCOME TAXES

Supply Technologies

$10,077

$8,633

Aluminum Products

1,059

3,314

Manufactured Products

14,090

8,546

25,226

20,493

Corporate and Other Costs

(5,092)

(4,223)

Interest Expense

(6,735)

(5,863)

$13,399

$10,407

SOURCE Park-Ohio Holdings Corp.



RELATED LINKS

http://www.pkoh.com