Park-Ohio Announces First Quarter 2012 Results

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.



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