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8-K - FORM 8-K - PARK OHIO HOLDINGS CORP | l41085ae8vk.htm |
EXHIBIT 99.1
FOR IMMEDIATE RELEASE
|
CONTACT: | EDWARD F. CRAWFORD | ||
PARK-OHIO HOLDINGS CORP. | ||||
(440) 947-2000 |
ParkOhio Announces Third Quarter Results
CLEVELAND, OHIO, November 8, 2010 Park-Ohio Holdings Corp. (NASDAQ:PKOH) today
announced results for its third quarter ended September 30, 2010.
THIRD QUARTER RESULTS
Net sales were $203.0 million for third quarter 2010, an increase of 20% from net sales of
$168.6 million for third quarter 2009. Net income for the third quarter of 2010 was $6.2 million,
or $.52 per share dilutive compared to a net loss of $3.2 million, or $(.29) per share dilutive,
for third quarter 2009. Included in the 2010 results were gains of $2.2 million representing the
excess of the aggregate fair value of purchased net assets over the purchase price for the Assembly
Component System (ACS) business unit acquisition that was completed during the quarter and a $3.5
million asset impairment charge related to the write down of an investment. Included in the 2009
results were a gain on the purchase of Park-Ohio Industries, Inc. 8.375% senior subordinated notes
due 2014 of $2.0 million and a charge to reserve for an account receivable from a customer in
bankruptcy of $2.1 million.
NINE MONTHS RESULTS
Net sales were $593.0 million for the first nine months of 2010, an increase of 16% from net
sales of $513.3 million for the same period of 2009. Net income was $11.7 million, or $.99 per
share dilutive, versus net loss of $5.4 million, or $(.50) per share dilutive, in the same period
of 2009. Included in the 2010 results were gains of $2.2 million representing the excess of the
aggregate fair value of purchased net assets over the purchase price for the ACS business unit
acquisition and a $3.5 million asset impairment charge related to the write down of an investment.
Included in the 2009 results were a gain on the purchase of Park-Ohio Industries, Inc. 8.375%
senior subordinated notes due 2014 of $5.1 million and a charge to reserve for an account
receivable from a customer in bankruptcy of $4.2 million.
Edward F. Crawford, Chairman and Chief Executive Officer, stated, The last 90 days at
ParkOhio have been very active in new order bookings. The Supply
Technologies acquisition of ACS will add in excess of $50 million
in additional synergistic revenue in 2011.
The
new order activity in our Manufactured Products segment for global new
equipment has increased by approximately 50% year-to date and after
market activity continues to rebound.
Lastly, General Aluminum has been awarded two major blocks of business.
One with ZF Lenksysteme to produce and machine aluminum racks for
their electronic steering systems and the other with Chrysler for a
new platform of knuckles and control arms. This business will
commence in 2012 and total revenues are expected to exceed $40
million per year."
- more -
A conference call reviewing ParkOhios third quarter results will be broadcast live over
the Internet on Tuesday, November 9, 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 29 manufacturing sites
and 52 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
Companys customers and suppliers, including the impact of any bankruptcies; the Companys 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 Companys
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)
PARK-OHIO HOLDINGS CORP. AND SUBSIDIARIES
(In Thousands, Except per Share Data)
Three Months Ended | Nine Months Ended | |||||||||||||||
September 30, | September 30, | |||||||||||||||
2010 | 2009 | 2010 | 2009 | |||||||||||||
Net sales |
$ | 202,986 | $ | 168,597 | $ | 592,990 | $ | 513,252 | ||||||||
Cost of products sold |
168,006 | 145,938 | 495,374 | 437,402 | ||||||||||||
Gross profit |
34,980 | 22,659 | 97,616 | 75,850 | ||||||||||||
Selling, general and administrative
expenses |
22,150 | 21,701 | 65,455 | 66,537 | ||||||||||||
Operating income |
12,830 | 958 | 32,161 | 9,313 | ||||||||||||
Asset impairment charge |
3,539 | 0 | 3,539 | 0 | ||||||||||||
Gain on purchase of 8.375% senior
subordinated notes |
0 | (2,011 | ) | 0 | (5,107 | ) | ||||||||||
Gain on acquisition of business |
(2,210 | ) | 0 | (2,210 | ) | 0 | ||||||||||
Interest expense |
6,469 | 5,897 | 18,072 | 17,996 | ||||||||||||
Income (loss) before income taxes |
5,032 | (2,928 | ) | 12,760 | (3,576 | ) | ||||||||||
Income taxes |
(1,152 | ) | 296 | 1,095 | 1,838 | |||||||||||
Net income (loss) |
$ | 6,184 | ($3,224 | ) | $ | 11,665 | ($5,414 | ) | ||||||||
Amounts per common share: |
||||||||||||||||
Basic |
$ | 0.54 | ($0.29 | ) | $ | 1.03 | ($0.50 | ) | ||||||||
Diluted |
$ | 0.52 | ($0.29 | ) | $ | 0.99 | ($0.50 | ) | ||||||||
Common shares used in the computation: |
||||||||||||||||
Basic |
11,386 | 11,011 | 11,282 | 10,931 | ||||||||||||
Diluted |
11,824 | 11,011 | 11,773 | 10,931 | ||||||||||||
Other financial data: |
||||||||||||||||
EBITDA, as defined |
$ | 20,482 | $ | 10,459 | $ | 49,309 | $ | 35,742 | ||||||||
Note AEBITDA, as defined, reflects earnings before interest, income taxes, and excludes
depreciation, amortization, certain non-cash
charges and corporate-level expenses as defined in the Companys 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 Companys satisfaction of its Debt Service
Ratio covenant in its revolving credit agreement
and because EBITDA is a measure used under the Companys 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 | Nine Months Ended | |||||||||||||||
September 30, | September 30, | |||||||||||||||
2010 | 2009 | 2010 | 2009 | |||||||||||||
Net income (loss) |
$ | 6,184 | ($3,224 | ) | $ | 11,665 | ($5,414 | ) | ||||||||
Add back: |
||||||||||||||||
Income taxes |
(1,152 | ) | 296 | 1,095 | 1,838 | |||||||||||
Deferred tax impact netted in acquisition gain |
1,354 | 0 | 1,354 | 0 | ||||||||||||
Interest expense |
6,469 | 5,897 | 18,072 | 17,996 | ||||||||||||
Depreciation and amortization |
3,666 | 4,426 | 12,099 | 14,015 | ||||||||||||
Asset impairment charge |
3,539 | 0 | 3,539 | 0 | ||||||||||||
Reserve for customer in
bankruptcy |
0 | 2,139 | 0 | 4,154 | ||||||||||||
Miscellaneous |
422 | 925 | 1,485 | 3,153 | ||||||||||||
EBITDA, as defined |
$ | 20,482 | $ | 10,459 | $ | 49,309 | $ | 35,742 | ||||||||
Note BIn the first nine months of 2009, the Company recorded a gain of
$5.1million on the purchase of $6.125 million principal amount of Park-Ohio
Industries, Inc. 8.375% senior subordinated notes due 2014, of
which $2.0 million was recorded in the third quarter.
Note CIn the first nine months of 2009 the Company recorded a charge of $4.2
million to reserve for an account receivable from a customer in
bankruptcy.
Note DIn the third quarter of 2010 the Company recorded a bargain purchase gain of $2.2
million from the acquisition of certain assets and assumption
of specific liabilities of Assembly Component Systems Inc. representing the
excess of the aggregate fair value of purchased net assets over the
purchase price and a $3.5 million asset
impairment charge relating to the write down of
an investment.
CONSOLIDATED CONDENSED BALANCE SHEETS
PARK-OHIO HOLDINGS CORP. AND SUBSIDIARIES
PARK-OHIO HOLDINGS CORP. AND SUBSIDIARIES
September 30, | December 31, | |||||||
2010 | 2009 | |||||||
(Unaudited) | (Audited) | |||||||
(In Thousands) | ||||||||
ASSETS |
||||||||
Current Assets |
||||||||
Cash and cash equivalents |
$ | 35,749 | $ | 23,098 | ||||
Accounts receivable, net |
137,024 | 104,643 | ||||||
Inventories |
193,021 | 182,116 | ||||||
Deferred tax assets |
8,104 | 8,104 | ||||||
Unbilled contract revenue |
10,209 | 19,411 | ||||||
Other current assets |
8,332 | 12,700 | ||||||
Total Current Assets |
392,439 | 350,072 | ||||||
Property, Plant and Equipment |
255,866 | 245,240 | ||||||
Less accumulated depreciation |
184,013 | 168,609 | ||||||
Total Property Plant and Equipment |
71,853 | 76,631 | ||||||
Other Assets |
||||||||
Goodwill |
8,586 | 4,155 | ||||||
Other |
75,071 | 71,410 | ||||||
Total Other Assets |
83,657 | 75,565 | ||||||
Total Assets |
$ | 547,949 | $ | 502,268 | ||||
LIABILITIES AND SHAREHOLDERS EQUITY |
||||||||
Current Liabilities |
||||||||
Trade accounts payable |
$ | 97,476 | $ | 75,083 | ||||
Accrued expenses |
61,865 | 39,150 | ||||||
Current portion of long-term debt |
12,115 | 10,894 | ||||||
Current portion of other
postretirement benefits |
2,197 | 2,197 | ||||||
Total Current Liabilities |
173,653 | 127,324 | ||||||
Long-Term Liabilities, less current
portion |
||||||||
8.375% Senior Subordinated Notes due
2014 |
183,835 | 183,835 | ||||||
Revolving credit and term debt
maturing on April 30, 2014 |
121,000 | 134,600 | ||||||
Other long-term debt |
5,407 | 4,668 | ||||||
Deferred tax liability |
7,200 | 7,200 | ||||||
Other postretirement benefits and
other long-term liabilities |
21,993 | 21,831 | ||||||
Total Long-Term Liabilities |
339,435 | 352,134 | ||||||
Shareholders Equity |
34,861 | 22,810 | ||||||
Total Liabilities and Shareholders
Equity |
$ | 547,949 | $ | 502,268 | ||||
BUSINESS SEGMENT INFORMATION (UNAUDITED)
PARK-OHIO HOLDINGS CORP. AND SUBSIDIARIES
(In Thousands)
PARK-OHIO HOLDINGS CORP. AND SUBSIDIARIES
(In Thousands)
Three Months Ended | Nine Months Ended | |||||||||||||||
September 30, | September 30, | |||||||||||||||
2010 | 2009 | 2010 | 2009 | |||||||||||||
NET SALES |
||||||||||||||||
Supply Technologies |
$ | 103,885 | $ | 82,464 | $ | 295,308 | $ | 242,879 | ||||||||
Aluminum Products |
35,554 | 31,663 | 109,714 | 75,656 | ||||||||||||
Manufactured Products |
63,547 | 54,470 | 187,968 | 194,717 | ||||||||||||
$ | 202,986 | $ | 168,597 | $ | 592,990 | $ | 513,252 | |||||||||
INCOME (LOSS) BEFORE INCOME TAXES |
||||||||||||||||
Supply Technologies |
$ | 6,428 | $ | 2,078 | $ | 16,223 | $ | 5,509 | ||||||||
Aluminum Products |
1,913 | (1,337 | ) | 6,148 | (6,793 | ) | ||||||||||
Manufactured Products |
8,258 | 3,413 | 20,787 | 20,498 | ||||||||||||
16,599 | 4,154 | 43,158 | 19,214 | |||||||||||||
Corporate expenses |
(3,769 | ) | (3,196 | ) | (10,997 | ) | (9,901 | ) | ||||||||
Gain on purchase of 8.375% senior
subordinated notes |
0 | 2,011 | 0 | 5,107 | ||||||||||||
Gain on acquisition of business |
2,210 | 0 | 2,210 | 0 | ||||||||||||
Asset impairment charge |
(3,539 | ) | 0 | (3,539 | ) | 0 | ||||||||||
Interest Expense |
(6,469 | ) | (5,897 | ) | (18,072 | ) | (17,996 | ) | ||||||||
$ | 5,032 | ($2,928 | ) | $ | 12,760 | ($3,576 | ) | |||||||||