Jul. 27, 2010 (PR Newswire) --
CLEVELAND, July 27 /PRNewswire-FirstCall/ -- Park-Ohio Holdings Corp. (Nasdaq: PKOH) today announced results for its second quarter ended June 30, 2010.
SECOND QUARTER RESULTS
Net sales were $198.3 million for second quarter 2010, an increase of 21% from net sales of $163.4 million for second quarter 2009. Net income for the second quarter of 2010 was $3.4 million, or $.29 per share dilutive compared to net income of $3.3 million, or $.29 per share dilutive, for second quarter 2009. Included in the 2009 results were a gain of $3.1 million on the purchase of Park-Ohio Industries, Inc. 8.375% senior subordinated notes due 2014 and a charge of $2.0 million to reserve for an account receivable from a customer in bankruptcy.
SIX MONTHS RESULTS
Net sales were $390.0 million for the first six months of 2010, an increase of 13% from net sales of $344.7 million for the same period of 2009. Net income for the first six months of 2010 was $5.5 million, or $.47 per share, versus net loss of $2.2 million, or $(.20) per share dilutive, in the same period of 2009. Included in the 2009 results were a gain of $3.1 million on the purchase of Park-Ohio Industries, Inc. 8.375% senior subordinated notes due 2014 and a charge of $2.0 million to reserve for an account receivable from a customer in bankruptcy.
A conference call reviewing ParkOhio's second quarter results will be broadcast live over the Internet on Wednesday, July 28, 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 28 manufacturing sites and 40 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.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) | ||||||||
PARK-OHIO HOLDINGS CORP. AND SUBSIDIARIES | ||||||||
(In Thousands, Except per Share Data) | ||||||||
Three Months Ended | Six Months Ended | |||||||
June 30, | June 30, | |||||||
2010 | 2009 | 2010 | 2009 | |||||
Net sales | $198,303 | $163,405 | $390,004 | $344,655 | ||||
Cost of products sold | 165,005 | 134,077 | 327,368 | 291,464 | ||||
Gross profit | 33,298 | 29,328 | 62,636 | 53,191 | ||||
Selling, general and administrative expenses | 22,337 | 22,214 | 43,305 | 44,836 | ||||
Operating income | 10,961 | 7,114 | 19,331 | 8,355 | ||||
Gain on purchase of 8.375% senior subordinated notes | 0 | (3,096) | 0 | (3,096) | ||||
Interest expense | 6,167 | 6,128 | 11,603 | 12,099 | ||||
Income before income taxes | 4,794 | 4,082 | 7,728 | (648) | ||||
Income taxes | 1,379 | 810 | 2,247 | 1,542 | ||||
Net income | $3,415 | $3,272 | $5,481 | ($2,190) | ||||
Amounts per common share: | ||||||||
Basic | $0.30 | $0.30 | $0.49 | ($0.20) | ||||
Diluted | $0.29 | $0.29 | $0.47 | ($0.20) | ||||
Common shares used in the computation: | ||||||||
Basic | 11,475 | 11,008 | 11,229 | 10,890 | ||||
Diluted | 11,956 | 11,282 | 11,747 | 10,890 | ||||
Other financial data: | ||||||||
EBITDA, as defined | $15,777 | $17,558 | $28,827 | $25,284 | ||||
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 | Six Months Ended | |||||||
June 30, | June 30, | |||||||
2010 | 2009 | 2010 | 2009 | |||||
Net income | $3,415 | $3,272 | $5,481 | ($2,190) | ||||
Add back: | ||||||||
Income taxes | 1,379 | 810 | 2,247 | 1,542 | ||||
Interest expense | 6,167 | 6,128 | 11,603 | 12,099 | ||||
Reserve for customer in bankruptcy | 0 | 2,015 | 0 | 2,015 | ||||
Depreciation and amortization | 4,265 | 4,396 | 8,433 | 9,589 | ||||
Miscellaneous | 551 | 937 | 1,063 | 2,229 | ||||
EBITDA, as defined | $15,777 | $17,558 | $28,827 | $25,284 | ||||
Note B--In the second quarter of 2009, the Company recorded a gain of $3.1 million on the purchase of $6.125 million of Park-Ohio Industries, Inc. 8.375% senior subordinated notes due 2014. | ||||||||
Note C--In the second quarter of 2009, the Company recorded a charge of $2.0 million to reserve for an account receivable from a customer in bankruptcy. | ||||||||
CONDENSED CONSOLIDATED BALANCE SHEETS | ||||||
PARK-OHIO HOLDINGS CORP. AND SUBSIDIARIES | ||||||
June 30, | December 31, | |||||
2010 | 2009 | |||||
(Unaudited) | (Audited) | |||||
(In Thousands) | ||||||
ASSETS | ||||||
Current Assets | ||||||
Cash and cash equivalents | $27,866 | $23,098 | ||||
Accounts receivable, net | 119,878 | 104,643 | ||||
Inventories | 169,115 | 182,116 | ||||
Deferred tax assets | 8,104 | 8,104 | ||||
Unbilled contract revenue | 15,263 | 19,411 | ||||
Other current assets | 10,171 | 12,700 | ||||
Total Current Assets | 350,397 | 350,072 | ||||
Property, Plant and Equipment | 246,763 | 245,240 | ||||
Less accumulated depreciation | 176,534 | 168,609 | ||||
Total Property Plant and Equipment | 70,229 | 76,631 | ||||
Other Assets | ||||||
Goodwill | 3,738 | 4,155 | ||||
Other | 79,657 | 71,410 | ||||
Total Other Assets | 83,395 | 75,565 | ||||
Total Assets | $504,021 | $502,268 | ||||
LIABILITIES AND SHAREHOLDERS' EQUITY | ||||||
Current Liabilities | ||||||
Trade accounts payable | $83,692 | $75,083 | ||||
Accrued expenses | 46,895 | 39,150 | ||||
Current portion of long-term debt | 11,882 | 10,894 | ||||
Current portion of other postretirement benefits | 2,197 | 2,197 | ||||
Total Current Liabilities | 144,666 | 127,324 | ||||
Long-Term Liabilities, less current portion | ||||||
8.375% Senior Subordinated Notes due 2014 | 183,835 | 183,835 | ||||
Revolving credit maturing on June 30, 2013 | 117,300 | 134,600 | ||||
Other long-term debt | 4,562 | 4,668 | ||||
Deferred tax liability | 7,200 | 7,200 | ||||
Other postretirement benefits and other long-term liabilities | 23,562 | 21,831 | ||||
Total Long-Term Liabilities | 336,459 | 352,134 | ||||
Shareholders' Equity | 22,896 | 22,810 | ||||
Total Liabilities and Shareholders' Equity | $504,021 | $502,268 | ||||
BUSINESS SEGMENT INFORMATION (UNAUDITED) | |||||||||
PARK-OHIO HOLDINGS CORP. AND SUBSIDIARIES | |||||||||
(In Thousands) | |||||||||
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||
2010 | 2009 | 2010 | 2009 | ||||||
NET SALES | |||||||||
Supply Technologies | $97,185 | $77,444 | $191,423 | $160,415 | |||||
Aluminum Products | 37,572 | 21,635 | 74,160 | 43,993 | |||||
Manufactured Products | 63,546 | 64,326 | 124,421 | 140,247 | |||||
$198,303 | $163,405 | $390,004 | $344,655 | ||||||
INCOME (LOSS) BEFORE INCOME TAXES | |||||||||
Supply Technologies | $5,311 | $2,885 | $9,795 | $3,431 | |||||
Aluminum Products | 2,299 | (1,794) | 4,235 | (5,456) | |||||
Manufactured Products | 7,597 | 9,373 | 12,529 | 17,085 | |||||
15,207 | 10,464 | 26,559 | 15,060 | ||||||
Corporate and Other Costs | (4,246) | (254) | (7,228) | (3,609) | |||||
Interest Expense | (6,167) | (6,128) | (11,603) | (12,099) | |||||
$4,794 | $4,082 | $7,728 | ($648) | ||||||
SOURCE Park-Ohio Holdings Corp.
