CLEVELAND, Nov. 3 OH-ParkOhio-3Q-Earns
CLEVELAND, Nov. 3 /PRNewswire-FirstCall/ -- Park-Ohio Holdings Corp.
(Nasdaq: PKOH) today announced results for its third quarter ended September
30, 2008.
THIRD QUARTER RESULTS
Net sales were $266.1 million for third quarter 2008, essentially
unchanged from net sales of $269.1 million for third quarter 2007. ParkOhio
reported a net loss of ($9.1) million or ($.82) per share dilutive for the
third quarter of 2008 compared to net income of $6.2 million or $.53 per share
dilutive in the third quarter of 2007. Net income, as adjusted (a) for the
third quarter of 2008 was $2.7 million or $.24 per share dilutive, compared to
net income of $6.2 million or $.53 per share dilutive for third quarter 2007.
NINE MONTHS RESULTS
Net sales were $819.2 million for the first nine months of 2008,
essentially unchanged from net sales of $823.6 million for the same period of
2007. ParkOhio reported net income of $.1 million or $.01 per share dilutive
for the nine months ended September 30, 2008, compared to net income of $17.3
million or $1.48 per share dilutive in the same period of 2007. Net income,
as adjusted (a) was $11.8 million, or $1.02 per share dilutive for the first
nine months of 2008, versus $17.3 million or $1.48 per share dilutive in the
same period of 2007.
Edward F. Crawford, Chairman and Chief Executive Officer, stated, "We are
concerned about the health and long term viability of the domestic automobile
business. Although the current production atmosphere is affecting the overall
performance of ParkOhio, we believe we are approaching the nadir in the auto
industry.
We are very pleased to have a balanced portfolio of other companies,
representing over 80% of our sales, performing very well, and they have
positioned ParkOhio to respond to the current and future economic
fluctuations."
(a) Reconciliation to GAAP: Quarter endedNine months ended
(in millions)September 30, September 30,
----------------------------
20082007 2008 2007
Net income (loss), as reported $(9.1) $6.2$.1 $17.3
Income taxes (benefit), as reported (4.6)3.8 .8 9.4
------- ------------- -------
Income (loss) before income taxes,
as reported(13.7) 10.0 .926.7
Impairment charges (1) 18.1 0 18.1 0
Income taxes, as adjusted(1.7) (3.8) (7.2) (9.4)
------- ------------- -------
Net income, as adjusted $ 2.7$6.2 $11.8 $ 17.3
======= ============= =======
(1) During the third quarter of 2008, ParkOhio recorded asset impairment
charges associated with the recent volume declines and volatility in
the automotive markets. The charges were composed of $.6 million of
inventory impairment included in Cost of Products Sold and $17.5
million for impairment of property and equipment and other long-term
assets.
(2) The Company presents net income as adjusted to exclude impairment
charges and their related income tax effect to facilitate comparison
between periods.
A conference call reviewing ParkOhio's third quarter results will be
broadcast live over the Internet on Tuesday, November 4, commencing at 10:00
am Eastern Time. Simply log on to http://www.pkoh.com .
ParkOhio 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, including, as a result of the current global financial
crisis; 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 OPERATIONS (UNAUDITED)
PARK-OHIO HOLDINGS CORP. AND SUBSIDIARIES
(In Thousands, Except per Share Data)
Three Months Ended Nine Months Ended
September 30, September 30,
2008 2007 2008 2007
---- ---- ---- ----
Net sales $266,148 $269,104 $819,178 $823,626
Cost of products sold (Note B) 226,759 226,880 697,361 700,413
------- ------- ------- -------
Gross profit 39,38942,224 121,817 123,213
Selling, general and
administrative expenses 28,79924,18782,75574,537
Impairment charges (Note B) 17,480 017,480 0
Gain on sale of assets held for
sale 0 0 0(2,299)
- - --------
Operating income (loss) (6,890) 18,03721,58250,975
Interest expense 6,775 7,99320,67224,286
----- -----------------
Income (loss) before income
taxes (13,665) 10,044 91026,689
Income taxes (benefit) (4,597)3,816 779 9,408
------------ --- -----
Net income (loss)($9,068) $6,228 $131 $17,281
======== ====== ==== =======
Amounts per common share:
Basic ($0.82)$0.56 $0.01 $1.56
Diluted ($0.82)$0.53 $0.01 $1.48
Common shares used in the
computation:
Basic 11,00611,12711,08111,079
Diluted 11,00611,70711,60511,641
Other financial data:
EBITDA, as defined (Note A) $17,618 $23,821 $58,205 $66,178
======= ======= ======= =======
Note A--EBITDA, as defined, reflects earnings before interest, 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 Nine Months Ended
September 30, September 30,
2008 2007 2008 2007
---- ---- ---- ----
Net income (loss) ($9,068) $6,228 $131$17,281
Add back:
Income taxes (benefit) (4,597)3,816 779 9,408
Interest expense 6,775 7,993 20,672 24,286
Depreciation and amortization 5,586 5,254 15,974 15,782
Impairment charges (Note B) 18,059 0 18,059 0
Gain on the sale of assets held
for sale 0 00 (2,299)
Miscellaneous 863 5302,590 1,720
--- -------- -----
EBITDA, as defined $17,618 $23,821 $58,205$66,178
======= ======= ==============
Note B--In the third quarter of 2008, the Company recorded $18.1 million
of impairment charges associated with the recent volume declines and
volatility in the automotive markets ($13.8 million in the Aluminum
Products segment and $4.3 million in the Manufactured Products segment).
Inventory impairment charges of $.6 million were included in Cost of
Products Sold and $17.5 million were included in impairment charges.
CONSOLIDATED CONDENSED BALANCE SHEETS
PARK-OHIO HOLDINGS CORP. AND SUBSIDIARIES
September 30, December 31,
2008 2007
(Unaudited) (Audited)
(In Thousands)
ASSETS
Current Assets
Cash and cash equivalents$28,992 $14,512
Accounts receivable, net 185,697 172,357
Inventories 236,581 215,409
Deferred tax assets 21,89721,897
Unbilled contract revenue 21,01424,817
Other current assets 13,59315,232
------------
Total Current Assets 507,774 464,224
Property, Plant and Equipment 250,679 266,222
Less accumulated depreciation 156,285 160,665
------- -------
Total Property Plant and
Equipment 94,394 105,557
Other Assets
Goodwill100,683 100,997
Net assets held for sale 0 3,330
Other 104,27295,081
-------------
Total Other Assets 204,955 199,408
------- -------
Total Assets $807,123 $769,189
======== ========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities
Trade accounts payable $136,045 $121,875
Accrued expenses 75,04667,007
Current portion of long-term debt 8,063 2,362
Current portion of other
postretirement benefits 2,041 2,041
----- -----
Total Current Liabilities 221,195 193,285
Long-Term Liabilities, less current portion
8.375% Senior Subordinated Notes due 2014 210,000 210,000
Revolving credit maturing on
December 31, 2010160,200 145,400
Other long-term debt2,114 2,287
Deferred tax liability 22,72222,722
Other postretirement benefits and
other long-term liabilities 23,77024,017
------------
Total Long-Term
Liabilities 418,806 404,426
Shareholders' Equity167,122 171,478
------- -------
Total Liabilities and
Shareholders' Equity $807,123 $769,189
======== ========
BUSINESS SEGMENT INFORMATION (UNAUDITED)
PARK-OHIO HOLDINGS CORP. AND SUBSIDIARIES
(In Thousands)
Three Months Ended Nine Months Ended
September 30, September 30,
2008 2007 2008 2007
NET SALES ---- ---- ---- ----
Supply Technologies $131,668 $134,066 $399,452 $403,956
Aluminum Products 35,78441,188 120,304131,838
Manufactured Products 98,69693,850 299,422287,832
--------- --------- --------- ---------
$266,148 $269,104 $819,178 $823,626
========= ========= ========= =========
INCOME (LOSS) BEFORE INCOME TAXES (Note A)
Supply Technologies$5,259$8,288 $16,551$20,420
Aluminum Products (17,557)1,131 (18,674) 3,285
Manufactured Products 10,06211,61937,703 35,292
--------- --------- --------- ---------
(2,236) 21,03835,580 58,997
Corporate and Other Costs (4,654) (3,001) (13,998)(8,022)
Interest Expense (6,775) (7,993) (20,672) (24,286)
--------- --------- --------- ---------
($13,665) $10,044 $910$26,689
========= ========= ========= =========
Note A -- During the third quarter of 2008, the Company recorded $18,059
of impairment charges associated with the recent volume declines and
volatility in the automotive markets. Below is a summary of these charges
by segment.
Cost of
AssetProducts
Impairment Sold Total
---------- ---------------
Aluminum Products$13,189 $579 $13,768
Manufactured Products 4,2910 4,291
---------- ---------------
$17,480 $579 $18,059
========== ===============
SOURCE Park-Ohio Holdings Corp.
