CLEVELAND, July 30 /PRNewswire-FirstCall/ -- Park-Ohio Holdings Corp. (Nasdaq: PKOH), today announced results for its second quarter ended June 30, 2003.
SIX MONTHS RESULTS
Park-Ohio reported net income of $5.1 million or $.47 per share dilutive for the first six months of 2003, compared to loss before cumulative effect of accounting change for the first six months of 2002 of ($.5) million or ($.05) per share dilutive. Adjusted (A) income before cumulative effect of accounting change for the first six months of 2002 was $2.1 million or $.20 per share dilutive. Park-Ohio reported net sales of $314.8 million for the first six months of 2003 compared to net sales of $320.5 million one year earlier.
SECOND QUARTER RESULTS
Park-Ohio reported net income of $2.7 million or $.25 per share dilutive for the second quarter of 2003, compared to net loss for the second quarter of 2002 of ($.5) million or ($.05) per share dilutive. Adjusted (B) net income for the second quarter of 2002 was $1.7 million or $.16 per share dilutive. Park-Ohio reported net sales of $159.9 million for the second quarter of 2003 compared to net sales of $166.6 million one year earlier.
(Note A) Net income for the first six months of 2002, as adjusted, excludes the after-tax impact of restructuring and other unusual charges of $2.6 million.,br>
(Note B) Net income for the second quarter of 2002, as adjusted, excludes the after-tax impact of restructuring and other unusual charges of
$2.2 million.
The company presents adjusted income excluding restructuring and other unusual charges to facilitate comparison between periods.
NEW FINANCING REPLACES PREVIOUS SENIOR CREDIT FACILITY
AND CARRIES IMPROVED TERMS
Additionally, Park-Ohio announced that it has entered into a four year, $165 million senior revolving credit facility. This financing carries improved terms including a lower interest rate, and replaces the Company's previous senior credit facility. Bank One, NA served as the lead arranger of the new credit facility, and KeyBank National Association served as syndication agent. Proceeds of the new facility will be used to repay approximately $110 million outstanding under the previous credit facility and finance working capital.
Edward F. Crawford, Chairman and Chief Executive Officer, stated, "We continue to improve our performance in a flat economy. Our new four-year revolving credit agreement provides more attractive borrowing terms and flexibility to support working capital growth in our core businesses as the economy recovers."
A conference call reviewing Park-Ohio's year-end results will be broadcast live over the Internet on Thursday, July 31, commencing at 10:00 a.m. EDT. Simply log on
to http://www.firstcallevents.com/service/ajwz386682258gf12.html.
Park-Ohio is a leading provider of supply chain logistics services, and a manufacturer of highly engineered products for industrial original equipment manufacturers. Headquartered in Cleveland, Ohio, the Company operates 23 manufacturing sites and 36 supply chain logistics facilities.
This news release contains forward-looking statements 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 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 Six Months
Ended Ended
June 30, June 30,
2003 2002 2003 2002
Net sales $159,916 $166,625 $314,767 $320,468
Cost of products sold 134,069 142,245 264,510 274,390
Gross profit 25,847 24,380 50,257 46,078
Selling, general and
administrative expenses 15,620 14,698 30,699 28,954
Restructuring and other unusual
charges 0 3,635 0 4,256
Operating income 10,227 6,047 19,558 12,868
Interest expense 6,695 6,959 13,452 13,639
Income (loss) before income
taxes and cumulative effect
of accounting change 3,532 (912) 6,106 (771)
Income taxes (credits) 835 (365) 972 (299)
Income (loss) before
cumulative effect of
accounting change 2,697 (547) 5,134 (472)
Cumulative effect of accounting
change 0 0 0 (48,799)
Net income (loss) $2,697 ($547) $5,134 ($49,271)
Amounts per common share:
Basic: Income (loss) before
cumulative effect of
accounting change $0.26 ($0.05) $0.49 ($0.05)
Cumulative effect of
accounting change 0.00 0.00 0.00 (4.68)
Net income (loss) $0.26 ($0.05) $0.49 ($4.73)
Diluted: Income (loss) before
cumulative effect of
accounting change $0.25 ($0.05) $0.47 ($0.05)
Cumulative effect of
accounting change 0.00 0.00 0.00 (4.68)
Net income (loss) $0.25 ($0.05) $0.47 ($4.73)
Common shares used in the
computation
Basic 10,501 10,434 10,499 10,434
Diluted 10,903 10,434 10,878 10,434
Other financial data:
EBITDA, as defined $14,337 $14,324 $27,928 $26,098
Note A -- The Company completed the impairment tests required by Statement
of Financial Standards No. 142 "Goodwill and Other Intangible Assets" and
effective January 1, 2002, recorded a $48.8 million charge reflected as a
cumulative effect of a change in accounting principle.
Note B -- The effective income tax rate for the first six months of 2003
is less than the statutory Federal income tax rate due primarily to the
recognition of net operating loss carryforwards.
Note C -- EBITDA reflects earnings before interest, income taxes, and non-
operating income and expense (Operating Income), and excludes depreciation
and amortization, non-recurring items and certain 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 data prepared in accordance with GAAP
or as a measure of profitability or liquidity. The Company presents EBITDA
because management believes that EBITDA could be useful to investors as an
indication of the Company's ability to incur and service debt 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 (loss) to EBITDA, as defined:
Three Months Six Months
Ended Ended
June 30, June 30,
2003 2002 2003 2002
Net income (loss) $2,697 ($547) $5,134 ($49,271)
Add back:
Cumulative effect of accounting
change 0 0 0 48,799
Income taxes (credits) 835 (365) 972 (299)
Interest expense 6,695 6,959 13,452 13,639
Depreciation and amortization 4,009 4,271 8,212 8,474
Restructuring and other unusual
charges 0 3,635 0 4,256
Miscellaneous 101 371 158 500
EBITDA, as defined $14,337 $14,324 $27,928 $26,098
CONSOLIDATED CONDENSED BALANCE SHEETS
PARK-OHIO HOLDINGS CORP. AND SUBSIDIARIES
June 30 December 31
2003 2002
(Unaudited) (Audited)
(In Thousands)
ASSETS
Current Assets
Cash and cash equivalents $4,909 $8,812
Accounts receivable, net 108,331 101,477
Inventories 159,290 156,067
Other current assets 7,108 8,626
Total Current Assets 279,638 274,982
Property, Plant and Equipment 235,617 227,426
Less accumulated depreciation 124,166 114,302
Total Property Plant and
Equipment 111,451 113,124
Other Assets
Goodwill 82,127 81,464
Net assets held for sale 10,352 19,205
Other 54,233 52,083
Total Other Assets 146,712 152,752
Total Assets $537,801 $540,858
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities
Trade accounts payable $68,499 $74,868
Accrued expenses 49,669 48,907
Current portion of long-term
liabilities 2,694 3,056
Total Current
Liabilities 120,862 126,831
Long-Term Liabilities, less current
portion
9.25% Senior Subordinated Notes due
2007 199,930 199,930
Revolving credit maturing on June
30,2004 109,500 114,000
Other long-term debt 10,148 9,886
Other postretirement benefits 23,332 23,829
Other 3,230 3,483
Total Long-Term
Liabilities 346,140 351,128
Shareholders' Equity 70,799 62,899
Total Liabilities and
Shareholders' Equity $537,801 $540,858
Note A -- Effective June 30, 2003 the Company changed the method of
accounting for the 15% of its inventories utilizing the LIFO method to the
FIFO method. As required by GAAP, the Company has restated its
consolidated balance sheet as of December 31, 2002 to increase inventories
by the recorded LIFO reserve ($4.4 million), increase deferred tax
liabilities ($1.7 million), and increase shareholders' equity
($2.7 million). Previously reported results of operations have not been
restated because the impact of utilizing the LIFO method had an
insignificant impact on the Company's reported amounts for consolidated
net income (loss).
Note B -- The revolving credit was refinanced by the Company on July 30,
2003, maturing July 30, 2007 and is classified as long-term debt.
SOURCE Park-Ohio Holdings Corp.
/CONTACT: Edward F. Crawford of Park-Ohio Holdings Corp.,
+1-216-692-7200/
/First Call Analyst: /
/FCMN Contact:
/Audio: http://www.firstcallevents.com/service/ajwz386682258gf12.html/
(PKOH)
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