CLEVELAND, March 9 /PRNewswire-FirstCall/ -- Park-Ohio Holdings Corp. (Nasdaq: PKOH), today announced results for its fourth quarter and year ended December 31, 2003.
FULL YEAR RESULTS
Park-Ohio reported net sales of $624.3 million for 2003, compared to sales of $634.5 million in 2002. Park-Ohio reported net income, as adjusted(A) of $7.6 million or $.70 per share dilutive for 2003, compared to net income, as adjusted(A) of $6.8 million or $.63 per share dilutive in 2002. Including all unusual charges, Park-Ohio reported a net loss of ($11.8) million or ($1.13) per share for 2003, compared to a loss before cumulative effect of accounting change of ($12.4) million or ($1.18) per share in 2002.
FOURTH QUARTER RESULTS
Park-Ohio reported net sales of $162.7 million for 2003, compared to sales of $156.2 million in the fourth quarter of 2002. Park-Ohio reported net income, as adjusted(A) of $2.4 million or $.22 per share dilutive for the fourth quarter of 2003, compared to net income, as adjusted(A) of $2.3 million or $.21 per share dilutive in the same period of 2002. Including all unusual charges, Park-Ohio reported a net loss of ($17.0) million or ($1.62) per share for the fourth quarter of 2003, compared to a fourth quarter net loss of ($11.6) million or ($1.12) per share in 2002.
Edward F. Crawford, Chairman and Chief Executive Officer, stated, "We are pleased with the performance of our core units, particularly ILS, Aluminum Products, and Induction Equipment. Our initiative to reduce bank debt produced a further reduction in 2003 of 11% ($114.0 million down to $101.0 million). The writeoff of some of the Forge Group assets completes our multi-year efforts to position the company for renewed, more profitable growth. This Forge Group restructuring will improve both earnings and cash generation by approximately $15.0 million over five years. In 2004, we expect to generate 8-10% sales growth and an EPS of $1.00 to $1.10."
(Note A) Reconciliation to GAAP:
Year ended Quarter ended
December 31, December 31,
2003 2002 2003 2002
Loss before cumulative
effect of accounting change,
as reported ($11.8) ($12.4) ($17.0) ($11.6)
Restructuring and Asset
Impairment(1)(2) 19.4 19.2 19.4 13.9
Net Income, as adjusted $7.6 $6.8 $2.4 $2.3
(1) In 2003 and 2002, respectively, $0.6 million and $5.6 million were
included in Cost of Products Sold. The remainder is reflected in
Restructuring and Impairment Charges.
(2) The Company presents adjusted net income excluding restructuring and
impairment charges to facilitate comparison between periods. The vast
majority of the non-cash charges recorded in 2003 relate to the
restructuring of the Company's Forge Group. This restructuring will
increase both profitability and cash flow by approximately $15.0
million over five years. Charges outside the Forge Group consist
primarily of additional non-cash pension withdrawal charges for
manufacturing units executing previously announced restructuring.
A conference call reviewing Park-Ohio's full-year and fourth quarter results will be broadcast live over the Internet on Wednesday, March 10, commencing at 10:00 am EST. Simply log on
to http://www.firstcallevents.com/service/ajwz401856625gf12.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 21 manufacturing sites and 32 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 Ended Year Ended
December 31, December 31,
2003 2002 2003 2002
Net sales $162,699 $156,155 $624,295 $634,455
Cost of products sold 137,999 137,828 527,586 546,857
Gross profit 24,700 18,327 96,709 87,598
Selling, general and
administrative expenses 16,960 14,346 62,667 57,830
Restructuring and impairment charges 18,808 8,338 18,808 13,601
Operating income (loss) (11,068) (4,357) 15,234 16,167
Interest expense 6,187 6,995 26,151 27,623
Income (loss) before income
taxes and cumulative effect
of accounting change (17,255) (11,352) (10,917) (11,456)
Income taxes (213) 287 904 897
Income (loss) before
cumulative effect of
accounting change (17,042) (11,639) (11,821) (12,353)
Cumulative effect of accounting
change 0 0 0 (48,799)
Net income (loss) ($17,042) ($11,639) ($11,821) ($61,152)
Amounts per common share:
Basic: Income (loss) before
cumulative effect of
accounting change ($1.62) ($1.12) ($1.13) ($1.18)
Cumulative effect of
accounting change 0.00 0.00 0.00 (4.68)
Net income (loss) ($1.62) ($1.12) ($1.13) ($5.86)
Diluted: Income (loss) before
cumulative effect of
accounting change ($1.62) ($1.12) ($1.13) ($1.18)
Cumulative effect of
accounting change 0.00 0.00 0.00 (4.68)
Net income (loss) ($1.62) ($1.12) ($1.13) ($5.86)
Common shares used in the
computation
Basic 10,526 10,434 10,506 10,434
Diluted 10,526 10,434 10,506 10,434
Other financial data:
EBITDA, as defined $12,005 $13,061 $50,561 $52,244
Note A--In the fourth quarter of 2003 the Company recorded primarily non-
cash charges for restructuring and asset impairment charges primarily
related to restructuring at the Company's Forge Group. The charges are
composed of $.6 million for the impairment of inventory which is included
in cost of products sold and $18.8 million for other restructuring and
asset impairment which are reflected in restructuring and other unusual
charges.
Note B--The Company completed the impairment tests required by
Statement of Financial Accounting 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 C--The effective income tax rate for the year ended December 31, 2003
is less than the statutory Federal income tax rate due primarily to the
non-recognition of net operating loss carryforwards.
Note D--EBITDA reflects earnings before cumulative effect of accounting
change, interest and income taxes (Operating Income), and excludes
depreciation and 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 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 satisfaction of a
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 (loss) to
EBITDA, as defined:
Three Months Ended Twelve Months Ended
December 31, December 31,
2003 2002 2003 2002
Net income (loss) ($17,042) ($11,639) ($11,821) ($61,152)
Add back:
Cumulative effect of
accounting change 0 0 0 48,799
Interest expense 6,187 6,995 26,151 27,623
Income taxes (213) 287 904 897
Depreciation and amortization 3,416 3,587 15,478 16,307
Restructuring and impairment
charges 19,446 13,928 19,446 19,190
Miscellaneous 211 (97) 403 580
EBITDA, as defined $12,005 $13,061 $50,561 $52,244
CONSOLIDATED CONDENSED BALANCE SHEETS
PARK-OHIO HOLDINGS CORP. AND SUBSIDIARIES
December 31 December 31
2003 2002
(Unaudited) (Audited)
(In Thousands)
ASSETS
Current Assets
Cash and cash equivalents $3,718 $8,812
Accounts receivable, net 100,938 101,477
Inventories 149,075 156,067
Other current assets 10,780 8,626
Total Current Assets 264,511 274,982
Property, Plant and Equipment 225,710 227,426
Less accumulated depreciation 129,559 114,302
Total Property Plant and Equipment 96,151 113,124
Other Assets
Goodwill 82,278 81,464
Net assets held for sale 2,321 19,205
Other 62,191 52,083
Total Other Assets 146,790 152,752
Total Assets $507,452 $540,858
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities
Trade accounts payable $66,158 $74,868
Accrued expenses 46,623 48,907
Current portion of long-term liabilities 2,811 3,056
Total Current Liabilities 115,592 126,831
Long-Term Liabilities, less current portion
9.25% Senior Subordinated Notes due 2007 199,930 199,930
Revolving credit maturing on July 30, 2007 101,000 114,000
Other long-term debt 8,234 9,886
Other postretirement benefits and
other long-term liabilities 26,671 27,312
Total Long-Term Liabilities 335,835 351,128
Shareholders' Equity 56,025 62,899
Total Liabilities and
Shareholders' Equity $507,452 $540,858
SOURCE Park-Ohio Holdings Corp.
03/09/2004
CONTACT: Edward F. Crawford of Park-Ohio Holdings Corp.,
+1-216-692-7200/
First Call Analyst: /
FCMN Contact: /
Web site: http://www.firstcallevents.com/service/ajwz401856625gf12.html/
(PKOH)
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