Park-Ohio Holdings Corp. (NASDAQ: PKOH) today announced its results for
the second quarter of 2015.
SECOND QUARTER RESULTS
Net sales were a quarterly record $377.3 million for the second quarter
of 2015, an increase of $34.0 million, or 9.9%, from net sales of $343.3
million for the second quarter of 2014.
ParkOhio reported net income attributable to ParkOhio common
shareholders of $12.4 million, or $1.00 per diluted share, for the
second quarter of 2015. This compared to net income attributable to
ParkOhio common shareholders of $12.4 million, or $1.00 per diluted
share, for the second quarter of 2014. As adjusted earnings were $1.04
per diluted share in the second quarter of 2015 compared to $1.02 per
diluted share in the second quarter of 2014. Please refer to the table
that follows for a reconciliation of net income to as adjusted earnings.
In addition, EBITDA, as defined was $34.1 million during the second
quarter of 2015 compared to EBITDA, as defined of $32.7 million during
the second quarter of 2014.
YEAR-TO-DATE RESULTS
Net sales were $752.0 million for the first six months of 2015, an
increase of $90.9 million, or 13.7%, from net sales of $661.1 million in
the first six months of 2014. ParkOhio reported net income attributable
to ParkOhio common shareholders of $23.2 million, or $1.87 per diluted
share, for the first six months of 2015. This compares to net income
attributable to ParkOhio common shareholders of $22.5 million, or $1.81
per diluted share, for the first six months of 2014. As adjusted
earnings were $1.93 per diluted share in the first six months of 2015
compared to $1.86 per diluted share in the first six months of 2014.
Please refer to the table that follows for a reconciliation of net
income to as adjusted earnings. In addition, EBITDA, as defined was a
record $67.0 million during the first six months of 2015 and compares to
EBITDA, as defined of $61.9 million during the first six months of 2014.
Edward F. Crawford, Chairman and Chief Executive Officer stated, "The
year-to-date results demonstrate the potential of ParkOhio as a
diversified, international manufacturing and supply chain management
company."
A conference call reviewing ParkOhio's second quarter results will be
broadcast live over the Internet on Monday, August 10, 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 45 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.
These forward-looking statements involve known and unknown risks,
uncertainties and other factors that may cause our actual results,
performance and achievements, or industry results, to be materially
different from any future results, performance or achievements expressed
or implied by such forward-looking statements. These factors that could
cause actual results to differ materially from expectations include, but
are not limited to the following: our ability to successfully integrate
acquired companies and achieve the expected results of such
acquisitions; our substantial indebtedness; the uncertainty of the
global economic environment; general business conditions and competitive
factors, including pricing pressures and product innovation; demand for
our products and services; raw material availability and pricing;
fluctuations in energy costs; component part availability and pricing;
changes in our relationships with customers and suppliers; the financial
condition of our customers, including the impact of any bankruptcies;
our ability to successfully integrate other recent and future
acquisitions into existing operations; the amounts and timing, if any,
of purchases of our common stock; changes in general domestic economic
conditions such as inflation rates, interest rates, tax rates,
unemployment rates, higher labor and healthcare costs, recessions and
changing government policies, laws and regulations, including the
uncertainties related to any global financial crises; adverse impacts to
us, our suppliers and customers from acts of terrorism or hostilities;
our ability to meet various covenants, including financial covenants,
contained in the agreements governing our indebtedness; disruptions,
uncertainties or volatility in the credit markets that may limit our
access to capital; potential disruption due to a partial or complete
reconfiguration of the European Union; increasingly stringent domestic
and foreign governmental regulations, including those affecting the
environment; inherent uncertainties involved in assessing our potential
liability for environmental remediation-related activities; the outcome
of pending and future litigation and other claims and disputes with
customers; the outcome of the review being conducted by the special
committee of our Board of Directors; our dependence on the automotive
and heavy-duty truck industries, which are highly cyclical; the
dependence of the automotive industry on consumer spending, which could
be lower due to the effects of the recent financial crises; our ability
to negotiate contracts with labor unions; our dependence on key
management; our dependence on information systems; our ability to
continue to pay cash dividends; and the other factors we describe under
the "Item 1A. Risk Factors" included in the Company's Annual Report on
Form 10-K for the year ended December 31, 2014. Any forward-looking
statement speaks only as of the date on which such statement is made,
and we undertake no obligation to update any forward-looking statement,
whether as a result of new information, future events or otherwise,
except as required by law. In light of these and other uncertainties,
the inclusion of a forward-looking statement herein should not be
regarded as a representation by us that our plans and objectives will be
achieved. The Company assumes no obligation to update the information in
this release.
|
| |
| |
Park-Ohio Holdings Corp. and Subsidiaries |
Condensed Consolidated Statements of Income (Unaudited) |
| | | |
|
| | Three Months Ended June 30, | | Six Months Ended June 30, |
| | 2015 |
| 2014 | | 2015 |
| 2014 |
| | (In millions, except earnings per share data) |
Net sales
| |
$
|
377.3
| | |
$
|
343.3
| | |
$
|
752.0
| | |
$
|
661.1
| |
Cost of sales
| |
316.9
|
| |
282.3
|
| |
633.2
|
| |
544.1
|
|
Gross profit
| |
60.4
| | |
61.0
| | |
118.8
| | |
117.0
| |
Selling, general and administrative expenses
| |
34.8
|
| |
34.9
|
| |
68.9
|
| |
68.7
|
|
Operating income
| |
25.6
| | |
26.1
| | |
49.9
| | |
48.3
| |
Interest expense
| |
6.9
|
| |
6.6
|
| |
13.7
|
| |
12.9
|
|
Income before income taxes
| |
18.7
| | |
19.5
| | |
36.2
| | |
35.4
| |
Income tax expense
| |
6.1
|
| |
6.6
|
| |
12.5
|
| |
12.2
|
|
Net income
| |
12.6
| | |
12.9
| | |
23.7
| | |
23.2
| |
Net income attributable to noncontrolling interest
| |
(0.2
|
)
| |
(0.5
|
)
| |
(0.5
|
)
| |
(0.7
|
)
|
Net income attributable to ParkOhio common shareholders
| |
$
|
12.4
|
| |
$
|
12.4
|
| |
$
|
23.2
|
| |
$
|
22.5
|
|
| | | | | | | |
|
Earnings per common share attributable to ParkOhio common
shareholders:
| | | | | | | | |
Basic
| |
$
|
1.02
|
| |
$
|
1.02
|
| |
$
|
1.90
|
| |
$
|
1.86
|
|
Diluted
| |
$
|
1.00
|
| |
$
|
1.00
|
| |
$
|
1.87
|
| |
$
|
1.81
|
|
Weighted-average shares used to compute earnings per share:
| | | | | | | | |
Basic
| |
12.2
|
| |
12.1
|
| |
12.2
|
| |
12.1
|
|
Diluted
| |
12.4
|
| |
12.4
|
| |
12.4
|
| |
12.4
|
|
| | | | | | | |
|
Dividend per common share
| |
$
|
0.125
|
| |
$
|
0.125
|
| |
$
|
0.250
|
| |
$
|
0.125
|
|
| | | | | | | |
|
Other financial data:
| | | | | | | | |
EBITDA, as defined
| |
$
|
34.1
|
| |
$
|
32.7
|
| |
$
|
67.0
|
| |
$
|
61.9
|
|
| | | | | | | | | | | | | | | |
|
Park-Ohio Holdings Corp. and Subsidiaries
Supplemental
Non-GAAP Financial Measures (Unaudited)
As adjusted earnings are a measure of earnings that excludes significant
non-cash credits and charges; and significant and infrequent contingency
expenses. As adjusted earnings reflect net income after: the exclusion
of net income attributable to noncontrolling interest and before the
inclusion of acquisition-related costs in cost of sales and in selling,
general and administrative ("SG&A") expenses, and executive severance.
The acquisition-related costs in cost of sales relate to the fair value
measurements to inventory acquired from the acquisitions that were
expensed during the periods presented. Acquisition-related costs in SG&A
expenses relate to adjustments to fair-value of contingent consideration
related to certain acquisitions. As adjusted earnings are 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
as adjusted earnings because management uses as adjusted earnings to
measure performance. As adjusted earnings herein may not be comparable
to other similarly titled measures of other companies. The following
table reconciles net income to as adjusted earnings:
|
| |
| |
| | Three Months Ended June 30, |
| Six Months Ended June 30, |
| | 2015 |
| 2014 |
| 2015 |
| 2014 |
| | |
| Diluted | | |
| Diluted | | |
| Diluted | | |
| Diluted |
| | Earnings | | EPS | | Earnings | | EPS |
| Earnings | | EPS | | Earnings | | EPS |
| | (In millions, except for earnings per share (EPS)) |
Net income
| |
$
|
12.6
| | |
$
|
1.02
| | |
$
|
12.9
| | |
$
|
1.04
| | |
$
|
23.7
| | |
$
|
1.91
| | |
$
|
23.2
| | |
$
|
1.87
| |
Net income attributable to noncontrolling interest
| |
(0.2
|
)
| |
(0.02
|
)
| |
(0.5
|
)
| |
(0.04
|
)
|
|
(0.5
|
)
|
|
(0.04
|
)
|
|
(0.7
|
)
|
|
(0.06
|
)
|
Net income attributable to ParkOhio common shareholders
| |
12.4
| | |
1.00
| | |
12.4
| | |
1.00
| | |
23.2
| | |
1.87
| | |
22.5
| | |
1.81
| |
Add back:
| | | | | | | | | | | | | | | | |
Acquisition-related costs in cost of sales
| |
-
| | |
-
| | |
0.1
| | |
0.01
| | |
0.2
| | |
0.02
| | |
0.1
| | |
0.01
| |
Acquisition-related costs in SG&A expenses, net of tax benefit
| |
0.2
| | |
0.02
| | |
0.1
| | |
0.01
| | |
0.3
| | |
0.02
| | |
0.5
| | |
0.04
| |
Executive severance, net of tax benefit
| |
0.3
|
| |
0.02
|
| |
-
|
| |
-
|
|
|
0.3
|
|
|
0.02
|
|
|
-
|
|
|
-
|
|
As adjusted earnings
| |
$
|
12.9
|
| |
$
|
1.04
|
| |
$
|
12.6
|
| |
$
|
1.02
|
|
|
$
|
24.0
|
|
|
$
|
1.93
|
|
|
$
|
23.1
|
|
|
$
|
1.86
|
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
|
Park-Ohio Holdings Corp. and Subsidiaries
Supplemental
Non-GAAP Financial Measures (Unaudited)
EBITDA, as defined reflects net income attributable to ParkOhio common
shareholders before interest expense and income taxes, and excludes
depreciation, amortization, certain non-cash charges and corporate-level
expenses as defined in the Company's revolving credit agreement. The
acquisition-related costs in cost of sales relate to the fair value
measurements to inventory acquired from the acquisitions that were
expensed during the periods presented. Acquisition-related costs in SG&A
expenses relate to adjustments to fair-value of contingent consideration
related to certain acquisitions. EBITDA, as defined is not a measure of
performance under 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, as defined because management
uses EBITDA, as defined to assess the Company's performance and believes
that EBITDA, as defined is useful to investors as an indication of the
Company's satisfaction of its debt service ratio covenant in its
revolving credit agreement. Additionally, EBITDA, as defined 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 attributable to ParkOhio common shareholders to EBITDA, as
defined:
|
| |
| |
| | Three Months Ended June 30, | | Six Months Ended June 30, |
| | 2015 |
| 2014 | | 2015 |
| 2014 |
| | (In millions) |
Net income attributable to ParkOhio common shareholders
| |
$
|
12.4
| | |
$
|
12.4
| | |
$
|
23.2
| | |
$
|
22.5
|
Add back:
| | | | | | | | |
Interest expense
| |
6.9
| | |
6.6
| | |
13.7
| | |
12.9
|
Income tax expense
| |
6.1
| | |
6.6
| | |
12.5
| | |
12.2
|
Depreciation and amortization
| |
7.0
| | |
5.3
| | |
14.0
| | |
10.6
|
Share-based compensation
| |
1.3
| | |
1.2
| | |
2.9
| | |
2.5
|
Acquisition related costs in cost of sales
| |
-
| | |
0.1
| | |
0.2
| | |
0.1
|
Acquisition-related costs in SG&A expenses
| |
0.2
| | |
0.2
| | |
0.3
| | |
0.7
|
Miscellaneous
| |
0.2
|
| |
0.3
|
| |
0.2
|
| |
0.4
|
EBITDA, as defined
| |
$
|
34.1
|
| |
$
|
32.7
|
| |
$
|
67.0
|
| |
$
|
61.9
|
| | | | | | | | | | | | | | |
|
|
|
| |
| | |
Park-Ohio Holdings Corp. and Subsidiaries |
Condensed Consolidated Balance Sheets |
| | | | | |
|
| | | (Unaudited) | | | |
| | | June 30, 2015 | | | December 31, 2014 |
| | | (In millions) |
ASSETS |
Current assets:
| | | | | | |
Cash and cash equivalents
| | |
$
|
50.9
| | | |
$
|
58.0
|
Accounts receivable, net
| | |
216.8
| | | |
208.0
|
Inventories, net
| | |
252.5
| | | |
238.4
|
Deferred tax assets
| | |
28.9
| | | |
28.9
|
Unbilled contract revenue
| | |
31.3
| | | |
26.8
|
Other current assets
| | |
20.0
|
| | |
22.1
|
Total current assets
| | |
600.4
| | | |
582.2
|
Property, plant and equipment, net
| | |
148.6
| | | |
141.1
|
Goodwill
| | |
74.7
| | | |
89.5
|
Intangible assets, net
| | |
96.9
| | | |
88.1
|
Other long-term assets
| | |
78.0
|
| | |
73.3
|
Total assets
| | |
$
|
998.6
|
| | |
$
|
974.2
|
| | | | | |
|
LIABILITIES AND SHAREHOLDERS' EQUITY | |
Current liabilities:
| | | | | | |
Trade accounts payable
| | |
$
|
147.5
| | | |
$
|
160.3
|
Accrued expenses and other
| | |
98.1
|
| | |
103.6
|
Total current liabilities
| | |
245.6
| | | |
263.9
|
Long-term liabilities:
| | | | | | |
Debt, less current portion
| | |
457.2
| | | |
434.4
|
Deferred tax liabilities
| | |
45.4
| | | |
43.9
|
Other postretirement benefits and other long-term liabilities
| | |
40.9
|
| | |
40.1
|
Total long-term liabilities
| | |
543.5
| | | |
518.4
|
Park-Ohio Holdings Corp. and Subsidiaries shareholders' equity
| | |
202.7
| | | |
185.6
|
Noncontrolling interest
| | |
6.8
|
| | |
6.3
|
Total equity
| | |
209.5
|
| | |
191.9
|
Total liabilities and shareholders' equity
| | |
$
|
998.6
|
| | |
$
|
974.2
|
| | | | | | | | |
|
|
|
| | |
Park-Ohio Holdings Corp. and Subsidiaries | |
Condensed Consolidated Statements of Cash Flows (Unaudited) | |
| | | |
|
| | | Six Months Ended June 30, | |
| | | 2015 |
|
| 2014 | |
| | | (In millions) | |
OPERATING ACTIVITIES | | | | | | | |
Net income
| | |
$
|
|
23.7
| | | |
$
|
|
23.2
| | |
Adjustments to reconcile net income to net cash (used) provided by
operating activities:
| | | | | | | |
Depreciation and amortization
| | |
14.0
| | | |
10.6
| | |
Share-based compensation
| | |
2.9
| | | |
2.5
| | |
Gain on sale of assets
| | |
-
| | | |
(0.5
|
)
| |
Other
| | |
-
| | | |
0.7
| | |
Changes in operating assets and liabilities, excluding business
acquisitions:
| | | | | | | |
Accounts receivable
| | |
(10.6
|
)
| | |
(26.4
|
)
| |
Inventories and other current assets
| | |
(18.4
|
)
| | |
(7.4
|
)
| |
Accounts payable and accrued expenses
| | |
(17.7
|
)
| | |
12.2
| | |
Other
| | |
1.1
|
| | |
0.6
|
| |
Net cash (used) provided by operating activities
| | |
(5.0
|
)
| | |
15.5
| | |
INVESTING ACTIVITIES | | | | | | | |
Purchases of property, plant and equipment
| | |
(19.9
|
)
| | |
(12.3
|
)
| |
Proceeds from sale of assets
| | |
-
| | | |
0.5
| | |
Business acquisitions, net of cash acquired
| | |
-
|
| | |
(5.9
|
)
| |
Net cash used by investing activities
| | |
(19.9
|
)
| | |
(17.7
|
)
| |
FINANCING ACTIVITIES | | | | | | | |
Proceeds from term loans and other debt
| | |
3.4
| | | |
-
| | |
Payments on term loans and other debt
| | |
(1.5
|
)
| | |
(4.4
|
)
| |
Proceeds from revolving credit facility, net
| | |
24.9
| | | |
15.8
| | |
Dividends
| | |
(3.1
|
)
| | |
(1.6
|
)
| |
Purchase of treasury stock
| | |
(4.4
|
)
| | |
(3.3
|
)
| |
Other
| | |
-
|
| | |
(1.3
|
)
| |
Net cash provided by financing activities
| | |
19.3
| | | |
5.2
| | |
Effect of exchange rate changes on cash
| | |
(1.5
|
)
| | |
(0.8
|
)
| |
(Decrease) increase in cash and cash equivalents
| | |
(7.1
|
)
| | |
2.2
| | |
Cash and cash equivalents at beginning of period
| | |
58.0
|
| | |
55.2
|
| |
Cash and cash equivalents at end of period
| | |
$
|
|
50.9
|
| | |
$
|
|
57.4
|
| |
Income taxes paid
| | |
$
| |
7.6
| | | |
$
| |
13.2
| | |
Interest paid
| | |
$
| |
12.7
| | | |
$
| |
12.4
| | |
| | | | | | | | | | | | |
|
|
| |
| |
Park-Ohio Holdings Corp. and Subsidiaries |
Business Segment Information (Unaudited) |
| | | |
|
| | Three Months Ended June 30, | | Six Months Ended June 30, |
| | 2015 |
| 2014 | | 2015 |
| 2014 |
| | (In millions) |
Net sales: | | | | | | | | |
Supply Technologies
| |
$
|
150.2
| | |
$
|
142.4
| | |
$
|
301.6
| | |
$
|
276.8
| |
Assembly Components
| |
139.8
| | |
122.0
| | |
280.3
| | |
230.1
| |
Engineered Products
| |
87.3
|
| |
78.9
|
| |
170.1
|
| |
154.2
|
|
| |
$
|
377.3
|
| |
$
|
343.3
|
| |
$
|
752.0
|
| |
$
|
661.1
|
|
| | | | | | | |
|
Income before income taxes: | | | | | | | | |
Supply Technologies
| |
$
|
13.0
| | |
$
|
10.4
| | |
$
|
27.2
| | |
$
|
20.5
| |
Assembly Components
| |
13.6
| | |
12.2
| | |
24.2
| | |
20.3
| |
Engineered Products
| |
5.2
|
| |
10.7
|
| |
11.4
|
| |
21.3
|
|
Total segment operating income
| |
31.8
| | |
33.3
| | |
62.8
| | |
62.1
| |
Corporate costs
| |
(6.2
|
)
| |
(7.2
|
)
| |
(12.9
|
)
| |
(13.8
|
)
|
Interest expense
| |
(6.9
|
)
| |
(6.6
|
)
| |
(13.7
|
)
| |
(12.9
|
)
|
Income before income taxes
| |
$
|
18.7
|
| |
$
|
19.5
|
| |
$
|
36.2
|
| |
$
|
35.4
|
|
| | | | | | | | | | | | | | | |
|
View source version on businesswire.com: http://www.businesswire.com/news/home/20150807005800/en/
Park-Ohio Holdings Corp.
Edward F. Crawford , 440-947-2000