Park-Ohio Holdings Corp. (NASDAQ: PKOH) today announced its results for
the second quarter of 2016.
SECOND QUARTER RESULTS
In the second quarter of 2016, net sales were $329.4 million and net
income attributable to ParkOhio common shareholders was $9.0 million, or
$0.73 per diluted share. These results compared to net sales of $377.3
million and net income attributable to ParkOhio common shareholders of
$12.4 million, or $1.00 per diluted share, in the second quarter of
2015, and net sales of $328.0 million and net income attributable to
ParkOhio shareholders of $2.7 million, or $0.22 per diluted share, in
the first quarter of 2016.
Adjusted earnings in the second quarter of 2016 were $0.76 per diluted
share compared to $1.04 per diluted share in the second quarter of 2015
and $0.46 per diluted share in the first quarter of 2016. Please refer
to the table that follows for a reconciliation of net income to adjusted
earnings.
EBITDA, as defined was $31.3 million in the second quarter of 2016
compared to $34.1 million in the second quarter of 2015 and $25.6
million in the first quarter of 2016. Please refer to the table that
follows for a reconciliation of net income to EBITDA, as defined.
Edward F. Crawford, Chairman and Chief Executive Officer, stated,
"ParkOhio's aggressive reaction to our first quarter results has begun
to take hold. Further improvements are expected in the second half of
2016."
YEAR-TO-DATE RESULTS
In the six months ended June 30, 2016, net sales were $657.4 million and
net income attributable to ParkOhio common shareholders was $11.7
million, or $0.96 per diluted share. These results compared to net sales
of $752.0 million and net income attributable to ParkOhio common
shareholders of $23.2 million, or $1.87 per diluted share, in the
comparable period in 2015. Adjusted earnings in the 2016 period were
$1.23 per diluted share compared to $1.93 per diluted share in the 2015
period.
EBITDA, as defined was $56.9 million in the first six months of 2016
compared to $67.0 million in the 2015 period. Please refer to the table
that follows for a reconciliation of net income to EBITDA, as defined.
A conference call reviewing ParkOhio's second quarter results will be
broadcast live over the Internet on Tuesday, August 9, commencing at
10:00 am Eastern Time. Simply log on to http://www.pkoh.com.
ParkOhio is a diversified international company providing world-class
customers with a supply chain management outsourcing service, capital
equipment used on their production lines, and manufactured components
used to assemble their products. Headquartered in Cleveland, Ohio,
ParkOhio operates 45 manufacturing sites and 54 supply chain logistics
facilities, through three reportable segments: Supply Technologies,
Assembly Components and Engineered Products.
This news release contains forward-looking statements, including
statements regarding future performance of the Company, that are subject
to 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
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 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
the current 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 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; our ability to
negotiate contracts with labor unions; our dependence on key management;
our dependence on information systems; and the other factors we describe
under "Item 1A. Risk Factors" included in the Company's Annual Report on
Form 10-K for the year ended December 31, 2015. 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, |
| | 2016 |
| 2015 | | 2016 |
| 2015 |
| | (In millions, except per share data) |
Net sales
| |
$
|
329.4
| | |
$
|
377.3
| | |
$
|
657.4
| | |
$
|
752.0
| |
Cost of sales
| |
275.1
|
| |
316.9
|
| |
555.3
|
| |
633.2
|
|
Gross profit
| |
54.3
| | |
60.4
| | |
102.1
| | |
118.8
| |
Selling, general and administrative expenses
| |
34.0
| | |
34.8
| | |
66.5
| | |
68.9
| |
Asset impairment
| |
-
|
| |
-
|
| |
4.0
|
| |
-
|
|
Operating income
| |
20.3
| | |
25.6
| | |
31.6
| | |
49.9
| |
Interest expense
| |
7.0
|
| |
6.9
|
| |
14.1
|
| |
13.7
|
|
Income before income taxes
| |
13.3
| | |
18.7
| | |
17.5
| | |
36.2
| |
Income tax expense
| |
4.3
|
| |
6.1
|
| |
5.8
|
| |
12.5
|
|
Net income
| |
9.0
| | |
12.6
| | |
11.7
| | |
23.7
| |
Net income attributable to noncontrolling interest
| |
-
|
| |
(0.2
|
)
| |
-
|
| |
(0.5
|
)
|
Net income attributable to ParkOhio common shareholders
| |
$
|
9.0
|
| |
$
|
12.4
|
| |
$
|
11.7
|
| |
$
|
23.2
|
|
| | | | | | | |
|
Earnings per common share attributable to ParkOhio common
shareholders:
| | | | | | | | |
Basic
| |
$
|
0.74
|
| |
$
|
1.02
|
| |
$
|
0.97
|
| |
$
|
1.90
|
|
Diluted
| |
$
|
0.73
|
| |
$
|
1.00
|
| |
$
|
0.96
|
| |
$
|
1.87
|
|
Weighted-average shares used to compute earnings per share:
| | | | | | | | |
Basic
| |
12.1
|
| |
12.2
|
| |
12.1
|
| |
12.2
|
|
Diluted
| |
12.3
|
| |
12.4
|
| |
12.2
|
| |
12.4
|
|
| | | | | | | |
|
Dividends per common share
| |
$
|
0.125
|
| |
$
|
0.125
|
| |
$
|
0.250
|
| |
$
|
0.250
|
|
| | | | | | | |
|
Other financial data:
| | | | | | | | |
EBITDA, as defined
| |
$
|
31.3
|
| |
$
|
34.1
|
| |
$
|
56.9
|
| |
$
|
67.0
|
|
| | | | | | | | | | | | | | | |
|
Park-Ohio Holdings Corp. and Subsidiaries
Supplemental
Non-GAAP Financial Measures (Unaudited)
Adjusted earnings is a measure of earnings that excludes significant
non-cash credits and charges and certain infrequent expenses. Adjusted
earnings reflects net income attributable to ParkOhio common
shareholders, excluding acquisition-related costs; plant relocation and
related costs; and restructuring, severance and impairment charges.
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
selling, general and administrative expenses relate to contingent
consideration expenses related to certain acquisitions. 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 from continuing operations, 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 adjusted
earnings because management uses adjusted earnings to measure
performance. Adjusted earnings herein may not be comparable to other
similarly titled measures of other companies. The following table
reconciles net income to adjusted earnings:
|
| |
| |
| |
| | | | | | Three Months Ended |
| | Three Months Ended June 30, | | Six Months Ended June 30, | | March 31, |
| | 2016 |
| 2015 | | 2016 |
| 2015 | | 2016 |
| | |
| Diluted | | |
| Diluted | | |
| Diluted | | |
| Diluted | | |
| Diluted |
| | Earnings | | EPS | | Earnings | | EPS | | Earnings | | EPS | | Earnings | | EPS | | Earnings | | EPS |
| | (In millions, except for earnings per share (EPS)) | | | | |
Net income
| |
$
|
9.0
| | |
$
|
0.73
| | |
$
|
12.6
| | |
$
|
1.02
| | |
$
|
11.7
| | |
$
|
0.96
| | |
$
|
23.7
| | |
$
|
1.91
| | |
$
|
2.7
| | |
$
|
0.22
| |
Net income attributable to noncontrolling interest
| |
-
|
| |
-
|
| |
(0.2
|
)
| |
(0.02
|
)
| |
-
|
| |
-
|
| |
(0.5
|
)
| |
(0.04
|
)
| |
-
|
| |
-
|
|
Net income attributable to ParkOhio common shareholders
| |
9.0
| | |
0.73
| | |
12.4
| | |
1.00
| | |
11.7
| | |
0.96
| | |
23.2
| | |
1.87
| | |
2.7
| | |
0.22
| |
Adjustments:
| | | | | | | | | | | | | | | | | | | | |
Asset impairment
| |
-
| | |
-
| | |
-
| | |
-
| | |
4.0
| | |
0.33
| | |
-
| | |
-
| | |
4.0
| | |
0.33
| |
Acquisition-related costs in cost of sales
| |
-
| | |
-
| | |
-
| | |
-
| | |
-
| | |
-
| | |
0.2
| | |
0.02
| | |
-
| | |
-
| |
Acquisition-related costs in SG&A expenses
| |
-
| | |
-
| | |
0.2
| | |
0.02
| | |
0.2
| | |
0.02
| | |
0.3
| | |
0.02
| | |
0.2
| | |
0.02
| |
Severance
| |
0.1
| | |
0.01
| | |
0.5
| | |
0.04
| | |
0.5
| | |
0.04
| | |
0.5
| | |
0.04
| | |
0.4
| | |
0.03
| |
Plant relocation and related costs
| |
0.3
| | |
0.02
| | |
-
| | |
-
| | |
0.3
| | |
0.02
| | |
-
| | |
-
| | |
-
| | |
-
| |
Tax effect of adjustments
| |
(0.1
|
)
| |
-
|
| |
(0.2
|
)
| |
(0.02
|
)
| |
(1.7
|
)
| |
(0.14
|
)
| |
(0.2
|
)
| |
(0.02
|
)
| |
(1.6
|
)
| |
(0.14
|
)
|
Adjusted earnings
| |
$
|
9.3
|
| |
$
|
0.76
|
| |
$
|
12.9
|
| |
$
|
1.04
|
| |
$
|
15.0
|
| |
$
|
1.23
|
| |
$
|
24.0
|
| |
$
|
1.93
|
| |
$
|
5.7
|
| |
$
|
0.46
|
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
|
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, income taxes, depreciation and
amortization, and also excludes 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 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 uses EBITDA to assess the Company's performance and
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. Additionally, 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 attributable to
ParkOhio common shareholders to EBITDA, as defined:
|
| |
| |
| |
| | | | | | Three Months Ended |
| | Three Months Ended June 30, | | Six Months Ended June 30, | | March 31, |
| | 2016 |
| 2015 | | 2016 |
| 2015 | | 2016 |
| | (In millions) | | |
Net income attributable to ParkOhio common shareholders
| |
$
|
9.0
| | |
$
|
12.4
| | |
$
|
11.7
| | |
$
|
23.2
| | |
$
|
2.7
|
Add back:
| | | | | | | | | | |
Interest expense
| |
7.0
| | |
6.9
| | |
14.1
| | |
13.7
| | |
7.1
|
Income tax expense
| |
4.3
| | |
6.1
| | |
5.8
| | |
12.5
| | |
1.5
|
Depreciation and amortization
| |
7.4
| | |
7.0
| | |
14.8
| | |
14.0
| | |
7.4
|
Share-based compensation
| |
3.0
| | |
1.3
| | |
5.5
| | |
2.9
| | |
2.5
|
Asset impairment
| |
-
| | |
-
| | |
4.0
| | |
-
| | |
4.0
|
Acquisition related costs in cost of sales
| |
-
| | |
-
| | |
-
| | |
0.2
| | |
-
|
Acquisition related costs in selling, general and administrative
expenses
| |
-
| | |
0.2
| | |
0.2
| | |
0.3
| | |
0.2
|
Miscellaneous
| |
0.6
|
| |
0.2
|
| |
0.8
|
| |
0.2
|
| |
0.2
|
EBITDA, as defined
| |
$
|
31.3
|
| |
$
|
34.1
|
| |
$
|
56.9
|
| |
$
|
67.0
|
| |
$
|
25.6
|
| | | | | | | | | | | | | | | | | | |
|
|
| |
| |
Park-Ohio Holdings Corp. and Subsidiaries |
Condensed Consolidated Balance Sheets |
| | | |
|
| | (Unaudited) | | |
| | June 30, 2016 | | December 31, 2015 |
| | (In millions) |
ASSETS | | |
Current assets:
| | | | |
Cash and cash equivalents
| |
$
|
58.0
| |
$
|
62.0
|
Accounts receivable, net
| |
200.4
| |
199.3
|
Inventories, net
| |
248.9
| |
249.0
|
Other current assets
| |
45.8
| |
39.3
|
Total current assets
| |
553.1
| |
549.6
|
Property, plant and equipment, net
| |
148.6
| |
151.3
|
Goodwill
| |
81.7
| |
82.0
|
Intangible assets, net
| |
89.1
| |
92.8
|
Other long-term assets
| |
68.6
| |
66.4
|
Total assets
| |
$
|
941.1
| |
$
|
942.1
|
| | | |
|
LIABILITIES AND SHAREHOLDERS' EQUITY | | |
Current liabilities:
| | | | |
Trade accounts payable
| |
$
|
134.9
| |
$
|
129.7
|
Accrued expenses and other
| |
96.2
| |
95.5
|
Total current liabilities
| |
231.1
| |
225.2
|
Long-term liabilities, less current portion:
| | | | |
Debt
| |
434.0
| |
445.8
|
Deferred tax liabilities
| |
20.5
| |
20.4
|
Other long-term liabilities
| |
34.3
| |
38.5
|
Total long-term liabilities
| |
488.8
| |
504.7
|
Park-Ohio Holdings Corp. and Subsidiaries shareholders' equity
| |
214.3
| |
205.3
|
Noncontrolling interest
| |
6.9
| |
6.9
|
Total equity
| |
221.2
| |
212.2
|
Total liabilities and shareholders' equity
| |
$
|
941.1
| |
$
|
942.1
|
| | | | | |
|
|
| |
Park-Ohio Holdings Corp. and Subsidiaries |
Condensed Consolidated Statements of Cash Flows (Unaudited) |
| |
|
| | Six Months Ended June 30, |
| | 2016 |
| 2015 |
| | (In millions) |
OPERATING ACTIVITIES | | | | |
Net income
| |
$
|
11.7
| | |
$
|
23.7
| |
Adjustments to reconcile net income to net cash provided (used) by
operating activities:
| | | | |
Depreciation and amortization
| |
14.8
| | |
14.0
| |
Asset impairment
| |
4.0
| | |
-
| |
Share-based compensation
| |
5.5
| | |
2.9
| |
Changes in operating assets and liabilities:
| | | | |
Accounts receivable
| |
(1.0
|
)
| |
(10.6
|
)
|
Inventories
| |
(0.4
|
)
| |
(15.7
|
)
|
Prepaid and other current assets
| |
(6.2
|
)
| |
(2.7
|
)
|
Accounts payable and accrued expenses
| |
5.4
| | |
(17.7
|
)
|
Other noncurrent liabilities
| |
(4.6
|
)
| |
5.2
| |
Other
| |
(1.7
|
)
| |
(4.1
|
)
|
Net cash provided (used) by operating activities
| |
27.5
| | |
(5.0
|
)
|
INVESTING ACTIVITIES | | | | |
Purchases of property, plant and equipment
| |
(14.0
|
)
| |
(19.9
|
)
|
Net cash used by investing activities
| |
(14.0
|
)
| |
(19.9
|
)
|
FINANCING ACTIVITIES | | | | |
Proceeds from term loans and other debt
| |
6.2
| | |
3.4
| |
Payments on term loans and other debt
| |
(2.2
|
)
| |
(1.5
|
)
|
(Payments) proceeds from revolving credit facility, net
| |
(13.5
|
)
| |
24.9
| |
Payments on capital lease facilities, net
| |
(1.6
|
)
| |
-
| |
Dividends
| |
(3.1
|
)
| |
(3.1
|
)
|
Purchases of treasury stock
| |
(1.6
|
)
| |
(4.4
|
)
|
Payment of acquisition earn-out
| |
(2.0
|
)
| |
-
|
|
Net cash (used) provided by financing activities
| |
(17.8
|
)
| |
19.3
| |
Effect of exchange rate changes on cash
| |
0.3
|
| |
(1.5
|
)
|
Decrease in cash and cash equivalents
| |
(4.0
|
)
| |
(7.1
|
)
|
Cash and cash equivalents at beginning of period
| |
62.0
|
| |
58.0
|
|
Cash and cash equivalents at end of period
| |
$
|
58.0
|
| |
$
|
50.9
|
|
Income taxes paid
| |
$
|
2.4
| | |
$
|
7.6
| |
Interest paid
| |
$
|
13.1
| | |
$
|
12.7
| |
| | | | | | | |
|
|
| |
| |
Park-Ohio Holdings Corp. and Subsidiaries |
Business Segment Information (Unaudited) |
| | | |
|
| | Three Months Ended June 30, | | Six Months Ended June 30, |
| | 2016 |
| 2015 | | 2016 |
| 2015 |
| | (In millions) |
Net sales: | | | | | | | | |
Supply Technologies
| |
$
|
132.9
| | |
$
|
150.2
| | |
$
|
262.8
| | |
$
|
301.6
| |
Assembly Components
| |
134.3
| | |
139.8
| | |
266.0
| | |
280.3
| |
Engineered Products
| |
62.2
|
| |
87.3
|
| |
128.6
|
| |
170.1
|
|
| |
$
|
329.4
|
| |
$
|
377.3
|
| |
$
|
657.4
|
| |
$
|
752.0
|
|
| | | | | | | |
|
Segment operating income: | | | | | | | | |
Supply Technologies
| |
$
|
10.9
| | |
$
|
13.0
| | |
$
|
21.1
| | |
$
|
27.2
| |
Assembly Components
| |
14.2
| | |
13.6
| | |
24.4
| | |
24.2
| |
Engineered Products
| |
3.2
|
| |
5.2
|
| |
4.6
|
| |
11.4
|
|
Total segment operating income
| |
28.3
| | |
31.8
| | |
50.1
| | |
62.8
| |
Corporate costs
| |
(8.0
|
)
| |
(6.2
|
)
| |
(14.5
|
)
| |
(12.9
|
)
|
Asset impairment
| |
-
| | |
-
| | |
(4.0
|
)
| |
-
| |
Interest expense
| |
(7.0
|
)
| |
(6.9
|
)
| |
(14.1
|
)
|
|
(13.7
|
)
|
Income before income taxes
| |
$
|
13.3
|
| |
$
|
18.7
|
| |
$
|
17.5
|
| |
$
|
36.2
|
|
| | | | | | | | | | | | | | | |
|
View source version on businesswire.com: http://www.businesswire.com/news/home/20160808006205/en/
Park-Ohio Holdings Corp.
Edward F. Crawford, 440-947-2000