Table of Contents
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
Current Report Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
of the Securities Exchange Act of 1934
Date of report (Date of earliest event reported): March 7, 2011
Park-Ohio Holdings Corp.
(Exact name of registrant as specified in its charter)
Ohio (State or other jurisdiction of incorporation or organization) |
000-03134 (Commission File No.) |
34-1867219 (I.R.S. Employer Identification Number) |
6065 Parkland Blvd.
Cleveland, Ohio 44124
(Address of principal executive offices)
Cleveland, Ohio 44124
(Address of principal executive offices)
(440) 947-2000
(Registrants telephone number, including area code)
(Registrants telephone number, including area code)
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the following
provisions (see General Instruction A.2.):
o | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
o | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
o | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
o | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
TABLE OF CONTENTS
Item 2.02. Results of Operations and Financial Condition | ||||||||
Item 9.01. Financial Statements and Exhibits | ||||||||
SIGNATURES | ||||||||
Exhibit Index | ||||||||
EX-99.1 |
Table of Contents
Item 2.02. Results of Operations and Financial Condition.
On March 7, 2011, the Company issued a press release announcing its 2010 year-end results. The
press release is attached hereto as Exhibit 99.1.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits
Exhibit | ||||
Number | Description | |||
99.1 | Park-Ohio Holdings Corp. Press Release, dated March 7, 2011. |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused
this report to be signed on its behalf by the undersigned thereunto duly authorized.
Park-Ohio Holdings Corp. (Registrant) |
||||
Date: March 7, 2011 | By: | /s/ Jeffrey L. Rutherford | ||
Jeffrey L. Rutherford | ||||
Vice President and Chief Financial Officer |
Table of Contents
EXHIBIT 99.1
FOR IMMEDIATE RELEASE | CONTACT: | EDWARD F. CRAWFORD | ||
PARK-OHIO HOLDINGS CORP. | ||||
(440) 947-2000 |
ParkOhio Announces 2010 Results
CLEVELAND, OHIO, March 7, 2011 Park-Ohio Holdings Corp. (NASDAQ:PKOH) today announced
results for its fourth quarter and year ended December 31, 2010.
FOURTH QUARTER RESULTS
Net sales were $220.5 million for fourth quarter 2010, an increase of 17% from net sales of
$187.8 million for fourth quarter 2009. Net income for the fourth quarter of 2010 was $3.5
million, or $.30 per share dilutive compared to net income of $.2 million, or $.02 per share
dilutive, for fourth quarter 2009. Included in the 2009 results were a gain on the purchase of
Park-Ohio Industries, Inc. 8.375% senior subordinated notes due 2014 of $1.2 million and impairment
and restructuring charges of $7.0 million.
FULL YEAR RESULTS
Net sales were $813.5 million for 2010, an increase of 16% from net sales of $701.0 million
for the same period of 2009. Net income was $15.2 million, or $1.29 per share dilutive, versus net
loss of $5.2 million, or $(.47) per share dilutive, in the same period of 2009. Included in the
2010 results were gains of $2.2 million representing the excess of the aggregate fair value of
purchased net assets over the purchase price for the ACS business unit acquisition and a $3.5
million asset impairment charge related to the write down of an investment. Included in the 2009
results were a gain on the purchase of Park-Ohio Industries, Inc. 8.375% senior subordinated notes
due 2014 of $6.3 million and a charge to reserve for an account receivable from a customer in
bankruptcy of $4.2 million and impairment and restructuring charges of $7.0 million.
Edward F. Crawford, Chairman and Chief Executive Officer, stated, Our success in 2010
indicates we have the company well prepared for the future. All three of our operating segments have
increased their competitive edge, and we look forward to a bright future.
A conference call reviewing ParkOhios fourth quarter results will be broadcast live over the
Internet on Tuesday, March 8, 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 31 manufacturing sites
and 49 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.
- more -
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 financial condition of the
Companys customers and suppliers, including the impact of any bankruptcies; the Companys 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 Companys
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 INCOME (UNAUDITED)
PARK-OHIO HOLDINGS CORP. AND SUBSIDIARIES
(In Thousands, Except per Share Data)
PARK-OHIO HOLDINGS CORP. AND SUBSIDIARIES
(In Thousands, Except per Share Data)
Three Months Ended | Year Ended | |||||||||||||||
December 31, | December 31, | |||||||||||||||
2010 | 2009 | 2010 | 2009 | |||||||||||||
Net sales |
$ | 220,532 | $ | 187,795 | $ | 813,522 | $ | 701,047 | ||||||||
Cost of products sold |
184,051 | 159,798 | 679,425 | 597,200 | ||||||||||||
Gross profit |
36,481 | 27,997 | 134,097 | 103,847 | ||||||||||||
Selling, general and administrative expenses |
26,300 | 21,249 | 91,755 | 87,786 | ||||||||||||
Asset impairment charge |
0 | 5,206 | 3,539 | 5,206 | ||||||||||||
Operating income |
10,181 | 1,542 | 38,803 | 10,855 | ||||||||||||
Gain on purchase of 8.375% senior subordinated notes |
0 | (1,189 | ) | 0 | (6,297 | ) | ||||||||||
Gain on acquisition of business |
0 | 0 | (2,210 | ) | 0 | |||||||||||
Interest expense |
5,720 | 5,193 | 23,792 | 23,189 | ||||||||||||
Income (loss) before income taxes |
4,461 | (2,462 | ) | 17,221 | (6,037 | ) | ||||||||||
Income taxes |
939 | (2,667 | ) | 2,034 | (828 | ) | ||||||||||
Net income (loss) |
$ | 3,522 | $ | 205 | $ | 15,187 | $ | (5,209 | ) | |||||||
Amounts per common share: |
||||||||||||||||
Basic |
$ | 0.31 | $ | 0.02 | $ | 1.34 | $ | (0.47 | ) | |||||||
Diluted |
$ | 0.30 | $ | 0.02 | $ | 1.29 | $ | (0.47 | ) | |||||||
Common shares used in the computation: |
||||||||||||||||
Basic |
11,408 | 11,080 | 11,314 | 10,968 | ||||||||||||
Diluted |
11,917 | 11,583 | 11,807 | 10,968 | ||||||||||||
Other financial data: |
||||||||||||||||
EBITDA, as defined |
$ | 15,668 | $ | 21,325 | $ | 63,987 | $ | 57,067 | ||||||||
Note AEBITDA, as defined, reflects earnings before interest, income taxes, and excludes
depreciation, amortization, certain non-cash charges and corporate-level expenses as defined in the
Companys 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 Companys satisfaction of its Debt Service Ratio
covenant in its revolving credit agreement and because EBITDA is a measure used under the Companys
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 | Year Ended | |||||||||||||||
December 31, | December 31, | |||||||||||||||
2010 | 2009 | 2010 | 2009 | |||||||||||||
Net income (loss) |
$ | 3,522 | $ | 205 | $ | 15,187 | $ | (5,209 | ) | |||||||
Add back: |
||||||||||||||||
Income taxes |
939 | (2,667 | ) | 2,034 | (828 | ) | ||||||||||
Deferred tax impact netted in acquisition gain |
0 | 0 | 1,354 | 0 | ||||||||||||
Customer relationship asset upon acquisition |
0 | 0 | (990 | ) | 0 | |||||||||||
Interest expense |
5,720 | 5,193 | 23,792 | 23,189 | ||||||||||||
Depreciation and amortization |
5,023 | 4,761 | 17,122 | 18,776 | ||||||||||||
Gain on the purchase of 8.375% senior subordinated notes |
0 | 6,232 | 0 | 6,232 | ||||||||||||
Asset impairment charge |
0 | 7,003 | 3,539 | 7,003 | ||||||||||||
Reserve for customer in bankruptcy |
0 | 0 | 0 | 4,154 | ||||||||||||
Miscellaneous |
464 | 598 | 1,949 | 3,750 | ||||||||||||
EBITDA, as defined |
$ | 15,668 | $ | 21,325 | $ | 63,987 | $ | 57,067 | ||||||||
Note BIn 2009, the Company recorded a gain of $6.3 million on the purchase of $15.15 million
principal amount of Park-Ohio Industries, Inc. 8.375% senior subordinated notes due 2014 of which
$1.2 million was recorded in the fourth quarter.
Note CIn the fourth quarter of 2009, the Company recorded $7.0 million asset impairment charges
associated with weakness in the railroad industry ($3.0 million in the Manufactured Products
segment) along with a decision to attempt to sell two business units ($4.0 million in the Supply
Technologies segment) inventory impairment charges of $1.8 million were included in Cost of
Products Sold and $5.2 million were included in Restructuring and impairment charges.
Note DIn the first nine months of 2009 the Company recorded a charge of $4.2 million to reserve
for an account receivable from a customer in bankruptcy.
Note EIn the third quarter of 2010 the Company recorded a bargain purchase gain of $2.2 million
from the acquisition of certain assets and assumption of specific liabilities of Assembly Component
Systems Inc. representing the excess of the aggregate fair value of purchased net assets over the
purchase price and a $3.5 million asset impairment charge relating to the write down of an
investment.
CONSOLIDATED CONDENSED BALANCE SHEETS
PARK-OHIO HOLDINGS CORP. AND SUBSIDIARIES
PARK-OHIO HOLDINGS CORP. AND SUBSIDIARIES
December 31, | December 31, | |||||||
2010 | 2009 | |||||||
(Unaudited) | (Audited) | |||||||
(In Thousands) | ||||||||
ASSETS |
||||||||
Current Assets |
||||||||
Cash and cash equivalents |
$ | 35,311 | $ | 23,098 | ||||
Accounts receivable,
net |
126,409 | 104,643 | ||||||
Inventories |
192,542 | 182,116 | ||||||
Deferred tax assets |
10,496 | 8,104 | ||||||
Unbilled contract revenue |
12,751 | 19,411 | ||||||
Other current assets |
12,800 | 12,700 | ||||||
Total Current Assets |
390,309 | 350,072 | ||||||
Property, Plant and Equipment |
253,077 | 245,240 | ||||||
Less accumulated depreciation |
184,294 | 168,609 | ||||||
Total Property Plant and Equipment |
68,783 | 76,631 | ||||||
Other Assets |
||||||||
Goodwill |
9,100 | 4,155 | ||||||
Other |
84,340 | 71,410 | ||||||
Total Other Assets |
93,440 | 75,565 | ||||||
Total Assets |
$ | 552,532 | $ | 502,268 | ||||
LIABILITIES AND SHAREHOLDERS EQUITY |
||||||||
Current Liabilities |
||||||||
Trade accounts payable |
$ | 95,695 | $ | 75,083 | ||||
Accrued expenses |
59,487 | 39,150 | ||||||
Current portion of long-term debt |
13,756 | 10,894 | ||||||
Current portion of other postretirement benefits |
2,178 | 2,197 | ||||||
Total Current Liabilities |
171,116 | 127,324 | ||||||
Long-Term Liabilities, less current portion |
||||||||
8.375% Senior Subordinated Notes due 2014 |
183,835 | 183,835 | ||||||
Revolving credit and term debt maturing on April 30,2014 |
113,300 | 134,600 | ||||||
Other long-term debt |
5,322 | 4,668 | ||||||
Deferred tax liability |
9,721 | 7,200 | ||||||
Other postretirement benefits and other long-term liabilities |
22,863 | 21,831 | ||||||
Total Long-Term Liabilities |
335,041 | 352,134 | ||||||
Shareholders Equity |
46,375 | 22,810 | ||||||
Total Liabilities and Shareholders Equity |
$ | 552,532 | $ | 502,268 | ||||
BUSINESS SEGMENT INFORMATION (UNAUDITED)
PARK-OHIO HOLDINGS CORP. AND SUBSIDIARIES
(In Thousands)
PARK-OHIO HOLDINGS CORP. AND SUBSIDIARIES
(In Thousands)
Three Months Ended December 31, | Year Ended December 31, | |||||||||||||||
2010 | 2009 | 2010 | 2009 | |||||||||||||
NET SALES |
||||||||||||||||
Supply Technologies |
$ | 106,861 | $ | 85,926 | $ | 402,169 | $ | 328,805 | ||||||||
Aluminum Products |
33,958 | 35,732 | 143,672 | 111,388 | ||||||||||||
Manufactured Products |
79,713 | 66,137 | 267,681 | 260,854 | ||||||||||||
$ | 220,532 | $ | 187,795 | $ | 813,522 | $ | 701,047 | |||||||||
INCOME (LOSS) BEFORE INCOME TAXES |
||||||||||||||||
Supply Technologies |
$ | 5,993 | $ | 816 | $ | 22,216 | $ | 8,531 | ||||||||
Aluminum Products |
434 | 1,638 | 6,582 | (5,155 | ) | |||||||||||
Manufactured Products |
7,952 | 2,974 | 28,739 | 26,472 | ||||||||||||
14,379 | 5,428 | 57,537 | 29,848 | |||||||||||||
Corporate expenses |
(4,199 | ) | (3,887 | ) | (15,195 | ) | (13,787 | ) | ||||||||
Gain on purchase of 8.375% senior
subordinated notes |
0 | 1,190 | 0 | 6,297 | ||||||||||||
Gain on acquisition of business |
0 | 0 | 2,210 | 0 | ||||||||||||
Asset impairment charge |
0 | 0 | (3,539 | ) | (5,206 | ) | ||||||||||
Interest Expense |
(5,719 | ) | (5,193 | ) | (23,792 | ) | (23,189 | ) | ||||||||
$ | 4,461 | $ | (2,462 | ) | $ | 17,221 | $ | (6,037 | ) | |||||||