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

Date of report (Date of earliest event reported): July 31, 2006

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)

23000 Euclid Avenue
Cleveland, Ohio 44117
(Address of principal executive offices)

(216) 692-7200
(Registrant’s 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))

 

 

Item 2.02. Results of Operations and Financial Condition.

On July 31, 2006, the Company issued a press release announcing its 2006 2nd quarter 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 July 31, 2006.

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: July 31, 2006		By:		/s/Richard P. Elliott
				Richard P. Elliott
				Vice President and Chief Financial Officer

Exhibit Index

Exhibit
Number		Description
99.1		Park-Ohio Holdings Corp. Press Release, dated July 31, 2006.

EXHIBIT 99.1

FOR IMMEDIATE RELEASE		CONTACT:		EDWARD F. CRAWFORD PARK-OHIO HOLDINGS CORP. (216) 692-7200

Park-Ohio Reports Continued Growth in Second Quarter 2006

     CLEVELAND, OHIO, July 31, 2006 — Park-Ohio Holdings Corp. (NASDAQ:PKOH) today announced results for its second quarter ended June 30, 2006.

SIX MONTHS RESULTS

     Park-Ohio reported net sales of $528.7 million for the first six months of 2006, a 16% increase on sales of $457.7 million for the same period of 2005.

     Park-Ohio reported income before income taxes of $15.6 million for the first six months of 2006, a 3% increase on income before income taxes of $15.2 million in the same period of 2005. Park-Ohio recorded income tax expense of $5.9 million in the first six months of 2006, resulting in an effective income tax rate of 38%, compared to $1.5 million in the same period of 2005, or an effective income tax rate of 10%. No federal income taxes were expensed in the first six months of 2005 due to the Company’s tax valuation allowance, which was reversed at the end of 2005. Park-Ohio reported net income of $9.7 million, or $.84 per share dilutive, for the first six months of 2006, which included the impact of federal income tax expense. This compared to $13.7 million, or $1.21 per share dilutive, in the same period of 2005, which benefited from the absence of federal income tax expense. If federal income taxes had been recorded in the first six months of 2005, Park-Ohio would have reported net income fully taxed^(A) of $9.4 million, or $.83 per share dilutive.

SECOND QUARTER RESULTS

     Park-Ohio reported net sales of $268.5 million for second quarter 2006, a 17% increase on sales of $228.8 million for second quarter 2005.

     Park-Ohio reported income before income taxes of $7.8 million for second quarter 2006, a 5% decrease on income before income taxes of $8.2 million for second quarter 2005. Park-Ohio recorded income tax expense of $2.9 million in second quarter 2006, resulting in an effective income tax rate of 37%, compared to $.7 million in second quarter 2005, or an effective income tax rate of 9%. No federal income taxes were expensed in second quarter 2005 due to the Company’s tax valuation allowance, which was reversed at the end of 2005. Park-Ohio reported net income of $4.9 million, or $.43 per share dilutive, for second quarter 2006, which included the impact of federal income tax expense. This compared to net income of $7.5 million, or $.66 per share dilutive, for second quarter 2005, which benefited from the absence of federal income tax expense. If federal income taxes had been recorded in second quarter 2005, Park-Ohio would have reported net income fully
taxed^(A) of $5.1 million, or $.45 per share dilutive.

Recent History of Earnings per Share		Six months ended June 30,								Quarter ended June 30,
		2006				2005				2006				2005
Dilutive EPS, GAAP, as reported		$	0.84			$	1.21			$	0.43			$	0.66
Dilutive EPS, as adjusted with 38% income tax		$	0.84			$	0.83			$	0.43			$	0.45

     Edward F. Crawford, Chairman and Chief Executive Officer, stated, “Business conditions continue to be favorable for our Company. Our performance was led by another record quarter in revenue and earnings for ILS. We are addressing disappointing operational and earnings issues at one of the smaller units in our manufactured products segment. We remain confident in the strength of our businesses in the remainder of 2006 and beyond, and reaffirm our guidance of dilutive EPS of $1.65 to $1.75 for 2006.”

     A conference call reviewing Park-Ohio’s second quarter results will be broadcast live over the Internet on Tuesday, August 1, commencing at 10:00 am Eastern Time. Simply log on to http://www.pkoh.com.

     Park-Ohio is a leading provider of supply chain logistics services and a manufacturer of highly engineered products. Headquartered in Cleveland, Ohio, the Company operates 24 manufacturing sites and 39 supply chain logistics facilities.

     In fourth quarter 2005, the Company reversed $7.3 million of its domestic deferred tax asset valuation allowance, increasing net income. In 2006, the Company began recording a quarterly provision for federal income taxes, which resulted in a total effective income tax rate of approximately 38%. Park-Ohio’s significant net operating loss carry-forward should preclude the payment of cash federal income taxes in 2006 and substantially reduce cash payments in 2007. In fourth quarter 2006, if a portion or all of its remaining deferred tax asset will more likely than not be realized, the Company will reverse into income the appropriate portion of its remaining tax valuation allowance of approximately $5.0 million.

(Note A) Reconciliation to GAAP:		Six months ended								Quarter ended
(In millions, except EPS)		June 30,								June 30,
		2006				2005				2006				2005
Income before income taxes, GAAP, as reported		$	15.6			$	15.2			$	7.8			$	8.2
Income taxes at 38% (GAAP for 2006, Adjusted for 2005)			(5.9	)			(5.8	)			(2.9	)			(3.1	)
Net income (GAAP for 2006, Adjusted for 2005)		$	9.7			$	9.4			$	4.9			$	5.1
Number of dilutive shares			11.4				11.3				11.4				11.3
Dilutive EPS (GAAP for 2006, Adjusted for 2005)		$	0.84			$	0.83			$	0.43			$	0.45

     The Company presents fully-taxed net income and EPS to facilitate comparison between periods because the Company began recording a quarterly provision for federal income taxes in 2006.

     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.

     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 Company’s customers and suppliers, including the impact of any bankruptcies; the Company’s 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 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 INCOME (UNAUDITED)
PARK-OHIO HOLDINGS CORP. AND SUBSIDIARIES
(In Thousands, Except per Share Data)

		Three Months Ended								Six Months Ended
		June 30,								June 30,
		2006				2005				2006				2005
Net sales		$	268,453			$	228,795			$	528,674			$	457,678
Cost of products sold			230,738				193,429				454,072				387,216
Gross profit			37,715				35,366				74,602				70,462
Selling, general and administrative expenses			22,209				20,428				43,928				42,079
Operating income			15,506				14,938				30,674				28,383
Interest expense			7,735				6,715				15,105				13,174
Income before income taxes			7,771				8,223				15,569				15,209
Income taxes			2,870				710				5,911				1,509
Net income		$	4,901			$	7,513			$	9,658			$	13,700
Amounts per common share:
Basic		$	0.45			$	0.69			$	0.88			$	1.26
Diluted		$	0.43			$	0.66			$	0.84			$	1.21
Common shares used in the computation
Basic			10,983				10,886				10,976				10,880
Diluted			11,446				11,348				11,440				11,363
Other financial data:
EBITDA, as defined		$	20,810			$	19,531			$	41,024			$	37,515

Note A—In 2006, the Company began recording a quarterly provision for federal income taxes, resulting in a total effective income tax rate of approximately 38 percent. The Company’s significant net operating loss carryforwards should preclude the cash payment of federal income taxes in 2006. In the fourth quarter of 2006, if a portion or all of its remaining deferred tax asset will more likely than not be realized, the Company will reverse into income the appropriate portion of its remaining tax valuation allowance of approximately $5.0 million.

Note B—EBITDA, as defined, reflects earnings before interest, income taxes, and excludes depreciation, 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 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 Company’s satisfaction of its Debt Service Ratio 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 to EBITDA, as defined:

		Three Months Ended								Six Months Ended
		June 30,								June 30,
		2006				2005				2006				2005
Net income		$	4,901			$	7,513			$	9,658			$	13,700
Add back:
Income taxes			2,870				710				5,911				1,509
Interest expense			7,735				6,715				15,105				13,174
Depreciation and amortization			5,047				4,429				9,827				8,876
Miscellaneous			257				164				523				256
EBITDA, as defined		$	20,810			$	19,531			$	41,024			$	37,515

CONSOLIDATED CONDENSED BALANCE SHEETS
PARK-OHIO HOLDINGS CORP. AND SUBSIDIARIES

		June 30,				December 31,
		2006				2005
		(Unaudited)				(Audited)
		(In Thousands)
ASSETS
Current Assets
Cash and cash equivalents		$	17,106			$	18,696
Accounts receivable, net			187,869				153,502
Inventories			227,536				190,553
Deferred tax assets			8,627				8,627
Other current assets			11,450				21,651
Total Current Assets			452,588				393,029
Property, Plant and Equipment			250,025				244,367
Less accumulated depreciation			140,327				130,557
Total Property Plant and Equipment			109,698				113,810
Other Assets
Goodwill			85,418				82,703
Net assets held for sale			7,178				1,992
Other			71,042				71,320
Total Other Assets			163,638				156,015
Total Assets		$	725,924			$	662,854
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current Liabilities
Trade accounts payable		$	135,166			$	115,401
Accrued expenses			67,334				65,416
Current portion of long-term liabilities			5,557				4,161
Total Current Liabilities			208,057				184,978
Long-Term Liabilities, less current portion
8.375% Senior Subordinated Notes due 2014			210,000				210,000
Revolving credit maturing on December 31, 2010			157,400				128,300
Other long-term debt			6,116				6,705
Deferred tax liability			3,176				3,176
Other postretirement benefits and other long-term liabilities			24,967				26,174
Total Long-Term Liabilities			401,659				374,355
Shareholders’ Equity			116,208				103,521
Total Liabilities and Shareholders’ Equity		$	725,924			$	662,854

BUSINESS SEGMENT INFORMATION (UNAUDITED)
PARK-OHIO HOLDINGS CORP. AND SUBSIDIARIES
(In Thousands)

		Three Months Ended June 30,								Six Months Ended June 30,
		2006				2005				2006				2005
NET SALES
ILS		$	150,338			$	129,515			$	300,497			$	256,402
Aluminum Products			44,913				43,094				87,615				85,984
Manufactured Products			73,202				56,186				140,562				115,292
		$	268,453			$	228,795			$	528,674			$	457,678
INCOME BEFORE INCOME TAXES
ILS		$	10,231			$	8,271			$	20,653			$	16,475
Aluminum Products			2,396				3,481				4,436				5,904
Manufactured Products			6,132				5,949				11,794				11,762
			18,759				17,701				36,883				34,141
Corporate and Other Costs			(3,253	)			(2,763	)			(6,209	)			(5,758	)
Interest Expense			(7,735	)			(6,715	)			(15,105	)			(13,174	)
		$	7,771			$	8,223			$	15,569			$	15,209