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): March 11, 2008

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 Boulevard
Cleveland, Ohio 44124
(Address of principal executive offices)

(440) 947-2000
(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 March 11, 2008, the Company issued a press release announcing its 2007 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 11, 2008.

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.

Exhibit Index

Exhibit
Number		Description
99.1		Park-Ohio Holdings Corp. Press Release, dated March 11, 2008

EXHIBIT 99.1

FOR IMMEDIATE RELEASE		CONTACT:		EDWARD F. CRAWFORD
				PARK-OHIO HOLDINGS CORP.
				(440) 947-2000

Park-Ohio Pre-Tax Earnings Up in 2007

     CLEVELAND, OHIO, March 11, 2008 — Park-Ohio Holdings Corp. (NASDAQ:PKOH) today announced results for its fourth quarter and year ended December 31, 2007.

FULL YEAR RESULTS

     Park-Ohio reported net sales of $1,071.4 million for 2007, a 1% increase compared to net sales of $1,056.2 million for 2006. Park-Ohio reported net income of $21.2 million, or $1.82 per share dilutive, for 2007, compared to $24.2 million, or $2.11 per share dilutive, for 2006. Net income in 2006 was increased by the reversal of $5.0 million of the Company’s deferred tax asset valuation allowance. Net sales, net income and EPS in 2007 were adversely impacted by $18.0 million, $2.6 million and $.23 per share dilutive, respectively, due to reduced percentage of completion on long-lead industrial equipment contracts, resulting from changes in computation methodology.

FOURTH QUARTER RESULTS

     Park-Ohio reported net sales of $247.8 million for fourth quarter 2007, an 8% decrease compared to sales of $270.4 million for fourth quarter 2006. Park-Ohio reported net income of $3.9 million, or $.34 per share dilutive, for fourth quarter 2007, compared to net income of $10.8 million, or $.94 per share dilutive, for fourth quarter 2006. Net income in fourth quarter 2006 was increased by the reversal of $5.0 million of the Company’s deferred tax asset valuation allowance. Net sales, net income and EPS in fourth quarter 2007 were adversely impacted by $18.0 million, $2.6 million and $.23 per share dilutive, respectively, due to reduced percentage of completion on long-lead industrial equipment contracts, resulting from changes in computation methodology.

     Edward F. Crawford, Chairman and Chief Executive Officer, stated, “We are pleased to have achieved double-digit growth in pre-tax earnings; although we are disappointed to have reported earnings below our expected profitability for 2007. This was caused by a change identified in the recent audit process, which altered the way we calculate percentage of completion in the rapidly growing industrial equipment businesses of our Manufactured Products segment. This change does not affect the underlying revenue or profitability of the business, but does delay recognition of revenue and earnings closer to shipment of long-lead industrial equipment when we outsource segments of the manufacturing process. These orders can take anywhere from a few months to as long as 20 months to produce.

     We believe that our prior methodology more accurately depicted the operational performance of the business, but have followed our outside auditor’s guidance on this matter. This shifted revenue and earnings from late 2007 into future periods. We are working hard to minimize the long-term impact of this recent change, and we expect to recapture this deferral.

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     From an operations and cash perspective, 2007 was an excellent year for our industrial equipment businesses, and we expect them to grow in 2008. Going forward, this change will make Manufactured Products segment revenues and earnings lumpier and harder to forecast accurately by quarter.

     We believe Park-Ohio is well positioned with its diversity and global markets, despite concerns over uncertainty in pockets of the US economy, raw material prices, and the timing of large industrial equipment orders. Accordingly, we expect to generate diluted earnings per share of $2.10 to $2.25 in 2008.”

Table 1: Recent History of EPS, EBIT and Revenue

		Year ended December 31,
		2004		2005		2006		2007
Dilutive EPS, GAAP, as reported		$1.27		$2.70		$2.11		$1.82
Dilutive EPS, fully taxed(A)		$1.07		$1.58		$1.62		$1.82
Operating Income (EBIT) — [$ in millions]		$49.0		$53.5		$58.7		$62.7
Revenue		$808.7		$932.9		$1.056		$1.072
		(million)		(million)		(billion)		(billion)

(Note A) Reconciliation to GAAP
(In Millions, except EPS)

		Year ended
		December 31,
		2004				2005				2006				2007
Net Income (Loss), GAAP, as reported:		$	14.2			$	30.8			$	24.2			$	21.2
Less: Reversal of Tax Valuation Allowance(1)							(7.3	)			(5.0	)
Plus: Add’l Income Tax to 32% Rate before Reversal(2)			(2.2	)			(5.5	)			(0.6	)
Net Income, fully-taxed		$	12.0			$	18.0			$	18.6			$	21.2
Number of Dilutive Shares (millions)			11.2				11.4				11.46				11.65
Dilutive EPS, fully-taxed		$	1.07			$	1.58			$	1.62			$	1.82

The Company presents fully-taxed net income and EPS reflecting equalized tax rates to facilitate comparison between periods.

(1)

Net income in fourth quarter 2006 and 2005 included the reversal of $5.0 million and $7.3 million, respectively, of the Company’s deferred tax asset valuation allowance, substantially eliminating this allowance. Based on strong recent and projected earnings, the Company has determined that it is more likely than not that this deferred tax asset will be realized. The tax valuation allowance reversal resulted in an increase to net income for the fourth quarter of each year.

(2)

In 2006, following the reversal of a portion of its deferred tax valuation allowance, the Company began recording a quarterly provision for federal income taxes. For 2007, the Company’s effective income tax rate was 32%, compared to 30%, 11% and 19% for 2006, 2005 and 2004, respectively, excluding the tax valuation allowance reversal. Park-Ohio’s net operating loss carry-forward precluded the payment of most cash federal income taxes in 2006 and 2007, and should similarly preclude such payments in 2008 and substantially reduce them in 2009.

     A conference call reviewing Park-Ohio’s fourth quarter results will be broadcast live over the Internet on Wednesday, March 12, commencing at 9:00 am Eastern Time. Simply log on to http://www.pkoh.com.

-more-

     Park-Ohio is a leading provider of supply management services and a manufacturer of highly engineered products. Headquartered in Cleveland, Ohio, the Company operates 24 manufacturing sites and 51 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.

     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.

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CONSOLIDATED CONDENSED STATEMENTS OF INCOME (UNAUDITED)
PARK-OHIO HOLDINGS CORP. AND SUBSIDIARIES
(In Thousands, Except per Share Data)

		Three Months Ended								Year Ended
		December 31,								December 31,
		2007				2006				2007				2006
Net sales		$	247,815			$	270,405			$	1,071,441			$	1,056,246
Cost of products sold			211,924				233,056				912,337				908,095
Gross profit			35,891				37,349				159,104				148,151
Selling, general and administrative expenses			24,142				23,925				98,679				90,296
Restructuring and impairment items			0				(809	)			0				(809	)
Gain on sale of assets held for sale			0				0				(2,299	)			0
Operating income			11,749				14,233				62,724				58,664
Interest expense			7,265				8,097				31,551				31,267
Income before income taxes			4,484				6,136				31,173				27,397
Income taxes			568				(4,649	)			9,976				3,218
Net income		$	3,916			$	10,785			$	21,197			$	24,179
Amounts per common share:
Basic		$	0.35			$	0.98			$	1.91			$	2.20
Diluted		$	0.34			$	0.94			$	1.82			$	2.11
Common shares used in the computation:
Basic			11,184				11,029				11,106				10,997
Diluted			11,679				11,491				11,651				11,461
Other financial data:
EBITDA, as defined		$	16,871			$	20,701			$	83,049			$	80,057

Note A—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								Year Ended
		December 31,								December 31,
		2007				2006				2007				2006
Net income		$	3,916			$	10,785			$	21,197			$	24,179
Add back:
Income taxes			568				(4,649	)			9,976				3,218
Interest expense			7,265				8,097				31,551				31,267
Depreciation and amortization			4,687				5,940				20,469				20,037
Restructuring and other unusual items			0				(9	)			0				(9	)
Gain on the sale of assets held for sale			0				0				(2,299	)			0
Miscellaneous			435				537				2,155				1,365
EBITDA, as defined		$	16,871			$	20,701			$	83,049			$	80,057

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

		December 31,				December 31,
		2007				2006
		(Unaudited)				(Audited)
		(In Thousands)
ASSETS
Current Assets
Cash and cash equivalents		$	14,512			$	21,637
Accounts receivable, net			172,357				181,893
Inventories			215,409				223,936
Deferred tax assets			21,897				34,142
Unbilled contract revenue			24,817				16,886
Other current assets			15,232				7,332
Total Current Assets			464,224				485,826
Property, Plant and Equipment			266,222				248,065
Less accumulated depreciation			160,665				146,980
Total Property Plant and Equipment			105,557				101,085
Other Assets
Goodwill			100,997				98,180
Net assets held for sale			3,330				6,568
Other			95,081				92,092
Total Other Assets			199,408				196,840
Total Assets		$	769,189			$	783,751
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current Liabilities
Trade accounts payable		$	121,875			$	132,864
Accrued expenses			67,007				78,264
Current portion of long-term liabilities			4,403				5,873
Total Current Liabilities			193,285				217,001
Long-Term Liabilities, less current portion
8.375% Senior Subordinated Notes due 2014			210,000				210,000
Revolving credit maturing on December 31, 2010			145,400				156,700
Other long-term debt			2,287				4,790
Deferred tax liability			22,722				32,089
Other postretirement benefits and other long-term liabilities			24,017				24,434
Total Long-Term Liabilities			404,426				428,013
Shareholders’ Equity			171,478				138,737
Total Liabilities and Shareholders’ Equity		$	769,189			$	783,751

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

		Three Months Ended December 31,								Year Ended December 31,
		2007				2006				2007				2006
NET SALES
Supply Technologies		$	127,461			$	148,598			$	531,417			$	598,228
Aluminum Products			37,280				33,750				169,118				154,639
Manufactured Products			83,074				88,057				370,906				303,379
		$	247,815			$	270,405			$	1,071,441			$	1,056,246
INCOME BEFORE INCOME TAXES
Supply Technologies		$	6,755			$	8,934			$	27,175			$	38,383
Aluminum Products			(265	)			(397	)			3,020				3,921
Manufactured Products			10,506				9,049				45,798				28,991
			16,996				17,586				75,993				71,295
Corporate and Other Costs			(5,247	)			(3,353	)			(13,269	)			(12,631	)
Interest Expense			(7,265	)			(8,097	)			(31,551	)			(31,267	)
		$	4,484			$	6,136			$	31,173			$	27,397