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ParkOhio Announces 2009 Results

CLEVELAND, March 8 /PRNewswire-FirstCall/ -- Park-Ohio Holdings Corp. (Nasdaq: PKOH) today announced results for its fourth quarter and year ended December 31, 2009.

FOURTH QUARTER RESULTS

Net sales were $187.8 million for fourth quarter 2009, a reduction of 25% from net sales of $249.6 million for fourth quarter 2008. ParkOhio reported net income of $.2 million, or $.02 per share, in the fourth quarter of 2009, compared to a net loss of $119.9 million, or ($10.96) per share dilutive, for fourth quarter 2008. Included in the 2009 results were impairment and restructuring charges totaling $7.0 million ( $.36 per share dilutive) and a gain on the purchase of Park-Ohio Industries, Inc. 8.375% senior subordinated notes due in 2014 of $1.2 million ( $.06 per share). Included in the 2008 results were impairment and restructuring charges totaling $108.6 million ( $8.49 per share dilutive), a deferred tax valuation reserve of $32.7 million ( $2.99 per share dilutive) and a gain on the purchase of Park-Ohio Industries, Inc. 8.375% senior subordinated notes due in 2014 of $6.2 million ( $.36 per share).  Net income, as adjusted (A), for the fourth quarter of 2009 and 2008 was $2.0 million ( $.17 per share dilutive) and $1.7 million ( $.16 per share dilutive), respectively.  

FULL YEAR RESULTS

Net sales were $701.0 million for 2009, a reduction of 34% from net sales of $1.069 billion for the same period of 2008. ParkOhio reported a net loss of $5.2 million, or ($.47) per share, for the year ended December 31, 2009, compared to a net loss of $119.8 million or ($10.88) per share, in 2008.  Included in the 2009 results were impairment and restructuring charges totaling $7.0 million ( $.41 per share dilutive), a gain on the purchase of Park-Ohio Industries, Inc. 8.375% senior subordinated notes due in 2014 of $6.3 million ( $.37 per share) and a charge to reserve for an account receivable from a customer in bankruptcy of $4.2 million ( $.25 per share dilutive). Included in the 2008 results were impairment and restructuring charges totaling $126.6 million ( $9.46 per share dilutive), a deferred tax valuation reserve of $32.7 million ( $2.97 per share dilutive) and a gain on the purchase of Park-Ohio Industries, Inc. 8.375% senior subordinated notes due in 2014 of $6.2 million or ( $.36 per share).  Net loss as adjusted (A) for 2009 was ($.7) million, ($.06) per share compared to net income as adjusted (A) for 2008 of $13.7 million, or $1.19 per share dilutive.  

The Company also announced today that it has amended its existing credit facility.  The amendment was effective March 8, 2010 and along with other changes, extends the term of the facility to June 30, 2013.

Edward F. Crawford, Chairman and Chief Executive Officer, stated, "The amendment and restatement of the credit facility will continue to provide the Company the flexibility to execute its strategy and take advantage of growth opportunities in its businesses.  We would like to thank our lending institutions for their continued support and specifically, JPMorgan Chase Bank for its ongoing leadership."

    
    
    (A) Reconciliation to GAAP: 
                                      Quarter ended         Year ended 
                                       December 31,        December 31,
                                      2009      2008      2009      2008
                                    --------  --------  --------  --------
    Net (loss) income, as reported       $.2   ($119.9)    ($5.2)  ($119.8)
    Income taxes, as reported           (2.7)     20.2       (.8)     21.0
                                    --------  --------  --------  --------
    Income (loss) before income 
     taxes, as reported                ($2.5)   ($99.7)    ($6.0)   ($98.8)
    Restructuring and impairment 
     charges (1) (2)                     7.0     108.6       7.0     126.6
    Gains (3)                           (1.2)     (6.2)     (6.3)     (6.2)
    Reserve for a customer in 
     bankruptcy (4)                        0         0       4.2         0
    Income taxes, as adjusted           (1.3)     (1.0)       .4      (7.9)
                                    --------  --------  --------  --------
    Net (loss) income, as adjusted      $2.0      $1.7      ($.7)    $13.7
                                    --------  --------  --------  --------
    
    (1) During the fourth quarter of 2009, the Company recorded $7.0 million
        of asset impairment charges associated with general weakness in the 
        economy including the railroad industry ($3.0 million in the 
        Manufactured Products segment and $4.0 million in the Supply 
        Technologies segment).  The charges were composed of $1.8 million of 
        inventory impairment included in Cost of Products Sold and $5.2 
        million for impairment of property and equipment.  During the fourth 
        quarter of 2008, ParkOhio recorded a non-cash goodwill impairment 
        charge of $95.8 million and restructuring and asset impairment charges
        of $13.4 associated with the decision to exit its relationship with 
        its largest customer along with the general economic downturn. The 
        charges were composed of $5.0 million of inventory impairment included
        in Cost of Products Sold and $8.4 million for impairment of property 
        and equipment and loss on disposal of a foreign subsidiary and 
        severance costs. Impairment charges of $.6 million recorded in the 
        Aluminum Products segment in the third quarter of 2008 were reversed 
        in the fourth quarter of 2008.
    
    (2) During the third quarter of 2008, the Company recorded $18.1 million 
        of restructuring and asset   impairment charges associated with the 
        weakness and volatility in the automotive markets, ($13.8 million in 
        the Aluminum Products segment and $4.3 million in the Manufactured 
        Products segment). Inventory impairment charges of $.6 million were 
        included in Cost of Products Sold and $17.5 million were included
        in Restructuring and impairment charges.
                                    
    (3) In 2009, Park-Ohio Holdings Corp. 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.  In the fourth 
        quarter of 2008, Park-Ohio Holdings Corp. recorded a gain of $6.2 
        million on the purchase of $11.0 million of Park-Ohio Industries, Inc. 
        8.375% senior subordinated notes due 2014. The notes were not 
        contributed to Park-Ohio Industries, Inc. but were held by Park-Ohio 
        Holdings Corp. at December 31, 2008 and subsequently sold to a foreign 
        subsidiary of Park-Ohio Industries, Inc. in the fourth quarter of 
        2009.
    
    (4) In the first nine months of 2009, the Company recorded a charge of 
        $4.2 million to fully reserve for an account receivable from a 
        customer in bankruptcy. 
    
    (5) The Company presents adjusted net income excluding impairment charges
        and gains to facilitate comparison between periods.    

A conference call reviewing ParkOhio's fourth quarter results will be broadcast live over the Internet on Tuesday,  March 9, 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 28 manufacturing sites and 40 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.  

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