ParkOhio Announces Increased Revenues and Earnings in the Fourth Quarter and Record Annual Results

ParkOhio (NASDAQ: PKOH) today announced results for its fourth quarter and year ended December 31, 2014.

FOURTH QUARTER RESULTS

Net sales were $373.0 million for the fourth quarter of 2014, an increase of $63.6 million, or 21%, from net sales of $309.4 million for the fourth quarter of 2013.

ParkOhio reported net income attributable to ParkOhio common shareholders of $10.7 million, or $0.86 per diluted share, for the fourth quarter of 2014. This compared to net income attributable to ParkOhio common shareholders of $8.9 million, or $0.72 per diluted share, for the fourth quarter of 2013. Earnings from continuing operations attributable to ParkOhio common shareholders, which excludes the impact of the loss from discontinued operations in 2013, increased 16% to $0.86 per diluted share in the fourth quarter of 2014 from $0.74 per diluted share in the fourth quarter of 2013. As adjusted earnings increased 6% in the fourth quarter of 2014 to $0.90 per diluted share compared to $0.85 per diluted share in the fourth quarter of 2013. Please refer to the table that follows for a reconciliation of earnings from continuing operations to as adjusted earnings.

In addition, EBITDA, as defined was $31.7 million during the fourth quarter of 2014 and increased 17% compared to EBITDA, as defined of $27.0 million during the fourth quarter of 2013.

FULL YEAR 2014 RESULTS

Net sales were a company record $1,378.7 million for 2014, an increase of $175.5 million, or 15%, from net sales of $1,203.2 million in 2013. ParkOhio reported a company record net income attributable to ParkOhio common shareholders of $45.6 million, or $3.68 per diluted share, for 2014. This compares to net income attributable to ParkOhio common shareholders of $43.4 million, or $3.56 per diluted share, for 2013, which included the impact of the net gain of $3.0 million, or $0.25 per diluted share, from discontinued operations, net of taxes. Earnings from continuing operations attributable to ParkOhio common shareholders, which excludes the impact of the gain from discontinued operations, increased 11% to $3.68 per diluted share in 2014 compared to $3.31 per diluted share in 2013. As adjusted earnings increased 5% in 2014 to $3.84 per diluted share compared to $3.66 per diluted share in 2013. Please refer to the table that follows for a reconciliation of earnings from continuing operations to as adjusted earnings.

In addition, EBITDA, as defined was $128.3 million for 2014 and increased 11% compared to EBITDA, as defined of $115.8 million for 2013.

2015 OUTLOOK

We currently forecast our consolidated 2015 revenues to increase approximately 14% over 2014 revenues. We forecast our earnings from continuing operations attributable to ParkOhio common shareholders to be in the range of $4.30 to $4.70 per diluted share. We forecast as adjusted earnings to be in the range of $4.32 to $4.72 per diluted share. In addition, we are forecasting EBITDA, as defined to be in the range of $145.0 million to $152.5 million for the year ended December 31, 2015. EBITDA, as defined reflects earnings before interest expense and income taxes, and excludes depreciation, amortization, certain non-cash charges and corporate-level expenses as defined in the Company’s Revolving Credit Agreement.

Edward F. Crawford, Chairman and Chief Executive Officer stated, “We continue to execute our previously announced N5 plan through organic growth and strategic acquisitions.”

A conference call reviewing ParkOhio’s fourth quarter results will be broadcast live over the Internet on Monday, March 16, 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 45 manufacturing sites and 55 supply chain logistics facilities.

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 being 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, which could be lower due to the effects of the recent financial crises; 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 the “Item 1A. Risk Factors” included in the Company’s annual report on Form 10-K for the year ended December 31, 2013 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.

PARKOHIO AND SUBSIDIARIES
SUPPLEMENTAL NON-GAAP FINANCIAL MEASURES (UNAUDITED)

As adjusted earnings is a measure of earnings that excludes significant non-cash credits and charges and significant and infrequent contingency expenses. As adjusted earnings reflects net income from continuing operations after: the exclusion of net income attributable to noncontrolling interest and before the inclusion of acquisition-related costs in cost of sales and selling, general and administrative ("SG&A") expenses; currency exchange losses (gains) related to non-permanent intercompany loans; litigation judgments and settlement costs; and gain on acquisition of business. The 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 SG&A expenses relate to contingent consideration expenses related to certain acquisitions. As 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 as adjusted earnings because management uses as adjusted earnings to measure performance. As adjusted earnings herein may not be comparable to other similarly titled measures of other companies. The following table reconciles net income from continuing operations to as adjusted earnings:

PARKOHIO AND SUBSIDIARIES
SUPPLEMENTAL NON-GAAP FINANCIAL MEASURES (UNAUDITED)

EBITDA, as defined reflects net income attributable to ParkOhio common shareholders before interest expense, 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 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:

PARKOHIO AND SUBSIDIARIES
SUPPLEMENTAL NON-GAAP FINANCIAL MEASURES (UNAUDITED)

As adjusted earnings is a measure of earnings that excludes significant non-cash credits and charges and significant and infrequent contingency expenses. As adjusted earnings reflects net income from continuing operations after: the exclusion of net income attributable to noncontrolling interest and before the inclusion of acquisition-related costs in cost of sales and in SG&A expenses and currency exchange losses related to non-permanent intercompany loans in SG&A expenses. The 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 SG&A expenses relate to contingent consideration expenses related to certain acquisitions. As adjusted earnings are not a measure of performance under 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 as adjusted earnings because management uses as adjusted earnings to measure performance. As adjusted earnings herein may not be comparable to other similarly titled measures of other companies. The following table reconciles net income from continuing operations to as adjusted earnings: