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ParkOhio Announces Record Second Quarter 2018 Results

August 8, 2018

CLEVELAND, OHIO--(BUSINESS WIRE)--Aug 8, 2018--Park-Ohio Holdings Corp. (NASDAQ: PKOH) today announced its results for the second quarter of 2018.

SECOND QUARTER RESULTS

Net sales were a record $432.2 million in the second quarter of 2018, an increase of 23% from net sales of $350.9 million in the second quarter of 2017, driven by organic growth of 13%. The Company reported net income attributable to ParkOhio common shareholders of $14.8 million, or $1.18 per diluted share, in the second quarter of 2018, compared to $3.0 million, or $0.24 per diluted share, in the second quarter of 2017. On an adjusted basis, net income attributable to ParkOhio common shareholders was $1.08 per diluted share in the second quarter of 2018 compared to $0.87 per diluted share in the 2017 period, an increase of 24%. Please refer to the table that follows for a reconciliation of net income to adjusted earnings.

Matthew V. Crawford, Chairman and Chief Executive Officer, stated, “We are pleased to announce our second quarter earnings, which achieved a number of sales and profitability records. While these achievements are meaningful, we continue to be focused on the recent investments across our businesses, which are in line with our growth strategy. I would like to thank all of our associates, who have worked very hard to meet our customer expectations during this period of rapid expansion.”

EBITDA was $41.1 million in the second quarter of 2018, an increase of 21% from $34.0 million in the second quarter of 2017. Please refer to the table that follows for a reconciliation of net income to EBITDA. At June 30, 2018, the Company had $88.4 million of cash and cash equivalents on hand.

YEAR-TO-DATE RESULTS

Net sales were a record $837.9 million in the first six months of 2018, an increase of 21% from net sales of $694.7 million in the first six months of 2017, driven by organic growth of 11%. The Company reported net income attributable to ParkOhio common shareholders of $24.6 million, or $1.96 per diluted share, in the first six months of 2018, compared to $12.8 million, or $1.03 per diluted share, in the 2017 period. On an adjusted basis, net income attributable to ParkOhio common shareholders was $2.00 per diluted share in the first six months of 2018 compared to $1.54 per diluted share in the 2017 period, an increase of 30%. EBITDA was $76.5 million in the first six months of 2018, an increase of 16% from $65.9 million in the first six months of 2017. Please refer to the tables that follow for reconciliations of net income to adjusted earnings and net income to EBITDA.

CONFERENCE CALL

A conference call reviewing ParkOhio’s second quarter 2018 results will be broadcast live over the Internet on Thursday, August 9, commencing at 10:00 am Eastern Time. Simply log on to http://www.pkoh.com.

ParkOhio is a diversified international company providing world-class customers with a supply chain management outsourcing service, capital equipment used on their production lines, and manufactured components used to assemble their products. Headquartered in Cleveland, Ohio, ParkOhio operates more than 125 manufacturing sites and supply chain logistics facilities worldwide, through three reportable segments: Supply Technologies, Assembly Components and Engineered Products.

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 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 those related to the current global uncertainties and crises, such as tariffs and surcharges; 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 or import and export controls and other trade barriers; 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 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; our ability to negotiate contracts with labor unions; our dependence on key management; our dependence on information systems; our ability to continue to pay cash dividends, and the other factors we describe under “Item 1A. Risk Factors” included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2017. 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.

Park-Ohio Holdings Corp. and Subsidiaries Supplemental Non-GAAP Financial Measures (Unaudited)

Adjusted earnings is a non-GAAP financial measure that the Company is providing in this press release. Adjusted earnings is net income calculated in accordance with generally accepted accounting principles (“GAAP”), adjusted for special items. The Company presents this non-GAAP financial measure because management uses adjusted earnings to compare its operating performance on a consistent basis over multiple periods because they remove the impact of certain significant non-cash credits or charges and certain infrequent items impacting net income. Adjusted earnings is not a measure of performance under GAAP and should not be considered in isolation from, or as a substitute for, net income calculated in accordance with GAAP. Adjusted earnings herein may not be comparable to similarly titled measures of other companies. The following table reconciles net income to adjusted earnings:

Park-Ohio Holdings Corp. and Subsidiaries Supplemental Non-GAAP Financial Measures (Unaudited)

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