Good morning, and welcome to the Second Quarter 2012 Results Conference Call. At this time all participants are in a listen-only mode. After the presentation the company will conduct a question-and-answer session. Today’s conference is also being recorded. If you have any objections you may disconnect at this time. Before the conference call begins, please remember that the company will be discussing some issues that are historical and some issues that are forward-looking. When the company speaks about future results or events, there are a variety of factors that may materially change their actual results from those projected. A list of relevant factors that may be found in the earnings press release as well as in the company’s 2011 10-K filed with the SEC on March 15, 2012. The company undertakes no obligations to update any forward-looking statements whether a result of new information, future events or otherwise. Additionally, the company may discuss EBITDA. EBITDA is not a measure of performance under Generally Accepted Accounting Principles and is considered a non-GAAP financial measure as defined by the SEC. The Company may present EBITDA because management believes that EBITDA could be useful to investors as an indication of their ability to incur and service debts and because EBITDA is a measure used under their credit facility to determine whether they have incurred additional debt under such facility. For reconciliation from income before income taxes to EBITDA, please refer to the company’s recent earnings release, which can be found on the company’s website under the investors tab. Now the meeting will be turned over to Edward F. Crawford, Chairman and Chief Executive Officer. Mr. Crawford, you may begin.

Good morning, ladies and gentlemen. Welcome to Park-Ohio’s Second Quarter 2012 conference call. Joining me this morning is Mathew Crawford, who is President and COO of the company and Scott Emerick, the Chief Financial Officer. We will begin with Mathew’s review of the operations for the quarter and year-to-date.

Thank you and good morning everyone. Thank you for joining us today. Our core operating performance was solid in the second quarter, during which we saw most end markets meet or exceed demand expectations. Integration of our March acquisition of Fluid Routing Solutions or FRS for short has been smooth and is achieving expectations. Highlights of the second quarter financial performance were highlighted by 25% increase in revenues and earnings of $0.37 per diluted share. This result compared favorably to $0.10 loss per diluted share in the prior year. The 2012 results were unfavorably impacted by $13 million or $0.69 per diluted share of unusual pre-tax litigation settlement costs. I will discuss these costs in more detail a little later. EBITDA as defined totaled $18 million for the second quarter of 2012 and also included the impact of $13 million pre-tax litigation settlement cost. This compares to EBITDA as defined in the second quarter of 2011 of $21 million. Looking again at the financial results with a little more specificity, net sales for the second quarter were $308.8 million, which was an increase of 25% over the prior, up $246.8 million. Acquisitions accounted for most of the increase in net sales. The remainder of the net sales increase is attributable to a strong performance in the supply technology segment and the engineered product segment. On a sequential basis, second quarter net sales increased 17%, was substantially increase attributable to acquisition activity. Gross profit of $56 million increased $10.8 million compared to the prior year’s gross profit of $45.2 million, also due largely to acquisition activity. The gross margin percentage is 18.1% in the second quarter, which is comparable to the 18.3% in the second quarter of last year. This change is largely due to changes in the sales mix including FRS. Selling, or SG&A expenses, were $29.6 million for the quarter compared to $28.8 million for the prior year. We continue to obtain operating leverage on our SG&A expenses at these costs as the percentage of net sales declined from 11.7% in 2011 to 9.6% in 2012. Although we continue to watch our spending very carefully, we are making investments to support our ongoing controlled assets. In the second quarter, we settled a significant legal matter for the sum of $13 million. The case involved a dispute with a former customer over the design and installation of a melting furnace. The melting furnace was designed and built at a cost of approximately $35 million. Just prior to the completion and final acceptance, there was a failure rendering the furnace completely inoperable and unusable. We believe this was the result of misuse by the customer. The customer commenced binding arbitration proceedings and sought $37 million in damages. Before the start of the arbitration and after a complete evaluation of the evidence, coupled with the unique set of facts and circumstances, the venue of the proceedings and more importantly the uncertain outcome we chose to settle the dispute. While we are involved generally in routine customer and commercial disputes, we believe this dispute was unique and unprecedented both in the amount of the settlement and the facts and circumstances surrounding the client. Interest rate decreased by $400,000 from $6.9 million in 2011 to $6.5 million in 2012. Although average borrowings were higher in the second quarter of 2012 due to the acquisition of FRS, the lower average borrowing rate of our debt contributed to the decrease in interest expense. Turning to taxes, income was taxed in an effective rate of 34.5% for the quarter. As a reminder, we reversed the final portion of our valuation reserves against our NOLs in the fourth quarter of last year. So we will be recognizing a more normal tax provision for book purposes in 2012. We estimate that we will utilize our remaining NOLs in the second half of 2012. Accordingly, we estimate the cash taxes will be $7.8 million for the year with $4.2 million being paid in the second half. Now the segment results. But before getting into the numbers themselves let me update you on how we have reorganized our segments. Subsequent to the acquisition of FRS in March 2012, during the second quarter and as a result of the acquisition the company realigned its segments in order to better align its businesses for the underlying markets and customers that the company serves. In doing so we combined aluminum products, rubber products, previously included in the Manufactured Product segment, Dello screw products, previously included in the Supply Technology segment along with FRS to form the Assembly Component segment. The former Manufactured Product segment will now be referred to as Engineered Products. The results of operations of FRS from the date of the acquisition through June 30 are included in the Assembly Component segment. The business segment results for the prior year have been reclassified to reflect these changes. Now, looking at the Supply Technology segment, revenues increased 6% compared with the second quarter of 2011 to a $131 million. Supply Technology has experienced strong sales increases in its truck and power sports markets and continue to show excellent penetration into the lawn and garden and electrical markets as well. Our international growth initiative to support our customers on a global basis continue successfully. New business bookings during the second quarter were approximately $10 million on an annualized basis. Segment operating income grew 19% to $9.7 million. Segment operating income margin grew 70 basis points to 7.3%. We continue to experience good product and customer mix and we remain committed to expense management. There are some seasonal impacts to this segment though and we have noticed on an isolated basis customer concerns over near term demand. So while we expect a solid 2012 performance, we believe the second half performance will be challenged to meet or exceed the first half results. Next I will discuss the Engineered Product segment. Net sales increased 4% compared with second quarter of 2011 to $86 million. The increase in net sales was driven by strong performance in the forge division highlighted by continued strong demand in the rail industry. The industrial equipment group continues to show strong and consistent top line performance buoyed by the strong North American equipment and after market demand. Segment operating income grew 19% to $14.3 million. Segment operating income margin grew 200 basis points to 16.6%. Segment operating income set another multi-year high, breaking the high set in the first quarter. As the segment benefitted from significant operational leverage as well as efficiency improvements in our forge division as a result of recent capital investments. While we experienced an excellent first half of 2012 we believe the fundamentals are in place for continued momentum to the remainder of 2012. Now, let’s move into a discussion of the Assembly Component segment. Net sales increased 125% compared with the second quarter of 2011 to $91 million. The FRS acquisition contributed to the significant increase in net sales. Rubber products also showed substantial improvement and aluminum continues to work hard to launch significant new business. Segment operating income grew to $7.3 million. Segment operating income margin grew to 7.9%. While the addition of FRS was the significant contributor to this increase, we are also pleased with the improvement at the rubber products group. Aluminum products remains on track for improved performance. Specifically as it relates to FRS, we have begun execution of our integration plan and believe we expand upon their success for both Park-Ohio synergies and FRS strategic initiatives. Next I would like to take a moment to discuss operating cash flows. Operating cash flows were in $19.1 million for the first half, which compares to $11.6 during 2011. Improved earnings in an improved working capital position contributed to the increase in operating cash flows. We expect to improve operating cash flow versus the first half during the balance of 2012. Capital expenditures were $4 million for the quarter, assuming significant growth opportunities, particularly in our aluminum products group. We anticipate our full year capital spending to be more closely - up to more closely approximately $23 million, with $16 million to be spent in the second half of the year. I would now like to update our net sales and earnings outlook for 2012. We currently forecast our consolidated 2012 net sales to be in the range of $1.165 billion to $1.175 billion. We are also updating our earnings per diluted share forecast to be in the range of $2.60 to $2.70 per diluted share. This updated earnings forecast includes the unusual $13 million pre-tax settlement charge in the second quarter of $0.69 per diluted share. In addition, we are forecasting EBITDA as defined to be approximately $96 million for the year end December 31 2012, which also included settlement charge as an expense in driving EBITDA as defined. Thank you and now back to you.

Thank you, Mathew. At this time I would like to proceed to the Q&A portion of the meeting.

[Operator Instructions] Your first question comes from the line of Ajay Kejriwal with FBR Capital Markets.

So a very nice performance, underlying performance in the quarter and if we exclude the litigation charge you are basically increasing your EPS guidance by about $0.19, $0.20. So I guess the question is what’s driving that change versus your previous guide? I know first half is tracking a little bit better but any color by business would be helpful.

Well I would begin by saying that we tried, particularly early in the year, to be a little bit more conservative. So as we continue to execute our plan to the extent we are successful, there is some opportunity there that is inherent. But I would also say that we have seen - as I mentioned in my comments almost every end markets to be pretty strong. Have we been surprised per se? No, but certainly the acquisition of FRS has exceeded - I wouldn’t say it’s met our expectations that’s it on plan. And we have dealt a little conservatism in there. Clearly our manufactured product groups and the underlying forge and equipment businesses have seen very robust after-market activity which is a high margin for us. So certainly supply technology has seen across the board pretty strong demand in the first quarter. So I wouldn’t say it’s a new theme. I would say that we have seen you know mostly positive news incrementally compared to plan in almost every part of the business. And I think that with limited, other than of course the settlement cost, with the limited negative surprises. So it’s really a Broadway story as opposed to a surprise in any single business.

Ajay, the only one - the aluminum business that we have been long awaiting is really beginning to launch. So I think that that’s helped us, quite frankly we are just a little bit ahead of that curve, but all these orders we have written continue to write are helping a little bit. But again this is a very balanced performance by all the units. This is not - there is not one outstanding region for that. It’s just lot of hard work and our customer base as you know is very diversified, but a long touch points. So it seems to be working very well and our diversification is really helping us continue to grow at what we consider again a pace that’s acceptable.

And then Ed on the aluminum business it sounds like you are little bit ahead. May be if you can remind us on what the revenue expectations are as these platforms ramp into next year?

Well we again don’t get specific information. We are as indicated in the last conference call and we have been signaling now for close to a year that we have written over $90 million worth of new business that would be coming at us in the middle, the late part of - the latter part of this year which we think the third, fourth quarter and quite frankly we have been fortunate enough to ride additional new block of business. It’s close to $10 million. So it’s pretty much on schedule, but it has been a long time waiting for the aluminum business to really gain the momentum that we expected, but we are up and shipping. All the orders are beginning to flow through the P&L as we speak and this will be particularly active hopefully in a very, very strong way for the next four to five years.

Good. And one more from me and I will pass it along. One Supply Tech you had a very nice margin quarter, but revenues declined a little bit sequentially and typically second quarter has been an improvement for you. So is that just foreign exchange or is there something else going on. And I know Mathew said something about second half being a little bit challenging. Any more color there would be helpful. Thank you.

You know I was looking at the supply technologies revenue. This is Scott Emerick, recently joined Park-Ohio as their CFO. Really I would describe the first and second quarter as pretty comfortable. I was within about $1.2 million in total revenues. So very consistent performance really overall in that segment and its strength is in the first half of the year. So as Matt referenced to do some seasonality issues you will see some drop offs in revenues in supply tech in the second half, yes just very strong operating performance still for that segment.

Ajay, I would also comment that while your comment is traditionally true this is an average daily sales business. So you know really depending on how average daily sales fallen any given period clearly most often the second quarter has the most, but we haven’t looked specifically at the shake out. I would echo Scott's comments. I view the first and second quarter from a business activity and demand as very comparable.

Your next question comes from the line of John Baum, [ph] private investor.

Let's see, a couple of cats and dogs here. I don’t want to throw salt on the wound here but on the litigation cost, did you collect any cash when you were building that or is this like a complete cash loss? Was there any salvage value? Just trying to get a little color on what the overall burden was for that.

John, this is Matt. No, we collected - I mentioned in my comments that the order was for $35 million. We collected substantially all of that a couple of years ago. So, I think all but a couple of million bucks of it. So, about $33 million. No, we are paying them back essentially out of what they had already paid us. There is some salvage value, probably not material to the overall settlement cost or value of the contract but - and the equipment is in a remote location. So I would temper any expectations you have on salvage value.

John, just a little more color on it. Actually this contract was written with a company in South Africa and it called for binding arbitration in South Africa in case that there was an issue. Keep in mind this is pretty much standard equipment. So we are quite surprised that this jumped out at us. But most important aspect to this thing, the company was sold while we were in the process of moving equipment in there to a Russian steel company. So that complicated a lot of the issues here relative to the urgency and the importance of getting this behind us. So it got very complicated and quite frankly I'm very pleased with our ability to settle this and go on and actually we ended up with a good relationship with the company. So it’s not a lot of sour grapes.

Excellent. Let's see, moving on to more pleasant things here. On the aluminum products Eddie, I know this is your baby, is the 2013 aluminum products launch still going as per plan, a little slower? What do you see looking out next year, another year after that would be with the segment?

Well the launch is on its way. We think we are - as a company and as stakeholders, it’s been a painful development. But we are clearly in the right place at the right time. There is a reduction in the number of suppliers and there is a tremendous interest and need for all these companies to increase aluminum content in the vehicles to reduce weight. If you talk about it full time, the average prices are maybe just a little ahead with their intention here. But the cars are going to be lighter. It’s going to call for more aluminum, and quite frankly I think I can see in the future where we have to be a little bit careful right now before writing additional orders at certain plants. A couple of our plants are completely filled. So we now are down to asking and looking for business that fits the plants that are underutilized. So we are right where we should be and we continue to write orders and - so we think ’13, ’14, ’15 should be great years and again we aim everything at 11, 12 million cars. We don’t aim it at 17 million anymore. So we are pleased with our position now and I think you can continue to see that division improve.

Excellent. Couple of housekeeping - second half, sorry, go ahead. Second half CapEx, I see that’s going to be higher. Is this building for new business or it is higher than maintenance? Are you ramping up in a couple of segments with CapEx there?

Well, the large amount of that CapEx are what - increase in the CapEx is we’ve decided - as you know for many years we have been basically a aluminum casting company and do not move to the - what I call hedge the machining aspects of it, and the lesson with that one company Metaldyne where they were the machine there and they were the prime to our customer, we have decided to go around that. So we are adding machine capabilities in certain of our plants so we will be able to at this point be the prime and do the machining in-house, which quite frankly will increase the profitability of the business and that requires standard CNC turning material. We have been in the machine business for long time, but we have taken two platforms of size that we are installing equipment. So it will be done all in house totally integrated, and we are not shipping it to some of the machine and then shipping it to customer. So it eliminates the freight, it’s more efficient. It’s basically the concept is we have talked about taking it, ink it, and turning it completely into a finished product and ship it to the customer. So that’s where largely all the CapEx is in, expanding into the machining business rather than going outside, and quite frankly combination of freight and the fact of we can do it inside very effectively at a lower cost than we would to go for outside machining. So we like it and it’s a standard equipment, it’s not that complicated, it’s got long lives, so it’s not a unique piece of capital investment. It’s a standard CNC machine centre which have applications for a very, very long time.

[Operator Instructions] Your next question comes from the line of Jay Harris of Goldsmith & Harris.

I wonder if you could give us some profile of what you expect to happen in capital spending beyond this year? What do you consider - is this just a surge that we are seeing to add machining capability to aluminum? If so what would a more normalized level of capital spending be for the company, and when do we get there?

I would - you know it has been traditional to see that maintenance CapEx when we really tighten the reins on the business and invest it only in maintenance and what I would consider very high return projects has been in the high single digits, call it $10 million. One of the reasons for that, Jay, is the Supply Technology business and the industrial equipment group which is the larger portion of manufactured products, those are not very capital intensive businesses and those are a very significant percentage of our overall revenue. So, it shouldn’t be surprising that that number is achievable even with some growth or efficiency capital. Given the investment we are making as was just discussed in the machining part and the expansion of our capabilities of general aluminum, it’s reasonable to believe that our maintenance and high return CapEx numbers, our disciplined CapEx numbers has probably reached now into the young teens. So while we don’t have an official estimate for that I’d be willing to say that a more closely monitored, non-aggressive expansionary CapEx number would be, call it $13 million.

I’ve watched the stock price over the last period of time. It seems to be very, very sensitive to fears of recession or the economy turning down. Could you give us some color as to any areas that you are serving which have weakened over the last six months? Have you booked any new customers for supply? Just add some general color to that issue.

Jay, this is Matt again. Well, I did mention in my comments that we had on annualized rate new booking in supply technologies during the second quarter in excess of $10 million. So, we do have new account activity there and has had some success. Looking more broadly at our business performance and what we are seeing in the second half, I think we are seeing pretty stable demand along most end markets. Having said that I do feel as though there are - and I think I mentioned as well in my comments discreet and isolated incidences where certain businesses appear to be softening a little bit. Now, is that because of fundamental weakness? Maybe, maybe not. I think what we are really seeing is a more traditional shut down season in August particularly in some of the heavy industrial markets, automotive and Class A truck would be great examples of that. So, particularly in the supply technology segment which is an average daily sales business is a production plant daily sales business is likely to see less shift days in the second half. So, I would characterize it at high levels, things there will be a relatively stable, but there are discreet examples of some softening that may be more about seasonality than fundamentals, but certainly that is something that we need to watch carefully.

There are no further questions at this time. I would like to return the call back over to Mr. Crawford.

I’d like to thank all the stakeholders in the company for helping us achieve the results for the second quarter and we look forward to speaking with you again at the end of the third quarter and best of luck. Thank you very much.

This concludes today’s conference call. You may now disconnect.