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UNITED STATES


SECURITIES AND EXCHANGE COMMISSION


Washington, D.C. 20549


FORM 10-Q


|           |  |                                                                                             
|---------- |  | --------------------------------------------------------------------------------------------
|(Mark One) |  |                                                                                             
|þ          |  | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934 
|           |  | For the quarterly period ended June 30, 2006                                                
|or        
|          
|o          |  | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934
|           |  | For the transition period
    from          to                                              

Commission file number 333-43005


Park-Ohio Industries, Inc.


(Exact name of registrant as specified in its charter)


|                                                                             |  |                                         
|---------------------------------------------------------------------------- |  | ----------------------------------------
|Ohio                                                                         |  | 34-6520107                              
|(State or other jurisdiction of
    incorporation or organization)           |  | (I.R.S. Employer
    Identification No.)
|                                                                            
|23000 Euclid Avenue, Cleveland, Ohio(Address of principal executive offices) |  | 44117(Zip Code)                         

216/692-7200


(Registrants telephone number, including area code)


Pursuant to a corporate reorganization effective June 15,
1998, Park-Ohio Industries, Inc.


became a wholly-owned subsidiary of Park-Ohio Holdings
Corp.








|    |                                                                                                                                                                                                                                            
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Has filed all reports required to be filed by Section 13 or
    15(d) of the Securities Exchange Act of 1934 during the
    preceding 12 months (or for such shorter period that the
    registrant was required to file such reports), and
|   
|(2) | Has been subject to such filing requirements for the past
    90 days.                                                                                                                                                                     

þ o


12b-2


o o þ


12b-2


o þ














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##### 










PARK-OHIO INDUSTRIES, INC. AND SUBSIDIARIES


INDEX


|                                  |  |                                                                                                      |    |      |    | 
|--------------------------------- |  | ---------------------------------------------------------------------------------------------------- | -- | ---- | -- | 
|                                  |  |                                                                                                      |    | Page |   
|                                  |  |                                                                                                      |    |      |   
|PART I. FINANCIAL
    INFORMATION
|Item 1.                           |  | Financial Statements                                                                                 |    |      | 3  | 
|                                  |  | Consolidated balance sheets 
    June 30, 2006 and December 31, 2005                                |    |      | 3  | 
|                                  |  | Consolidated statements of
    income  Three months and six months ended
    June 30, 2006 and 2005 |    |      | 4  | 
|                                  |  | Consolidated statement of
    shareholders equity  Six months ended
    June 30, 2006              |    |      | 5  | 
|                                  |  | Consolidated statements of cash
    flows  Six months ended June 30, 2006 and
    2005              |    |      | 6  | 
|                                  |  | Notes to consolidated financial
    statements  June 30, 2006                                       |    |      | 7  | 
|                                  |  | Report of Independent Registered Public
    Accounting Firm                                          |    |      | 19 | 
|Item 2.                           |  | Managements Discussion and Analysis
    of Financial Condition and Results of Operations            |    |      | 20 | 
|Item 3.                           |  | Quantitative and Qualitative Disclosures
    About Market Risk                                       |    |      | 25 | 
|Item 4.                           |  | Controls and Procedures                                                                              |    |      | 25 | 
|                                 
|PART II. OTHER INFORMATION       
|Item 1.                           |  | Legal Proceedings                                                                                    |    |      | 26 | 
|Item 1A.                          |  | Risk Factors                                                                                         |    |      | 27 | 
|Item 6.                           |  | Exhibits                                                                                             |    |      | 27 | 
|SIGNATURE                         |  |                                                                                                      | 28 |     
|EXHIBIT INDEX                     |  |                                                                                                      | 29 |     
|Exhibit 31.1                     
|Exhibit 31.2                     
|Exhibit 32                       



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PART I. Financial Information







|        |                     
|------- | --------------------
|ITEM 1. | Financial Statements

PARK-OHIO INDUSTRIES, INC. AND SUBSIDIARIES





CONSOLIDATED BALANCE SHEETS


|                                                                                          |                                                                                                                           |                           |         |         |              |   |         |         |         | 
|----------------------------------------------------------------------------------------- | ------------------------------------------------------------------------------------------------------------------------- | ------------------------- | ------- | ------- | ------------ | - | ------- | ------- | ------- | 
|                                                                                          |                                                                                                                           | (Unaudited)               |         |         |             
|                                                                                          |                                                                                                                           | June 30,                  |         |         | December 31, |  
|                                                                                          |                                                                                                                           | 2006                      |         |         | 2005         |  
|                                                                                          |                                                                                                                           |                           |         |         |              |  
|                                                                                          |                                                                                                                           | (Dollars in thousands)    |        
|ASSETS                                                                                    |                                                                                                                           |                           |         |         |              |   |         |        
|Current Assets                                                                            |                                                                                                                           |                           |         |         |              |   |         |        
|                                                                                          | Cash and cash equivalents                                                                                                 |                           | $       | 16,201  |              |   | $       | 17,868  |        
|                                                                                          | Accounts receivable, less allowances for doubtful accounts of
    $3,889 at June 30, 2006 and $5,120 at December 31, 2005 |                           |         | 187,869 |              |   |         | 153,502 |        
|                                                                                          | Inventories                                                                                                               |                           |         | 227,536 |              |   |         | 190,553 |        
|                                                                                          | Deferred tax assets                                                                                                       |                           |         | 8,627   |              |   |         | 8,627   |        
|                                                                                          | Other current assets                                                                                                      |                           |         | 17,624  |              |   |         | 27,753  |        
|                                                                                          |                                                                                                                           |                           |         |         |              |  
|                                                                                          |                                                                                                                           | Total Current Assets      |         |         | 457,857      |   |         |         | 398,303 | 
|Property, Plant and Equipment                                                             |                                                                                                                           |                           | 249,025 |         |              |   | 243,367 |        
|                                                                                          | Less accumulated depreciation                                                                                             |                           |         | 139,994 |              |   |         | 130,265 |        
|                                                                                          |                                                                                                                           |                           |         |         |              |  
|                                                                                          |                                                                                                                           |                           | 109,031 |         |              |   | 113,102 |        
|Other Assets                                                                              |                                                                                                                           |                           |         |         |              |   |         |        
|                                                                                          | Goodwill                                                                                                                  |                           |         | 85,418  |              |   |         | 82,703  |        
|                                                                                          | Net assets held for sale                                                                                                  |                           |         | 5,186   |              |   |         | -0-     |        
|                                                                                          | Other                                                                                                                     |                           |         | 70,147  |              |   |         | 70,617  |        
|                                                                                          |                                                                                                                           |                           |         |         |              |  
|                                                                                          |                                                                                                                           | $                         | 727,639 |         |              | $ | 664,725 |        
|                                                                                          |                                                                                                                           |                           |         |         |              |  
|                                                                                         
|LIABILITIES AND SHAREHOLDERS EQUITY                                                      |                                                                                                                           |                           |         |         |              |   |         |        
|Current Liabilities                                                                       |                                                                                                                           |                           |         |         |              |   |         |        
|                                                                                          | Trade accounts payable                                                                                                    |                           | $       | 135,161 |              |   | $       | 115,396 |        
|                                                                                          | Accrued expenses                                                                                                          |                           |         | 66,932  |              |   |         | 65,184  |        
|                                                                                          | Current portion of long-term liabilities                                                                                  |                           |         | 5,557   |              |   |         | 4,161   |        
|                                                                                          |                                                                                                                           |                           |         |         |              |  
|                                                                                          |                                                                                                                           | Total Current Liabilities |         |         | 207,650      |   |         |         | 184,741 | 
|Long-Term Liabilities, less current portion
    8.375% Senior Subordinated Notes due 2014 |                                                                                                                           |                           | 210,000 |         |              |   | 210,000 |        
|                                                                                          | Revolving credit                                                                                                          |                           |         | 157,400 |              |   |         | 128,300 |        
|                                                                                          | Other long-term debt                                                                                                      |                           |         | 6,116   |              |   |         | 6,705   |        
|                                                                                          | Deferred tax liability                                                                                                    |                           |         | 3,176   |              |   |         | 3,176   |        
|                                                                                          | Other postretirement benefits and other long-term liabilities                                                             |                           |         | 24,967  |              |   |         | 26,174  |        
|                                                                                          |                                                                                                                           |                           |         |         |              |  
|                                                                                          |                                                                                                                           |                           | 401,659 |         |              |   | 374,355 |        
|Shareholders Equity                                                                      |                                                                                                                           |                           |         |         |              |   |         |        
|                                                                                          | Common Stock, par value $1 a share                                                                                        |                           |         | -0-     |              |   |         | -0-     |        
|                                                                                          | Additional paid-in capital                                                                                                |                           |         | 64,844  |              |   |         | 64,844  |        
|                                                                                          | Retained earnings                                                                                                         |                           |         | 53,005  |              |   |         | 42,887  |        
|                                                                                          | Accumulated other comprehensive income (loss)                                                                             |                           |         | 481     |              |   |         | (2,102  | )      
|                                                                                          |                                                                                                                           |                           |         |         |              |  
|                                                                                          |                                                                                                                           |                           | 118,330 |         |              |   | 105,629 |        
|                                                                                          |                                                                                                                           |                           |         |         |              |  
|                                                                                          |                                                                                                                           | $                         | 727,639 |         |              | $ | 664,725 |        
|                                                                                          |                                                                                                                           |                           |         |         |              |  



|      |                                                                                                                                                                                                                                                                              
|----- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Note: | The balance sheet at December 31, 2005 has been derived
    from the audited financial statements at that date, but does not
    include all of the information and footnotes required by
    generally accepted accounting principles for complete financial
    statements.



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PARK-OHIO INDUSTRIES, INC. AND SUBSIDIARIES





CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)


|                                             |                            |                        |         |        |                  |   |         |        |  |   |         |        |  |   |         |        | 
|-------------------------------------------- | -------------------------- | ---------------------- | ------- | ------ | ---------------- | - | ------- | ------ |  | - | ------- | ------ |  | - | ------- | ------ | 
|                                             |                            | Three Months Ended     |         |        | Six Months Ended |  
|                                             |                            | June 30,               |         |        | June 30,         |  
|                                             |                            |                        |         |        |                  |  
|                                             |                            | 2006                   |         |        | 2005             |   |         | 2006   |  |   | 2005    |       
|                                             |                            |                        |         |        |                  |   |         |        |  |   |         |       
|                                             |                            | (Amounts in thousands) |        
|Net sales                                    |                            | $                      | 268,453 |        |                  | $ | 228,795 |        |  | $ | 528,674 |        |  | $ | 457,678 |       
|Cost of products sold                        |                            |                        | 230,738 |        |                  |   | 193,429 |        |  |   | 454,072 |        |  |   | 387,216 |       
|                                             |                            |                        |         |        |                  |   |         |        |  |   |         |       
|                                             | Gross profit               |                        |         | 37,715 |                  |   |         | 35,366 |  |   |         | 74,602 |  |   |         | 70,462 | 
|Selling, general and administrative expenses |                            |                        | 21,953  |        |                  |   | 20,264  |        |  |   | 43,406  |        |  |   | 41,823  |       
|                                             |                            |                        |         |        |                  |   |         |        |  |   |         |       
|                                             | Operating income           |                        |         | 15,762 |                  |   |         | 15,102 |  |   |         | 31,196 |  |   |         | 28,639 | 
|Interest expense                             |                            |                        | 7,735   |        |                  |   | 6,715   |        |  |   | 15,105  |        |  |   | 13,174  |       
|                                             |                            |                        |         |        |                  |   |         |        |  |   |         |       
|                                             | Income before income taxes |                        |         | 8,027  |                  |   |         | 8,387  |  |   |         | 16,091 |  |   |         | 15,465 | 
|Income taxes                                 |                            |                        | 2,900   |        |                  |   | 710     |        |  |   | 5,973   |        |  |   | 1,509   |       
|                                             |                            |                        |         |        |                  |   |         |        |  |   |         |       
|                                             | Net income                 |                        | $       | 5,127  |                  |   | $       | 7,677  |  |   | $       | 10,118 |  |   | $       | 13,956 | 
|                                             |                            |                        |         |        |                  |   |         |        |  |   |         |       



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PARK-OHIO INDUSTRIES, INC. AND SUBSIDIARIES





CONSOLIDATED STATEMENT OF SHAREHOLDERS EQUITY
(UNAUDITED)


|                           |                                         |                        |     |            |         |   |        |             |               |   |        |        |  |       |        |       |  |   |         |        | 
|-------------------------- | --------------------------------------- | ---------------------- | --- | ---------- | ------- | - | ------ | ----------- | ------------- | - | ------ | ------ |  | ----- | ------ | ----- |  | - | ------- | ------ | 
|                           |                                         |                        |     |            |         |   |        | Accumulated |               |   |       
|                           |                                         |                        |     |            |         |   |        | Other       |               |   |       
|                           |                                         |                        |     | Additional |         |   |        |             | Comprehensive |   |        |       
|                           |                                         | Common                 |     |            | Paid-In |   |        | Retained    |               |   | Income |        |  |      
|                           |                                         | Stock                  |     |            | Capital |   |        | Earnings    |               |   | (Loss) |        |  | Total |       
|                           |                                         |                        |     |            |         |   |        |             |               |   |        |        |  |       |       
|                           |                                         | (Dollars in thousands) |    
|Balance at January 1, 2006 |                                         | $                      | -0- |            |         | $ | 64,844 |             |               | $ | 42,887 |        |  | $     | (2,102 | )     |  | $ | 105,629 |       
|Comprehensive income:      |                                         |                        |     |            |         |   |        |             |               |   |        |        |  |       |        |       |  |   |         |       
|                           | Net income                              |                        |     |            |         |   |        |             |               |   |        | 10,118 |  |       |        |       |  |   |         | 10,118 | 
|                           | Foreign currency translation adjustment |                        |     |            |         |   |        |             |               |   |        |        |  |       |        | 2,583 |  |   |         | 2,583  | 
|                           |                                         |                        |     |            |         |   |        |             |               |   |        |        |  |       |       
|                           | Comprehensive income                    |                        |     |            |         |   |        |             |               |   |        |        |  |       |        |       |  |   |         | 12,701 | 
|                           |                                         |                        |     |            |         |   |        |             |               |   |        |        |  |       |       
|Balance at June 30, 2006   |                                         | $                      | -0- |            |         | $ | 64,844 |             |               | $ | 53,005 |        |  | $     | 481    |       |  | $ | 118,330 |       
|                           |                                         |                        |     |            |         |   |        |             |               |   |        |        |  |       |       



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PARK-OHIO INDUSTRIES, INC. AND SUBSIDIARIES





CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)


|                                                 |                                                                                   |                                           |                                       |        |         |         |        |        |         |         |  
|------------------------------------------------ | --------------------------------------------------------------------------------- | ----------------------------------------- | ------------------------------------- | ------ | ------- | ------- | ------ | ------ | ------- | ------- | -
|                                                 |                                                                                   | Six Months Ended                          |                                      
|                                                 |                                                                                   | June 30,                                  |                                      
|                                                 |                                                                                   |                                           |                                      
|                                                 |                                                                                   | 2006                                      |                                       |        | 2005    |        
|                                                 |                                                                                   |                                           |                                       |        |         |        
|                                                 |                                                                                   | (Dollars in thousands)                    |                                      
|OPERATING ACTIVITIES                             |                                                                                   |                                           |                                       |        |         |         |        |       
|                                                 | Net income                                                                        |                                           | $                                     | 10,118 |         |         | $      | 13,956 |        
|                                                 | Adjustments to reconcile net income to net cash used by
    operating activities: |                                           |                                       |        |         |         |        |        |        
|                                                 |                                                                                   | Depreciation and amortization             |                                       |        | 9,827   |         |        |        | 8,876   |        
|                                                 | Changes in operating assets and liabilities:                                      |                                           |                                       |        |         |         |        |        |        
|                                                 |                                                                                   | Accounts receivable                       |                                       |        | (33,655 | )       |        |        | (9,181  | )      
|                                                 |                                                                                   | Inventories and other current assets      |                                       |        | (26,232 | )       |        |        | (13,068 | )      
|                                                 |                                                                                   | Accounts payable and accrued expenses     |                                       |        | 20,605  |         |        |        | (14,147 | )      
|                                                 |                                                                                   | Other                                     |                                       |        | (1,495  | )       |        |        | (3,090  | )      
|                                                 |                                                                                   |                                           |                                       |        |         |        
|                                                 |                                                                                   |                                           | Net Cash Used by Operating Activities |        |         | (20,832 | )      |        |         | (16,654 | )
|INVESTING ACTIVITIES                             |                                                                                   |                                           |                                       |        |         |         |        |       
|                                                 | Purchases of property, plant and equipment, net                                   |                                           |                                       | (7,523 | )       |         |        | (7,665 | )      
|                                                 | Acquisitions, net of cash acquired                                                |                                           |                                       | (3,219 | )       |         |        | -0-    |        
|                                                 | Proceeds from sale of assets held for sale                                        |                                           |                                       | -0-    |         |         |        | 1,100  |        
|                                                 |                                                                                   |                                           |                                       |        |         |        
|                                                 |                                                                                   | Net Cash Used by Investing Activities     |                                       |        | (10,742 | )       |        |        | (6,565  | )      
|FINANCING ACTIVITIES                             |                                                                                   |                                           |                                       |        |         |         |        |       
|                                                 | Proceeds from debt, net                                                           |                                           |                                       | 29,907 |         |         |        | 17,476 |        
|                                                 |                                                                                   |                                           |                                       |        |         |        
|                                                 |                                                                                   | Net Cash Provided by Financing Activities |                                       |        | 29,907  |         |        |        | 17,476  |        
|                                                 |                                                                                   |                                           |                                       |        |         |        
|Decrease in Cash and Cash Equivalents            |                                                                                   |                                           | (1,667                                | )      |         |         | (5,743 | )     
|Cash and Cash Equivalents at Beginning of Period |                                                                                   |                                           | 17,868                                |        |         |         | 6,407  |       
|                                                 |                                                                                   |                                           |                                       |        |         |        
|Cash and Cash Equivalents at End of Period       |                                                                                   | $                                         | 16,201                                |        |         | $       | 664    |       
|                                                 |                                                                                   |                                           |                                       |        |         |        
|Taxes paid                                       |                                                                                   | $                                         | 3,022                                 |        |         | $       | 1,334  |       
|Interest paid                                    |                                                                                   |                                           | 13,897                                |        |         |         | 11,328 |       



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PARK-OHIO INDUSTRIES, INC. AND SUBSIDIARIES





NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)


June 30, 2006


(Amounts in Thousands)


NOTE A  Basis of Presentation




10-Q S-X. 10-K


NOTE B  Recent Accounting Pronouncements






NOTE C  Acquisitions


S-X.




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PARK-OHIO INDUSTRIES, INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)  (Continued)


S-X.


|                                           |                     |   |       |        |  
|------------------------------------------ | ------------------- | - | ----- | ------ | -
|Cash acquisition price, less cash acquired |                     | $ | 4,698 |       
|Assets                                     |                     |   |       |       
|                                           | Accounts receivable |   |       | (2,640 | )
|                                           | Inventories         |   |       | (954   | )
|                                           | Prepaid expenses    |   |       | (97    | )
|                                           | Equipment           |   |       | (871   | )
|                                           | Other assets        |   |       | (545   | )
|Liabilities                                |                     |   |       |       
|                                           | Accrued expenses    |   |       | 409    |  
|                                           |                     |   |      
|Goodwill                                   |                     | $ | -0-   |       
|                                           |                     |   |      

S-X.


|                       |                     |   |       |         |  
|---------------------- | ------------------- | - | ----- | ------- | -
|Cash acquisition price |                     | $ | 7,000 |        
|Assets                 |                     |   |       |        
|                       | Accounts receivable |   |       | (10,835 | )
|                       | Inventories         |   |       | (10,909 | )
|                       | Prepaid expenses    |   |       | (1,201  | )
|                       | Equipment           |   |       | (407    | )
|Liabilities            |                     |   |       |        
|                       | Accounts payable    |   |       | 12,783  |  
|                       | Accrued expenses    |   |       | 2,270   |  
|                       | Note payable        |   |       | 1,299   |  
|                       |                     |   |      
|Goodwill               |                     | $ | -0-   |        
|                       |                     |   |      



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PARK-OHIO INDUSTRIES, INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)  (Continued)




|                               |  |               |      |   |            |   |       |       |  |   |        |  
|------------------------------ |  | ------------- | ---- | - | ---------- | - | ----- | ----- |  | - | ------ | -
|                               |  | Severance and |      |   | Exit and   |   |       |      
|                               |  | Personnel     |      |   | Relocation |   |       | Total | 
|                               |  |               |      |   |            |   |       |       | 
|Balance at June 30, 2005       |  | $             | -0-  |   |            | $ | -0-   |       |  | $ | -0-    |  
|Add: Accruals                  |  |               | 250  |   |            |   | 1,750 |       |  |   | 2,000  |  
|Less: Payments                 |  |               | (551 | ) |            |   | (594  | )     |  |   | (1,145 | )
|Transfers                      |  |               | 400  |   |            |   | (400  | )     |  |   | -0-    |  
|                               |  |               |      |   |            |   |       |       | 
|Balance at December 31, 2005   |  | $             | 99   |   |            | $ | 756   |       |  | $ | 855    |  
|Less: Payments and Adjustments |  |               | (43  | ) |            |   | (356  | )     |  |   | (399   | )
|Transfers                      |  |               | (56  | ) |            |   | 56    |       |  |   | -0-    |  
|                               |  |               |      |   |            |   |       |       | 
|Balance at June 30, 2006       |  | $             | -0-  |   |            | $ | 456   |       |  | $ | 456    |  
|                               |  |               |      |   |            |   |       |       | 

NOTE D  Inventories




|                           |  |          |         |  |              |   |         | 
|-------------------------- |  | -------- | ------- |  | ------------ | - | ------- | 
|                           |  | June 30, |         |  | December 31, |  
|                           |  | 2006     |         |  | 2005         |  
|                           |  |          |         |  |              |  
|Finished goods             |  | $        | 154,981 |  |              | $ | 128,465 | 
|Work in process            |  |          | 40,730  |  |              |   | 32,547  | 
|Raw materials and supplies |  |          | 31,825  |  |              |   | 29,541  | 
|                           |  |          |         |  |              |  
|                           |  | $        | 227,536 |  |              | $ | 190,553 | 
|                           |  |          |         |  |              |  

NOTE E  Pension Plans and Other Postretirement
Benefits




|                                     |  |                  |        |   |                         |   |        |              |  |   |            |   |  |      |        |   |      |   |     |      |  |   |      |   |  |   |     |   |  |   |     |  
|------------------------------------ |  | ---------------- | ------ | - | ----------------------- | - | ------ | ------------ |  | - | ---------- | - |  | ---- | ------ | - | ---- | - | --- | ---- |  | - | ---- | - |  | - | --- | - |  | - | --- | -
|                                     |  | Pension Benefits |        |   | Postretirement Benefits |  
|                                     |  |                  |        |   |                         |  
|                                     |  | Three Months     |        |   | Six Months              |   |        | Three Months |  |   | Six Months |  
|                                     |  | Ended            |        |   | Ended                   |   |        | Ended        |  |   | Ended      |  
|                                     |  | June 30,         |        |   | June 30,                |   |        | June 30,     |  |   | June 30,   |  
|                                     |  |                  |        |   |                         |   |        |              |  |   |            |  
|                                     |  | 2006             |        |   | 2005                    |   |        | 2006         |  |   | 2005       |   |  | 2006 |        |   | 2005 |   |     | 2006 |  |   | 2005 |  
|                                     |  |                  |        |   |                         |   |        |              |  |   |            |   |  |      |        |   |      |   |     |      |  |   |      |  
|Service costs                        |  | $                | 87     |   |                         | $ | 97     |              |  | $ | 174        |   |  | $    | 194    |   |      | $ | 50  |      |  | $ | 35   |   |  | $ | 100 |   |  | $ | 70  |  
|Interest costs                       |  |                  | 726    |   |                         |   | 796    |              |  |   | 1,452      |   |  |      | 1,592  |   |      |   | 323 |      |  |   | 348  |   |  |   | 646 |   |  |   | 696 |  
|Expected return on plan assets       |  |                  | (2,078 | ) |                         |   | (2,211 | )            |  |   | (4,156     | ) |  |      | (4,422 | ) |      |   | -0- |      |  |   | -0-  |   |  |   | -0- |   |  |   | -0- |  
|Transition obligation                |  |                  | (12    | ) |                         |   | (12    | )            |  |   | (24        | ) |  |      | (24    | ) |      |   | -0- |      |  |   | -0-  |   |  |   | -0- |   |  |   | -0- |  
|Amortization of prior service cost   |  |                  | 39     |   |                         |   | 41     |              |  |   | 78         |   |  |      | 82     |   |      |   | (16 | )    |  |   | (17  | ) |  |   | (32 | ) |  |   | (34 | )
|Recognized net actuarial (gain) loss |  |                  | 81     |   |                         |   | (60    | )            |  |   | 162        |   |  |      | (120   | ) |      |   | 94  |      |  |   | 50   |   |  |   | 188 |   |  |   | 100 |  
|                                     |  |                  |        |   |                         |   |        |              |  |   |            |   |  |      |        |   |      |   |     |      |  |   |      |  
|Benefit (income) costs               |  | $                | (1,157 | ) |                         | $ | (1,349 | )            |  | $ | (2,314     | ) |  | $    | (2,698 | ) |      | $ | 451 |      |  | $ | 416  |   |  | $ | 902 |   |  | $ | 832 |  
|                                     |  |                  |        |   |                         |   |        |              |  |   |            |   |  |      |        |   |      |   |     |      |  |   |      |  

NOTE F  Segments




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PARK-OHIO INDUSTRIES, INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)  (Continued)






|                            |                       |                    |         |         |                  |   |         |         |  |   |         |         |  |   |         |         | 
|--------------------------- | --------------------- | ------------------ | ------- | ------- | ---------------- | - | ------- | ------- |  | - | ------- | ------- |  | - | ------- | ------- | 
|                            |                       | Three Months Ended |         |         | Six Months Ended |  
|                            |                       | June 30,           |         |         | June 30,         |  
|                            |                       |                    |         |         |                  |  
|                            |                       | 2006               |         |         | 2005             |   |         | 2006    |  |   | 2005    |        
|                            |                       |                    |         |         |                  |   |         |         |  |   |         |        
|Net sales:                  |                       |                    |         |         |                  |   |         |         |  |   |         |         |  |   |         |        
|                            | ILS                   |                    | $       | 150,338 |                  |   | $       | 129,515 |  |   | $       | 300,497 |  |   | $       | 256,402 | 
|                            | Aluminum products     |                    |         | 44,913  |                  |   |         | 43,094  |  |   |         | 87,615  |  |   |         | 85,984  | 
|                            | Manufactured products |                    |         | 73,202  |                  |   |         | 56,186  |  |   |         | 140,562 |  |   |         | 115,292 | 
|                            |                       |                    |         |         |                  |   |         |         |  |   |         |        
|                            |                       | $                  | 268,453 |         |                  | $ | 228,795 |         |  | $ | 528,674 |         |  | $ | 457,678 |        
|                            |                       |                    |         |         |                  |   |         |         |  |   |         |        
|Income before income taxes: |                       |                    |         |         |                  |   |         |         |  |   |         |         |  |   |         |        
|                            | ILS                   |                    | $       | 10,231  |                  |   | $       | 8,271   |  |   | $       | 20,653  |  |   | $       | 16,475  | 
|                            | Aluminum products     |                    |         | 2,396   |                  |   |         | 3,481   |  |   |         | 4,436   |  |   |         | 5,904   | 
|                            | Manufactured products |                    |         | 6,132   |                  |   |         | 5,949   |  |   |         | 11,794  |  |   |         | 11,762  | 
|                            |                       |                    |         |         |                  |   |         |         |  |   |         |        
|                            |                       |                    | 18,759  |         |                  |   | 17,701  |         |  |   | 36,883  |         |  |   | 34,141  |        
|Corporate costs             |                       |                    | (2,997  | )       |                  |   | (2,599  | )       |  |   | (5,687  | )       |  |   | (5,502  | )      
|Interest expense            |                       |                    | (7,735  | )       |                  |   | (6,715  | )       |  |   | (15,105 | )       |  |   | (13,174 | )      
|                            |                       |                    |         |         |                  |   |         |         |  |   |         |        
|                            |                       | $                  | 8,027   |         |                  | $ | 8,387   |         |  | $ | 16,091  |         |  | $ | 15,465  |        
|                            |                       |                    |         |         |                  |   |         |         |  |   |         |        

|                                     |                       |          |         |         |              |   |         |         | 
|------------------------------------ | --------------------- | -------- | ------- | ------- | ------------ | - | ------- | ------- | 
|                                     |                       | June 30, |         |         | December 31, |  
|                                     |                       | 2006     |         |         | 2005         |  
|                                     |                       |          |         |         |              |  
|Identifiable assets were as follows: |                       |          |         |         |              |   |         |        
|                                     | ILS                   |          | $       | 358,662 |              |   | $       | 323,176 | 
|                                     | Aluminum products     |          |         | 113,782 |              |   |         | 101,489 | 
|                                     | Manufactured products |          |         | 207,126 |              |   |         | 169,004 | 
|                                     | General corporate     |          |         | 48,069  |              |   |         | 71,056  | 
|                                     |                       |          |         |         |              |  
|                                     |                       | $        | 727,639 |         |              | $ | 664,725 |        
|                                     |                       |          |         |         |              |  

NOTE G  Comprehensive Income




|                             |  |                    |       |  |                  |   |        |      |  |   |        |  |  |   |        |  
|---------------------------- |  | ------------------ | ----- |  | ---------------- | - | ------ | ---- |  | - | ------ |  |  | - | ------ | -
|                             |  | Three Months Ended |       |  | Six Months Ended |  
|                             |  | June 30,           |       |  | June 30,         |  
|                             |  |                    |       |  |                  |  
|                             |  | 2006               |       |  | 2005             |   |        | 2006 |  |   | 2005   | 
|                             |  |                    |       |  |                  |   |        |      |  |   |        | 
|Net income                   |  | $                  | 5,127 |  |                  | $ | 7,677  |      |  | $ | 10,118 |  |  | $ | 13,956 |  
|Foreign currency translation |  |                    | 2,105 |  |                  |   | (1,018 | )    |  |   | 2,583  |  |  |   | (689   | )
|                             |  |                    |       |  |                  |   |        |      |  |   |        | 
|Total comprehensive income   |  | $                  | 7,232 |  |                  | $ | 6,659  |      |  | $ | 12,701 |  |  | $ | 13,267 |  
|                             |  |                    |       |  |                  |   |        |      |  |   |        | 

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PARK-OHIO INDUSTRIES, INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)  (Continued)




|                                        |  |          |        |   |              |   |        |  
|--------------------------------------- |  | -------- | ------ | - | ------------ | - | ------ | -
|                                        |  | June 30, |        |   | December 31, |  
|                                        |  | 2006     |        |   | 2005         |  
|                                        |  |          |        |   |              |  
|Foreign currency translation adjustment |  | $        | 5,839  |   |              | $ | 3,256  |  
|Minimum pension liability               |  |          | (5,358 | ) |              |   | (5,358 | )
|                                        |  |          |        |   |              |  
|                                        |  | $        | 481    |   |              | $ | (2,102 | )
|                                        |  |          |        |   |              |  

NOTE H  Restructuring Activities


10-K




|                             |  |   |      |  
|---------------------------- |  | - | ---- | -
|Balance at December 31, 2005 |  | $ | 596  |  
|Cash payments                |  |   | (179 | )
|                             |  |   |     
|Balance at June 30, 2006     |  | $ | 417  |  
|                             |  |   |     

NOTE I  Accrued Warranty Costs




|                           |                                              |   |       |        |  
|-------------------------- | -------------------------------------------- | - | ----- | ------ | -
|Balance at January 1, 2006 |                                              | $ | 3,566 |       
|                           | Claims paid during the year                  |   |       | (1,246 | )
|                           | Additional warranties issued during the year |   |       | 1,862  |  
|                           | Acquired warranty liabilities                |   |       | 164    |  
|                           |                                              |   |      
|Balance at June 30, 2006   |                                              | $ | 4,346 |       
|                           |                                              |   |      

NOTE J  Financing Arrangements




NOTE K  Income Taxes




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PARK-OHIO INDUSTRIES, INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)  (Continued)




NOTE L  Derivatives and Hedging






NOTE M  Supplemental Guarantor Information






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PARK-OHIO INDUSTRIES, INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)  (Continued)


PARK-OHIO INDUSTRIES, INC. AND SUBSIDIARIES


CONDENSED CONSOLIDATING BALANCE SHEET


June 30, 2006


|                                            |                                                               |                                            |         |           |              |   |               |              |           |                    |              |        |        |              |          |         |            |   |         |         |         | 
|------------------------------------------- | ------------------------------------------------------------- | ------------------------------------------ | ------- | --------- | ------------ | - | ------------- | ------------ | --------- | ------------------ | ------------ | ------ | ------ | ------------ | -------- | ------- | ---------- | - | ------- | ------- | ------- | 
|                                            |                                                               |                                            |         | Combined  |              |   | Combined      |              |           |                    |              |       
|                                            |                                                               |                                            |         | Guarantor |              |   | Non-Guarantor |              |           | Reclassifications/ |              |        |       
|                                            |                                                               | Parent                                     |         |           | Subsidiaries |   |               | Subsidiaries |           |                    | Eliminations |        |        | Consolidated |         
|                                            |                                                               |                                            |         |           |              |   |               |              |           |                    |              |        |        |              |         
|                                            |                                                               | (In thousands)                             |        
|ASSETS                                     
|Current assets:                             |                                                               |                                            |         |           |              |   |               |              |           |                    |              |        |        |              |          |         |            |   |         |        
|                                            | Cash and cash equivalents                                     |                                            | $       | (21,506   | )            |   | $             | 11,376       |           |                    | $            | 8,825  |        |              | $        | 17,506  |            |   | $       | 16,201  |        
|                                            | Accounts receivable, net                                      |                                            |         | (300      | )            |   |               | 161,168      |           |                    |              | 27,001 |        |              |          | -0-     |            |   |         | 187,869 |        
|                                            | Inventories                                                   |                                            |         | -0-       |              |   |               | 186,735      |           |                    |              | 40,801 |        |              |          | -0-     |            |   |         | 227,536 |        
|                                            | Other current assets                                          |                                            |         | 881       |              |   |               | 8,732        |           |                    |              | 1,837  |        |              |          | 6,174   |            |   |         | 17,624  |        
|                                            | Deferred tax assets                                           |                                            |         | -0-       |              |   |               | -0-          |           |                    |              | -0-    |        |              |          | 8,627   |            |   |         | 8,627   |        
|                                            |                                                               |                                            |         |           |              |   |               |              |           |                    |              |        |        |              |         
|                                            |                                                               | Total Current Assets                       |         |           | (20,925      | ) |               |              | 368,011   |                    |              |        | 78,464 |              |          |         | 32,307     |   |         |         | 457,857 | 
|Investment in subsidiaries                  |                                                               |                                            | 379,877 |           |              |   | 12,110        |              |           |                    | (12,110      | )      |        |              | (379,877 | )       |            |   | -0-     |        
|Inter-company advances                      |                                                               |                                            | 307,543 |           |              |   | 429,080       |              |           |                    | 3,490        |        |        |              | (740,113 | )       |            |   | -0-     |        
|Property, Plant and Equipment, net          |                                                               |                                            | 2,510   |           |              |   | 97,049        |              |           |                    | 12,610       |        |        |              | (3,138   | )       |            |   | 109,031 |        
|Other Assets:                               |                                                               |                                            |         |           |              |   |               |              |           |                    |              |        |        |              |          |         |            |   |         |        
|                                            | Goodwill                                                      |                                            |         | -0-       |              |   |               | 78,424       |           |                    |              | 6,994  |        |              |          | -0-     |            |   |         | 85,418  |        
|                                            | Net assets held for sale                                      |                                            |         | -0-       |              |   |               | -0-          |           |                    |              | -0-    |        |              |          | 5,186   |            |   |         | 5,186   |        
|                                            | Other                                                         |                                            |         | 34,178    |              |   |               | 37,335       |           |                    |              | 682    |        |              |          | (2,048  | )          |   |         | 70,147  |        
|                                            |                                                               |                                            |         |           |              |   |               |              |           |                    |              |        |        |              |         
|                                            |                                                               | Total Other Assets                         |         |           | 34,178       |   |               |              | 115,759   |                    |              |        | 7,676  |              |          |         | 3,138      |   |         |         | 160,751 | 
|                                            |                                                               |                                            |         |           |              |   |               |              |           |                    |              |        |        |              |         
|                                            |                                                               | Total Assets                               |         | $         | 703,183      |   |               | $            | 1,022,009 |                    |              | $      | 90,130 |              |          | $       | (1,087,683 | ) |         | $       | 727,639 | 
|                                            |                                                               |                                            |         |           |              |   |               |              |           |                    |              |        |        |              |         
|                                           
|LIABILITIES AND SHAREHOLDERS EQUITY       
|Current Liabilities:                        |                                                               |                                            |         |           |              |   |               |              |           |                    |              |        |        |              |          |         |            |   |         |        
|                                            | Trade accounts payable                                        |                                            | $       | 3,395     |              |   | $             | 103,638      |           |                    | $            | 12,775 |        |              | $        | 15,353  |            |   | $       | 135,161 |        
|                                            | Accrued expenses                                              |                                            |         | 5,791     |              |   |               | 36,768       |           |                    |              | 18,922 |        |              |          | 5,451   |            |   |         | 66,932  |        
|                                            | Current portion of long-term liabilities                      |                                            |         | -0-       |              |   |               | 1,035        |           |                    |              | 2,005  |        |              |          | 2,517   |            |   |         | 5,557   |        
|                                            |                                                               |                                            |         |           |              |   |               |              |           |                    |              |        |        |              |         
|                                            |                                                               | Total Current Liabilities                  |         |           | 9,186        |   |               |              | 141,441   |                    |              |        | 33,702 |              |          |         | 23,321     |   |         |         | 207,650 | 
|Long-Term Liabilities, less current portion |                                                               |                                            |         |           |              |   |               |              |           |                    |              |        |        |              |          |         |            |   |         |        
|                                            | 8.375% Senior Subordinated Notes due 2014                     |                                            |         | 210,000   |              |   |               | -0-          |           |                    |              | -0-    |        |              |          | -0-     |            |   |         | 210,000 |        
|                                            | Revolving credit maturing on December 31, 2010                |                                            |         | 157,400   |              |   |               | -0-          |           |                    |              | -0-    |        |              |          | -0-     |            |   |         | 157,400 |        
|                                            | Other long-term debt                                          |                                            |         | -0-       |              |   |               | 34,326       |           |                    |              | 2,758  |        |              |          | (30,968 | )          |   |         | 6,116   |        
|                                            | Deferred tax liability                                        |                                            |         | -0-       |              |   |               | -0-          |           |                    |              | -0-    |        |              |          | 3,176   |            |   |         | 3,176   |        
|                                            | Other postretirement benefits and other long-term liabilities |                                            |         | 3,435     |              |   |               | 21,520       |           |                    |              | 2,529  |        |              |          | (2,517  | )          |   |         | 24,967  |        
|                                            |                                                               |                                            |         |           |              |   |               |              |           |                    |              |        |        |              |         
|                                            |                                                               | Total Long-Term Liabilities                |         |           | 370,835      |   |               |              | 55,846    |                    |              |        | 5,287  |              |          |         | (30,309    | ) |         |         | 401,659 | 
|Inter-company advances                      |                                                               |                                            | 210,588 |           |              |   | 517,013       |              |           |                    | 14,653       |        |        |              | (742,254 | )       |            |   | -0-     |        
|Shareholders Equity                        |                                                               |                                            | 112,574 |           |              |   | 307,709       |              |           |                    | 36,488       |        |        |              | (338,441 | )       |            |   | 118,330 |        
|                                            |                                                               |                                            |         |           |              |   |               |              |           |                    |              |        |        |              |         
|                                            |                                                               | Total Liabilities and Shareholders Equity |         | $         | 703,183      |   |               | $            | 1,022,009 |                    |              | $      | 90,130 |              |          | $       | (1,087,683 | ) |         | $       | 727,639 | 
|                                            |                                                               |                                            |         |           |              |   |               |              |           |                    |              |        |        |              |         

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##### Table of Contents



PARK-OHIO INDUSTRIES, INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)  (Continued)


PARK-OHIO INDUSTRIES, INC. AND SUBSIDIARIES


CONDENSED CONSOLIDATING BALANCE SHEET


December 31, 2005


|                                            |                                                               |                                            |         |           |              |   |               |              |         |                    |              |        |        |              |          |         |            |   |         |         |         | 
|------------------------------------------- | ------------------------------------------------------------- | ------------------------------------------ | ------- | --------- | ------------ | - | ------------- | ------------ | ------- | ------------------ | ------------ | ------ | ------ | ------------ | -------- | ------- | ---------- | - | ------- | ------- | ------- | 
|                                            |                                                               |                                            |         | Combined  |              |   | Combined      |              |         |                    |              |       
|                                            |                                                               |                                            |         | Guarantor |              |   | Non-Guarantor |              |         | Reclassifications/ |              |        |       
|                                            |                                                               | Parent                                     |         |           | Subsidiaries |   |               | Subsidiaries |         |                    | Eliminations |        |        | Consolidated |         
|                                            |                                                               |                                            |         |           |              |   |               |              |         |                    |              |        |        |              |         
|                                            |                                                               | (In thousands)                             |        
|ASSETS                                     
|Current assets:                             |                                                               |                                            |         |           |              |   |               |              |         |                    |              |        |        |              |          |         |            |   |         |        
|                                            | Cash and cash equivalents                                     |                                            | $       | (11,036   | )            |   | $             | 626          |         |                    | $            | 11,899 |        |              | $        | 16,379  |            |   | $       | 17,868  |        
|                                            | Accounts receivable, net                                      |                                            |         | -0-       |              |   |               | 129,302      |         |                    |              | 24,200 |        |              |          | -0-     |            |   |         | 153,502 |        
|                                            | Inventories                                                   |                                            |         | -0-       |              |   |               | 160,775      |         |                    |              | 29,778 |        |              |          | -0-     |            |   |         | 190,553 |        
|                                            | Other current assets                                          |                                            |         | 464       |              |   |               | 20,029       |         |                    |              | 1,147  |        |              |          | 6,113   |            |   |         | 27,753  |        
|                                            | Deferred tax assets                                           |                                            |         | -0-       |              |   |               | -0-          |         |                    |              | -0-    |        |              |          | 8,627   |            |   |         | 8,627   |        
|                                            |                                                               |                                            |         |           |              |   |               |              |         |                    |              |        |        |              |         
|                                            |                                                               | Total Current Assets                       |         |           | (10,572      | ) |               |              | 310,732 |                    |              |        | 67,024 |              |          |         | 31,119     |   |         |         | 398,303 | 
|Investment in subsidiaries                  |                                                               |                                            | 290,802 |           |              |   | -0-           |              |         |                    | -0-          |        |        |              | (290,802 | )       |            |   | -0-     |        
|Inter-company advances                      |                                                               |                                            | 359,963 |           |              |   | 372,156       |              |         |                    | 8,208        |        |        |              | (740,327 | )       |            |   | -0-     |        
|Property, Plant and Equipment, net          |                                                               |                                            | 2,536   |           |              |   | 98,046        |              |         |                    | 12,520       |        |        |              | -0-      |         |            |   | 113,102 |        
|Other Assets:                               |                                                               |                                            |         |           |              |   |               |              |         |                    |              |        |        |              |          |         |            |   |         |        
|                                            | Goodwill                                                      |                                            |         | -0-       |              |   |               | 78,424       |         |                    |              | 4,279  |        |              |          | -0-     |            |   |         | 82,703  |        
|                                            | Other                                                         |                                            |         | 34,724    |              |   |               | 37,530       |         |                    |              | 686    |        |              |          | (2,323  | )          |   |         | 70,617  |        
|                                            |                                                               |                                            |         |           |              |   |               |              |         |                    |              |        |        |              |         
|                                            |                                                               | Total Other Assets                         |         |           | 34,724       |   |               |              | 115,954 |                    |              |        | 4,965  |              |          |         | (2,323     | ) |         |         | 153,320 | 
|                                            |                                                               |                                            |         |           |              |   |               |              |         |                    |              |        |        |              |         
|                                            |                                                               | Total Assets                               |         | $         | 677,453      |   |               | $            | 896,888 |                    |              | $      | 92,717 |              |          | $       | (1,002,333 | ) |         | $       | 664,725 | 
|                                            |                                                               |                                            |         |           |              |   |               |              |         |                    |              |        |        |              |         
|                                           
|LIABILITIES AND SHAREHOLDERS EQUITY       
|Current Liabilities:                        |                                                               |                                            |         |           |              |   |               |              |         |                    |              |        |        |              |          |         |            |   |         |        
|                                            | Trade accounts payable                                        |                                            | $       | 3,348     |              |   | $             | 87,666       |         |                    | $            | 9,778  |        |              | $        | 14,604  |            |   | $       | 115,396 |        
|                                            | Accrued expenses                                              |                                            |         | 1,643     |              |   |               | 43,718       |         |                    |              | 14,763 |        |              |          | 5,060   |            |   |         | 65,184  |        
|                                            | Current portion of long-term liabilities                      |                                            |         | -0-       |              |   |               | 11,054       |         |                    |              | 590    |        |              |          | (7,483  | )          |   |         | 4,161   |        
|                                            |                                                               |                                            |         |           |              |   |               |              |         |                    |              |        |        |              |         
|                                            |                                                               | Total Current Liabilities                  |         |           | 4,991        |   |               |              | 142,438 |                    |              |        | 25,131 |              |          |         | 12,181     |   |         |         | 184,741 | 
|Long-Term Liabilities, less current portion |                                                               |                                            |         |           |              |   |               |              |         |                    |              |        |        |              |          |         |            |   |         |        
|                                            | 8.375% Senior Subordinated Notes due 2014                     |                                            |         | 210,000   |              |   |               | -0-          |         |                    |              | -0-    |        |              |          | -0-     |            |   |         | 210,000 |        
|                                            | Revolving credit maturing on December 31, 2010                |                                            |         | 128,300   |              |   |               | -0-          |         |                    |              | -0-    |        |              |          | -0-     |            |   |         | 128,300 |        
|                                            | Other long-term debt                                          |                                            |         | -0-       |              |   |               | 34,533       |         |                    |              | 3,140  |        |              |          | (30,968 | )          |   |         | 6,705   |        
|                                            | Deferred tax liability                                        |                                            |         | -0-       |              |   |               | -0-          |         |                    |              | -0-    |        |              |          | 3,176   |            |   |         | 3,176   |        
|                                            | Other postretirement benefits and other long-term liabilities |                                            |         | 4,115     |              |   |               | 21,501       |         |                    |              | 3,076  |        |              |          | (2,518  | )          |   |         | 26,174  |        
|                                            |                                                               |                                            |         |           |              |   |               |              |         |                    |              |        |        |              |         
|                                            |                                                               | Total Long-Term Liabilities                |         |           | 342,415      |   |               |              | 56,034  |                    |              |        | 6,216  |              |          |         | (30,310    | ) |         |         | 374,355 | 
|Inter-company advances                      |                                                               |                                            | 227,614 |           |              |   | 415,558       |              |         |                    | 17,674       |        |        |              | (660,846 | )       |            |   | -0-     |        
|Shareholders Equity                        |                                                               |                                            | 102,433 |           |              |   | 282,858       |              |         |                    | 43,696       |        |        |              | (323,358 | )       |            |   | 105,629 |        
|                                            |                                                               |                                            |         |           |              |   |               |              |         |                    |              |        |        |              |         
|                                            |                                                               | Total Liabilities and Shareholders Equity |         | $         | 677,453      |   |               | $            | 896,888 |                    |              | $      | 92,717 |              |          | $       | (1,002,333 | ) |         | $       | 664,725 | 
|                                            |                                                               |                                            |         |           |              |   |               |              |         |                    |              |        |        |              |         

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PARK-OHIO INDUSTRIES, INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)  (Continued)


PARK-OHIO INDUSTRIES, INC. AND SUBSIDIARIES


CONSOLIDATING STATEMENT OF OPERATIONS


For the Three Months Ended June 30, 2006


|                           |                                              |                |        |           |              |   |               |              |  |   |              |       |  |              |      |     |  |   |         |        | 
|-------------------------- | -------------------------------------------- | -------------- | ------ | --------- | ------------ | - | ------------- | ------------ |  | - | ------------ | ----- |  | ------------ | ---- | --- |  | - | ------- | ------ | 
|                           |                                              |                |        | Combined  |              |   | Combined      |              |  |   |              |      
|                           |                                              |                |        | Guarantor |              |   | Non-Guarantor |              |  |   |              |      
|                           |                                              | Parent         |        |           | Subsidiaries |   |               | Subsidiaries |  |   | Eliminations |       |  | Consolidated |     
|                           |                                              |                |        |           |              |   |               |              |  |   |              |       |  |              |     
|                           |                                              | (In thousands) |       
|Net sales                  |                                              | $              | -0-    |           |              | $ | 236,691       |              |  | $ | 31,762       |       |  |              | -0-  |     |  | $ | 268,453 |       
|Cost of sales              |                                              |                | -0-    |           |              |   | 206,736       |              |  |   | 24,002       |       |  |              | -0-  |     |  |   | 230,738 |       
|                           |                                              |                |        |           |              |   |               |              |  |   |              |       |  |              |     
|Gross profit               |                                              |                | -0-    |           |              |   | 29,955        |              |  |   | 7,760        |       |  |              | -0-  |     |  |   | 37,715  |       
|Operating Expenses:        |                                              |                |        |           |              |   |               |              |  |   |              |       |  |              |      |     |  |   |         |       
|                           | Selling, general and administrative expenses |                |        | 836       |              |   |               | 16,997       |  |   |              | 3,970 |  |              |      | 150 |  |   |         | 21,953 | 
|                           |                                              |                |        |           |              |   |               |              |  |   |              |       |  |              |     
|Operating Income (loss)    |                                              |                | (836   | )         |              |   | 12,958        |              |  |   | 3,790        |       |  |              | (150 | )   |  |   | 15,762  |       
|Interest expense           |                                              |                | (1,656 | )         |              |   | 9,023         |              |  |   | 518          |       |  |              | (150 | )   |  |   | 7,735   |       
|                           |                                              |                |        |           |              |   |               |              |  |   |              |       |  |              |     
|Income before income taxes |                                              |                | 820    |           |              |   | 3,935         |              |  |   | 3,272        |       |  |              | -0-  |     |  |   | 8,027   |       
|Income taxes               |                                              |                | 1,498  |           |              |   | -0-           |              |  |   | 1,402        |       |  |              | -0-  |     |  |   | 2,900   |       
|                           |                                              |                |        |           |              |   |               |              |  |   |              |       |  |              |     
|                           | Net income (loss)                            |                | $      | (678      | )            |   | $             | 3,935        |  |   | $            | 1,870 |  |              | $    | -0- |  |   | $       | 5,127  | 
|                           |                                              |                |        |           |              |   |               |              |  |   |              |       |  |              |     

PARK-OHIO INDUSTRIES, INC. AND SUBSIDIARIES


CONSOLIDATING STATEMENT OF OPERATIONS


For the Three Months Ended June 30, 2005


|                           |                                              |                |        |           |              |   |               |              |  |   |              |       |  |              |        |     |  |   |         |        | 
|-------------------------- | -------------------------------------------- | -------------- | ------ | --------- | ------------ | - | ------------- | ------------ |  | - | ------------ | ----- |  | ------------ | ------ | --- |  | - | ------- | ------ | 
|                           |                                              |                |        | Combined  |              |   | Combined      |              |  |   |              |      
|                           |                                              |                |        | Guarantor |              |   | Non-Guarantor |              |  |   |              |      
|                           |                                              | Parent         |        |           | Subsidiaries |   |               | Subsidiaries |  |   | Eliminations |       |  | Consolidated |       
|                           |                                              |                |        |           |              |   |               |              |  |   |              |       |  |              |       
|                           |                                              | (In thousands) |       
|Net sales                  |                                              | $              | -0-    |           |              | $ | 203,545       |              |  | $ | 26,984       |       |  | $            | (1,734 | )   |  | $ | 228,795 |       
|Cost of sales              |                                              |                | -0-    |           |              |   | 173,373       |              |  |   | 21,790       |       |  |              | (1,734 | )   |  |   | 193,429 |       
|                           |                                              |                |        |           |              |   |               |              |  |   |              |       |  |              |       
|Gross profit               |                                              |                | -0-    |           |              |   | 30,172        |              |  |   | 5,194        |       |  |              | -0-    |     |  |   | 35,366  |       
|Operating Expenses:        |                                              |                |        |           |              |   |               |              |  |   |              |       |  |              |        |     |  |   |         |       
|                           | Selling, general and administrative expenses |                |        | 392       |              |   |               | 16,520       |  |   |              | 3,202 |  |              |        | 150 |  |   |         | 20,264 | 
|                           |                                              |                |        |           |              |   |               |              |  |   |              |       |  |              |       
|Operating Income (loss)    |                                              |                | (392   | )         |              |   | 13,652        |              |  |   | 1,992        |       |  |              | (150   | )   |  |   | 15,102  |       
|Interest expense           |                                              |                | (1,482 | )         |              |   | 7,811         |              |  |   | 536          |       |  |              | (150   | )   |  |   | 6,715   |       
|                           |                                              |                |        |           |              |   |               |              |  |   |              |       |  |              |       
|Income before income taxes |                                              |                | 1,090  |           |              |   | 5,841         |              |  |   | 1,456        |       |  |              | -0-    |     |  |   | 8,387   |       
|Income taxes               |                                              |                | 146    |           |              |   | -0-           |              |  |   | 564          |       |  |              | -0-    |     |  |   | 710     |       
|                           |                                              |                |        |           |              |   |               |              |  |   |              |       |  |              |       
|                           | Net income                                   |                | $      | 944       |              |   | $             | 5,841        |  |   | $            | 892   |  |              | $      | -0- |  |   | $       | 7,677  | 
|                           |                                              |                |        |           |              |   |               |              |  |   |              |       |  |              |       

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PARK-OHIO INDUSTRIES, INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)  (Continued)


PARK-OHIO INDUSTRIES, INC. AND SUBSIDIARIES


CONSOLIDATING STATEMENT OF OPERATIONS


For the Six Months Ended June 30, 2006


|                           |                                              |                |        |           |              |   |               |              |  |   |              |       |  |              |      |     |  |   |         |        | 
|-------------------------- | -------------------------------------------- | -------------- | ------ | --------- | ------------ | - | ------------- | ------------ |  | - | ------------ | ----- |  | ------------ | ---- | --- |  | - | ------- | ------ | 
|                           |                                              |                |        | Combined  |              |   | Combined      |              |  |   |              |      
|                           |                                              |                |        | Guarantor |              |   | Non-Guarantor |              |  |   |              |      
|                           |                                              | Parent         |        |           | Subsidiaries |   |               | Subsidiaries |  |   | Eliminations |       |  | Consolidated |     
|                           |                                              |                |        |           |              |   |               |              |  |   |              |       |  |              |     
|                           |                                              | (In thousands) |       
|Net sales                  |                                              | $              | -0-    |           |              | $ | 464,682       |              |  | $ | 63,992       |       |  |              | -0-  |     |  | $ | 528,674 |       
|Cost of sales              |                                              |                | -0-    |           |              |   | 404,302       |              |  |   | 49,770       |       |  |              | -0-  |     |  |   | 454,072 |       
|                           |                                              |                |        |           |              |   |               |              |  |   |              |       |  |              |     
|Gross profit               |                                              |                | -0-    |           |              |   | 60,380        |              |  |   | 14,222       |       |  |              | -0-  |     |  |   | 74,602  |       
|Operating Expenses:        |                                              |                |        |           |              |   |               |              |  |   |              |       |  |              |      |     |  |   |         |       
|                           | Selling, general and administrative expenses |                |        | 1,345     |              |   |               | 34,282       |  |   |              | 7,479 |  |              |      | 300 |  |   |         | 43,406 | 
|                           |                                              |                |        |           |              |   |               |              |  |   |              |       |  |              |     
|Operating Income (loss)    |                                              |                | (1,345 | )         |              |   | 26,098        |              |  |   | 6,743        |       |  |              | (300 | )   |  |   | 31,196  |       
|Interest expense           |                                              |                | (3,113 | )         |              |   | 17,619        |              |  |   | 899          |       |  |              | (300 | )   |  |   | 15,105  |       
|                           |                                              |                |        |           |              |   |               |              |  |   |              |       |  |              |     
|Income before income taxes |                                              |                | 1,768  |           |              |   | 8,479         |              |  |   | 5,844        |       |  |              | -0-  |     |  |   | 16,091  |       
|Income taxes               |                                              |                | 3,629  |           |              |   | 25            |              |  |   | 2,319        |       |  |              | -0-  |     |  |   | 5,973   |       
|                           |                                              |                |        |           |              |   |               |              |  |   |              |       |  |              |     
|                           | Net income (loss)                            |                | $      | (1,861    | )            |   | $             | 8,454        |  |   | $            | 3,525 |  |              | $    | -0- |  |   | $       | 10,118 | 
|                           |                                              |                |        |           |              |   |               |              |  |   |              |       |  |              |     

PARK-OHIO INDUSTRIES, INC. AND SUBSIDIARIES


CONSOLIDATING STATEMENT OF OPERATIONS


For the Six Months Ended June 30, 2005


|                           |                                              |                |        |           |              |   |               |              |  |   |              |       |  |              |        |     |  |   |         |        | 
|-------------------------- | -------------------------------------------- | -------------- | ------ | --------- | ------------ | - | ------------- | ------------ |  | - | ------------ | ----- |  | ------------ | ------ | --- |  | - | ------- | ------ | 
|                           |                                              |                |        | Combined  |              |   | Combined      |              |  |   |              |      
|                           |                                              |                |        | Guarantor |              |   | Non-Guarantor |              |  |   |              |      
|                           |                                              | Parent         |        |           | Subsidiaries |   |               | Subsidiaries |  |   | Eliminations |       |  | Consolidated |       
|                           |                                              |                |        |           |              |   |               |              |  |   |              |       |  |              |       
|                           |                                              | (In thousands) |       
|Net sales                  |                                              | $              | -0-    |           |              | $ | 406,194       |              |  | $ | 55,635       |       |  | $            | (4,151 | )   |  | $ | 457,678 |       
|Cost of sales              |                                              |                | -0-    |           |              |   | 346,870       |              |  |   | 44,497       |       |  |              | (4,151 | )   |  |   | 387,216 |       
|                           |                                              |                |        |           |              |   |               |              |  |   |              |       |  |              |       
|Gross profit               |                                              |                | -0-    |           |              |   | 59,324        |              |  |   | 11,138       |       |  |              | -0-    |     |  |   | 70,462  |       
|Operating Expenses:        |                                              |                |        |           |              |   |               |              |  |   |              |       |  |              |        |     |  |   |         |       
|                           | Selling, general and administrative expenses |                |        | 2,513     |              |   |               | 32,652       |  |   |              | 6,358 |  |              |        | 300 |  |   |         | 41,823 | 
|                           |                                              |                |        |           |              |   |               |              |  |   |              |       |  |              |       
|Operating Income (loss)    |                                              |                | (2,513 | )         |              |   | 26,672        |              |  |   | 4,780        |       |  |              | (300   | )   |  |   | 28,639  |       
|Interest expense           |                                              |                | (2,906 | )         |              |   | 15,308        |              |  |   | 1,072        |       |  |              | (300   | )   |  |   | 13,174  |       
|                           |                                              |                |        |           |              |   |               |              |  |   |              |       |  |              |       
|Income before income taxes |                                              |                | 393    |           |              |   | 11,364        |              |  |   | 3,708        |       |  |              | -0-    |     |  |   | 15,465  |       
|Income taxes               |                                              |                | (515   | )         |              |   | -0-           |              |  |   | 2,024        |       |  |              | -0-    |     |  |   | 1,509   |       
|                           |                                              |                |        |           |              |   |               |              |  |   |              |       |  |              |       
|                           | Net income                                   |                | $      | 908       |              |   | $             | 11,364       |  |   | $            | 1,684 |  |              | $      | -0- |  |   | $       | 13,956 | 
|                           |                                              |                |        |           |              |   |               |              |  |   |              |       |  |              |       

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PARK-OHIO INDUSTRIES, INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)  (Continued)


PARK-OHIO INDUSTRIES, INC. AND SUBSIDIARIES


CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS


For the Six Months Ended June 30, 2006


|                                                 |                                                           |                |         |           |              |   |               |              |   |   |              |        |   |              |     |     |  |   |         |        |  
|------------------------------------------------ | --------------------------------------------------------- | -------------- | ------- | --------- | ------------ | - | ------------- | ------------ | - | - | ------------ | ------ | - | ------------ | --- | --- |  | - | ------- | ------ | -
|                                                 |                                                           |                |         | Combined  |              |   | Combined      |              |   |   |              |       
|                                                 |                                                           |                |         | Guarantor |              |   | Non-Guarantor |              |   |   |              |       
|                                                 |                                                           | Parent         |         |           | Subsidiaries |   |               | Subsidiaries |   |   | Eliminations |        |   | Consolidated |    
|                                                 |                                                           |                |         |           |              |   |               |              |   |   |              |        |   |              |    
|                                                 |                                                           | (In thousands) |        
|Net cash provided (used) by operations           |                                                           | $              | (38,311 | )         |              | $ | 17,436        |              |   | $ | 43           |        |   | $            | -0- |     |  | $ | (20,832 | )     
|Cash flows from investing activities:            |                                                           |                |         |           |              |   |               |              |   |   |              |        |   |              |     |     |  |   |         |       
|                                                 | Acquisitions, net of cash acquired                        |                |         | -0-       |              |   |               | -0-          |   |   |              | (3,219 | ) |              |     | -0- |  |   |         | (3,219 | )
|                                                 | Purchases of property, plant and equipment, net           |                |         | (132      | )            |   |               | (6,460       | ) |   |              | (931   | ) |              |     | -0- |  |   |         | (7,523 | )
|                                                 |                                                           |                |         |           |              |   |               |              |   |   |              |        |   |              |    
|Net cash provided (used) in investing activities |                                                           |                | (132    | )         |              |   | (6,460        | )            |   |   | (4,150       | )      |   |              | -0- |     |  |   | (10,742 | )     
|Cash flows from financing activities:            |                                                           |                |         |           |              |   |               |              |   |   |              |        |   |              |     |     |  |   |         |       
|                                                 | Proceeds from bank arrangements                           |                |         | 29,100    |              |   |               | -0-          |   |   |              | 1,033  |   |              |     | -0- |  |   |         | 30,133 |  
|                                                 | Principal payments on revolving credit and long-term debt |                |         | -0-       |              |   |               | (226         | ) |   |              | -0-    |   |              |     | -0- |  |   |         | (226   | )
|                                                 |                                                           |                |         |           |              |   |               |              |   |   |              |        |   |              |    
|Net cash provided (used) by financing activities |                                                           |                | 29,100  |           |              |   | (226          | )            |   |   | 1,033        |        |   |              | -0- |     |  |   | 29,907  |       
|                                                 |                                                           |                |         |           |              |   |               |              |   |   |              |        |   |              |    
|Increase (decrease) in cash and cash equivalents |                                                           |                | (9,343  | )         |              |   | 10,750        |              |   |   | (3,074       | )      |   |              | -0- |     |  |   | (1,667  | )     
|Cash and cash equivalents at beginning of period |                                                           |                | 5,343   |           |              |   | 626           |              |   |   | 11,899       |        |   |              |    |     |  |   | 17,868  |       
|                                                 |                                                           |                |         |           |              |   |               |              |   |   |              |        |   |              |    
|Cash and cash equivalents at end of period       |                                                           | $              | (4,000  | )         |              | $ | 11,376        |              |   | $ | 8,825        |        |   | $            | -0- |     |  | $ | 16,201  |       
|                                                 |                                                           |                |         |           |              |   |               |              |   |   |              |        |   |              |    

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PARK-OHIO INDUSTRIES, INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)  (Continued)


PARK-OHIO INDUSTRIES, INC. AND SUBSIDIARIES


CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS


For the Six Months Ended June 30, 2005


|                                                 |                                                           |                |         |           |              |   |               |              |   |   |              |        |   |              |     |     |  |   |         |        |  
|------------------------------------------------ | --------------------------------------------------------- | -------------- | ------- | --------- | ------------ | - | ------------- | ------------ | - | - | ------------ | ------ | - | ------------ | --- | --- |  | - | ------- | ------ | -
|                                                 |                                                           |                |         | Combined  |              |   | Combined      |              |   |   |              |       
|                                                 |                                                           |                |         | Guarantor |              |   | Non-Guarantor |              |   |   |              |       
|                                                 |                                                           | Parent         |         |           | Subsidiaries |   |               | Subsidiaries |   |   | Eliminations |        |   | Consolidated |    
|                                                 |                                                           |                |         |           |              |   |               |              |   |   |              |        |   |              |    
|                                                 |                                                           | (In thousands) |        
|Net cash provided (used) by operations           |                                                           | $              | (45,135 | )         |              | $ | 29,496        |              |   | $ | (1,015       | )      |   | $            | -0- |     |  | $ | (16,654 | )     
|Cash flows from investing activities:            |                                                           |                |         |           |              |   |               |              |   |   |              |        |   |              |     |     |  |   |         |       
|                                                 | Purchases of property, plant and equipment, net           |                |         | (203      | )            |   |               | (6,335       | ) |   |              | (1,127 | ) |              |     | -0- |  |   |         | (7,665 | )
|                                                 | Proceeds from sale of assets held for sale                |                |         | -0-       |              |   |               | 1,100        |   |   |              | -0-    |   |              |     | -0- |  |   |         | 1,100  |  
|                                                 |                                                           |                |         |           |              |   |               |              |   |   |              |        |   |              |    
|Net cash provided (used) in investing activities |                                                           |                | (203    | )         |              |   | (5,235        | )            |   |   | (1,127       | )      |   |              | -0- |     |  |   | (6,565  | )     
|Cash flows from financing activities:            |                                                           |                |         |           |              |   |               |              |   |   |              |        |   |              |     |     |  |   |         |       
|                                                 | Proceeds from revolving credit arrangements               |                |         | 15,000    |              |   |               | -0-          |   |   |              | 2,701  |   |              |     | -0- |  |   |         | 17,701 |  
|                                                 | Principal payments on revolving credit and long-term debt |                |         | -0-       |              |   |               | (225         | ) |   |              | -0-    |   |              |     | -0- |  |   |         | (225   | )
|                                                 |                                                           |                |         |           |              |   |               |              |   |   |              |        |   |              |    
|Net cash provided (used) by financing activities |                                                           |                | 15,000  |           |              |   | (225          | )            |   |   | 2,701        |        |   |              | -0- |     |  |   | 17,476  |       
|                                                 |                                                           |                |         |           |              |   |               |              |   |   |              |        |   |              |    
|Increase (decrease) in cash and cash equivalents |                                                           |                | (30,338 | )         |              |   | 24,036        |              |   |   | 559          |        |   |              | -0- |     |  |   | (5,743  | )     
|Cash and cash equivalents at beginning of period |                                                           |                | (643    | )         |              |   | 199           |              |   |   | 6,851        |        |   |              | -0- |     |  |   | 6,407   |       
|                                                 |                                                           |                |         |           |              |   |               |              |   |   |              |        |   |              |    
|Cash and cash equivalents at end of period       |                                                           | $              | (30,981 | )         |              | $ | 24,235        |              |   | $ | 7,410        |        |   | $            | -0- |     |  | $ | 664     |       
|                                                 |                                                           |                |         |           |              |   |               |              |   |   |              |        |   |              |    

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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
















| |                      
| | ---------------------
| | /s/ Ernst & Young LLP





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|        |                                                                                          
|------- | -----------------------------------------------------------------------------------------
|Item 2. | Managements Discussion and Analysis of Financial
    Condition and Results of Operations



Executive Overview


just-in












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##### Table of Contents









Results of Operations




| |                                       
| | --------------------------------------
| | Six Months 2006 versus Six Months 2005



| |                      
| | ---------------------
| | Net Sales by Segment:

|                       |  |                |       |  |      |   |         |        |           |            |        |  |  |       |    |   |  |   |      | 
|---------------------- |  | -------------- | ----- |  | ---- | - | ------- | ------ | --------- | ---------- | ------ |  |  | ----- | -- | - |  | - | ---- | 
|                       |  | Six Months     |       |  |      |   |         |        |          
|                       |  | Ended June 30, |       |  |      |   |         |        | Acquired/ |           
|                       |  |                |       |  |      |   | Percent |        |           | (Divested) |       
|                       |  | 2006           |       |  | 2005 |   |         | Change |           |            | Change |  |  | Sales |   
|                       |  |                |       |  |      |   |         |        |           |            |        |  |  |       |   
|ILS                    |  | $              | 300.5 |  |      | $ | 256.4   |        |           | $          | 44.1   |  |  |       | 17 | % |  | $ | 28.0 | 
|Aluminum products      |  |                | 87.6  |  |      |   | 86.0    |        |           |            | 1.6    |  |  |       | 2  | % |  |   | 0.0  | 
|Manufactured products  |  |                | 140.6 |  |      |   | 115.3   |        |           |            | 25.3   |  |  |       | 22 | % |  |   | 11.4 | 
|                       |  |                |       |  |      |   |         |        |           |            |        |  |  |       |   
|Consolidated net sales |  | $              | 528.7 |  |      | $ | 457.7   |        |           | $          | 71.0   |  |  |       | 16 | % |  | $ | 39.4 | 
|                       |  |                |       |  |      |   |         |        |           |            |        |  |  |       |   





| |                                      
| | -------------------------------------
| | Cost of Products Sold & Gross Profit:

|                                   |  |                |       |   |      |   |         |        |  |   |        |  |  |  |    |  
|---------------------------------- |  | -------------- | ----- | - | ---- | - | ------- | ------ |  | - | ------ |  |  |  | -- | -
|                                   |  | Six Months     |       |   |      |   |        
|                                   |  | Ended June 30, |       |   |      |   |        
|                                   |  |                |       |   |      |   | Percent |       
|                                   |  | 2006           |       |   | 2004 |   |         | Change |  |   | Change | 
|                                   |  |                |       |   |      |   |         |        |  |   |        | 
|Consolidated cost of products sold |  | $              | 454.1 |   |      | $ | 387.2   |        |  | $ | 66.9   |  |  |  | 17 | %
|                                   |  |                |       |   |      |   |         |        |  |   |        | 
|Consolidated gross profit          |  | $              | 74.6  |   |      | $ | 70.5    |        |  | $ | 4.1    |  |  |  | 6  | %
|                                   |  |                |       |   |      |   |         |        |  |   |        | 
|Gross margin                       |  |                | 14.1  | % |      |   | 15.4    | %      |  |   |        |  |  |  |    |  





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##### Table of Contents



Quarter-to




| |                                                         
| | --------------------------------------------------------
| | Selling, General & Administrative
    (SG&A) Expenses:

|                           |  |                |      |   |      |   |         |        |  |   |        |  |  |  |   |  
|-------------------------- |  | -------------- | ---- | - | ---- | - | ------- | ------ |  | - | ------ |  |  |  | - | -
|                           |  | Six Months     |      |   |      |   |        
|                           |  | Ended June 30, |      |   |      |   |        
|                           |  |                |      |   |      |   | Percent |       
|                           |  | 2006           |      |   | 2005 |   |         | Change |  |   | Change | 
|                           |  |                |      |   |      |   |         |        |  |   |        | 
|Consolidated SG&A expenses |  | $              | 43.4 |   |      | $ | 41.8    |        |  | $ | 1.6    |  |  |  | 4 | %
|SG&A percent               |  |                | 8.2  | % |      |   | 9.1     | %      |  |   |        |  |  |  |   |  





| |                  
| | -----------------
| | Interest Expense:

|                               |  |                |       |   |      |   |         |        |  |   |        |               |  |  |    |  
|------------------------------ |  | -------------- | ----- | - | ---- | - | ------- | ------ |  | - | ------ | ------------- |  |  | -- | -
|                               |  | Six Months     |       |   |      |   |        
|                               |  | Ended June 30, |       |   |      |   |        
|                               |  |                |       |   |      |   | Percent |       
|                               |  | 2006           |       |   | 2005 |   |         | Change |  |   | Change |              
|                               |  |                |       |   |      |   |         |        |  |   |        |              
|Interest expense               |  | $              | 15.1  |   |      | $ | 13.2    |        |  | $ | 1.9    |               |  |  | 14 | %
|Average outstanding borrowings |  | $              | 368.6 |   |      | $ | 356.8   |        |  | $ | 11.8   |               |  |  | 3  | %
|Average borrowing rate         |  |                | 8.20  | % |      |   | 7.39    | %      |  |   | 81     | basis  points |  |  |    |  





| |            
| | -----------
| | Income Tax:





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##### Table of Contents







| |                                               
| | ----------------------------------------------
| | Second Quarter 2006 versus Second Quarter 2005



| |                      
| | ---------------------
| | Net Sales by Segment:

|                       |  |                |       |  |      |   |         |        |           |            |        |  |  |       |    |   |  |   |      | 
|---------------------- |  | -------------- | ----- |  | ---- | - | ------- | ------ | --------- | ---------- | ------ |  |  | ----- | -- | - |  | - | ---- | 
|                       |  | Three Months   |       |  |      |   |         |        |          
|                       |  | Ended June 30, |       |  |      |   |         |        | Acquired/ |           
|                       |  |                |       |  |      |   | Percent |        |           | (Divested) |       
|                       |  | 2006           |       |  | 2005 |   |         | Change |           |            | Change |  |  | Sales |   
|                       |  |                |       |  |      |   |         |        |           |            |        |  |  |       |   
|ILS                    |  | $              | 150.3 |  |      | $ | 129.5   |        |           | $          | 20.8   |  |  |       | 16 | % |  | $ | 14.1 | 
|Aluminum products      |  |                | 44.9  |  |      |   | 43.1    |        |           |            | 1.8    |  |  |       | 4  | % |  |   | 0.0  | 
|Manufactured products  |  |                | 73.2  |  |      |   | 56.2    |        |           |            | 17.0   |  |  |       | 30 | % |  |   | 5.8  | 
|                       |  |                |       |  |      |   |         |        |           |            |        |  |  |       |   
|Consolidated net sales |  | $              | 268.4 |  |      | $ | 228.8   |        |           | $          | 39.6   |  |  |       | 17 | % |  | $ | 19.9 | 
|                       |  |                |       |  |      |   |         |        |           |            |        |  |  |       |   





| |                                      
| | -------------------------------------
| | Cost of Products Sold & Gross Profit:

|                                   |  |                |       |   |      |   |         |        |  |   |        |  |  |  |    |  
|---------------------------------- |  | -------------- | ----- | - | ---- | - | ------- | ------ |  | - | ------ |  |  |  | -- | -
|                                   |  | Three Months   |       |   |      |   |        
|                                   |  | Ended June 30, |       |   |      |   |        
|                                   |  |                |       |   |      |   | Percent |       
|                                   |  | 2006           |       |   | 2005 |   |         | Change |  |   | Change | 
|                                   |  |                |       |   |      |   |         |        |  |   |        | 
|Consolidated cost of products sold |  | $              | 230.7 |   |      | $ | 193.4   |        |  | $ | 37.3   |  |  |  | 19 | %
|                                   |  |                |       |   |      |   |         |        |  |   |        | 
|Consolidated gross profit          |  | $              | 37.7  |   |      | $ | 35.4    |        |  | $ | 2.3    |  |  |  | 6  | %
|                                   |  |                |       |   |      |   |         |        |  |   |        | 
|Gross margin                       |  |                | 14.0  | % |      |   | 15.5    | %      |  |   |        |  |  |  |    |  



Quarter-to




| |               
| | --------------
| | SG&A Expenses:

|                           |  |                |      |   |      |   |         |        |  |   |        |  |  |  |   |  
|-------------------------- |  | -------------- | ---- | - | ---- | - | ------- | ------ |  | - | ------ |  |  |  | - | -
|                           |  | Three Months   |      |   |      |   |        
|                           |  | Ended June 30, |      |   |      |   |        
|                           |  |                |      |   |      |   | Percent |       
|                           |  | 2006           |      |   | 2005 |   |         | Change |  |   | Change | 
|                           |  |                |      |   |      |   |         |        |  |   |        | 
|Consolidated SG&A expenses |  | $              | 22.0 |   |      | $ | 20.3    |        |  | $ | 1.7    |  |  |  | 8 | %
|SG&A percent               |  |                | 8.2  | % |      |   | 8.9     | %      |  |   |        |  |  |  |   |  



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| |                  
| | -----------------
| | Interest Expense:

|                               |  |                |       |   |      |   |         |        |  |   |        |              |  |  |    |  
|------------------------------ |  | -------------- | ----- | - | ---- | - | ------- | ------ |  | - | ------ | ------------ |  |  | -- | -
|                               |  | Three Months   |       |   |      |   |        
|                               |  | Ended June 30, |       |   |      |   |        
|                               |  |                |       |   |      |   | Percent |       
|                               |  | 2006           |       |   | 2005 |   |         | Change |  |   | Change |             
|                               |  |                |       |   |      |   |         |        |  |   |        |             
|Interest expense               |  | $              | 7.7   |   |      | $ | 6.7     |        |  | $ | 1.0    |              |  |  | 15 | %
|Average outstanding borrowings |  | $              | 379.3 |   |      | $ | 361.4   |        |  | $ | 17.9   |              |  |  | 5  | %
|Average borrowing rate         |  |                | 8.16  | % |      |   | 7.43    | %      |  |   | 73     | basis points |  |  |    |  





| |            
| | -----------
| | Income Tax:



Seasonality; Variability of Operating Results






Forward-Looking Statements


10-Q


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##### Table of Contents





Review By Registered Public Accounting Firm









|        |                                                           
|------- | ----------------------------------------------------------
|Item 3. | Quantitative and Qualitative Disclosures About Market Risk












|        |                        
|------- | -----------------------
|Item 4. | Controls and Procedures

13a-15(e)






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##### Table of Contents






PART II


OTHER INFORMATION







|        |                  
|------- | -----------------
|Item 1. | Legal Proceedings













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##### Table of Contents








|         |             
|-------- | ------------
|Item 1A. | Risk Factors

10-K







|        |         
|------- | --------
|Item 6. | Exhibits



|     |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|---- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|4    |  | Fourth Amendment, dated June 9, 2006, to the Amended and
    Restated Credit Agreement, dated November 5, 2003, among
    Park-Ohio Industries, Inc., the other loan parties thereto, the
    lenders party thereto and JPMorgan Chase Bank, N.A. (successor
    by merger to Bank One, NA), as agent (filed as Exhibit 4.1
    to the Form 8-K of Park-Ohio Holdings Corp. filed on
    June 14, 2006, SEC File No. 000-03134 and incorporated
    by reference and made a part hereof)
|10.1 |  | Park-Ohio Holdings Corp. Amended and Restated 1998 Long-Term
    Incentive Plan (filed as Exhibit 10.1 to the Form 8-K
    of Park-Ohio Holdings Corp. filed on June 1, 2006, SEC File
    No. 000-03134 and incorporated by reference and made a part
    hereof)                                                                                                                                                                                                                      
|10.2 |  | Park-Ohio Holdings Corp. Annual Cash Bonus Plan (filed as
    Exhibit 10.2 to the Form 8-K of Park-Ohio Holdings
    Corp. filed on June 1, 2006, SEC File No. 000-03134
    and incorporated by reference and made a part hereof)                                                                                                                                                                                                                                                      
|31.1 |  | Principal Executive Officers Certification Pursuant to
    Section 302 of the Sarbanes-Oxley Act of 2002                                                                                                                                                                                                                                                                                                                                                                               
|31.2 |  | Principal Financial Officers Certification Pursuant to
    Section 302 of the Sarbanes-Oxley Act of 2002                                                                                                                                                                                                                                                                                                                                                                               
|32   |  | Certification requirement under Section 906 of the
    Sarbanes-Oxley Act of 2002                                                                                                                                                                                                                                                                                                                                                                                                       

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SIGNATURE








| |                           
| | --------------------------
| | PARK-OHIO INDUSTRIES, INC.
| |                           
| | (Registrant)              



| |    |                           
| | -- | --------------------------
| | By | /s/ Richard P.
    Elliott

| |                                                  
| | -------------------------------------------------
| | Name: Richard P. Elliott                         
| | Title: Vice President and Chief Financial Officer
| | (Principal Financial and Accounting Officer)     

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##### Table of Contents






EXHIBIT INDEX


QUARTERLY REPORT ON
FORM 10-Q


PARK-OHIO INDUSTRIES, INC. AND SUBSIDIARIES


FOR THE QUARTER ENDED JUNE 30, 2006


|        |      |  |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|------- | ---- |  |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |      | 
|        |      | 
|        | 4    |  |  | Fourth Amendment, dated June 9, 2006, to the Amended and
    Restated Credit Agreement, dated November 5, 2003, among
    Park-Ohio Industries, Inc., the other loan parties thereto, the
    lenders party thereto and JP Morgan Chase Bank, N.A. (successor
    by merger to Bank One, NA), as agent (filed as Exhibit 4.1
    to the Form 8-K of Park-Ohio Holdings Corp. filed on
    June 14, 2006, SEC File No. 000-03134 and incorporated
    by reference and made a part hereof)
|        | 10.1 |  |  | Park-Ohio Holdings Corp. Amended and Restated 1998 Long-Term
    Incentive Plan (filed as Exhibit 10.1 to the Form 8-K
    of Park-Ohio Holdings Corp. filed on June 1, 2006, SEC File
    No. 000-03134 and incorporated by reference and made a part
    hereof)                                                                                                                                                                                                                       
|        | 10.2 |  |  | Park-Ohio Holdings Corp. Annual Cash Bonus Plan (filed as
    Exhibit 10.2 to the Form 8-K of Park-Ohio Holdings
    Corp. filed on June 1, 2006, SEC File No. 000-03134
    and incorporated by reference and made a part hereof)                                                                                                                                                                                                                                                       
|        | 31.1 |  |  | Principal Executive Officers Certification Pursuant to
    Section 302 of the Sarbanes-Oxley Act of 2002                                                                                                                                                                                                                                                                                                                                                                                
|        | 31.2 |  |  | Principal Financial Officers Certification Pursuant to
    Section 302 of the Sarbanes-Oxley Act of 2002                                                                                                                                                                                                                                                                                                                                                                                
|        | 32   |  |  | Certification requirement under Section 906 of the
    Sarbanes-Oxley Act of 2002                                                                                                                                                                                                                                                                                                                                                                                                        

29