##### Table of Contents



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 1934For the quarterly period ended
    September 30, 2006oro

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934For 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.Yes þ     No o  Rule 12b-2
  o o þ
  Rule 12b-2
  Yes o     No þ




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##### 



PARK-OHIO
    INDUSTRIES, INC. AND SUBSIDIARIES
  INDEX
  
  PagePART I.
    FINANCIAL INFORMATIONItem 1.


Financial
    Statements


3Consolidated
    balance sheets  September 30, 2006 and
    December 31, 2005


3Consolidated
    statements of income  Three months and nine months
    ended September 30, 2006 and 2005


4Consolidated
    statement of shareholders equity  Nine months
    ended September 30, 2006


5Consolidated
    statements of cash flows  Nine months ended
    September 30, 2006 and 2005


6Notes to
    consolidated financial statements  September 30,
    2006


7Report of
    Independent Registered Public Accounting Firm


19Item 2.


Managements
    Discussion and Analysis of Financial Condition and Results of
    Operations


20Item 4.


Controls and
    Procedures


25PART II.
    OTHER INFORMATIONItem 1.


Legal
    Proceedings


26Item 6.


Exhibits


27SIGNATURE


28EXHIBIT
    INDEX


29Exhibit 31.1Exhibit 31.2Exhibit 32   2




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##### Table of Contents



PART I.
    Financial Information  ITEM 1.
    Financial
    Statements  PARK-OHIO
    INDUSTRIES, INC. AND SUBSIDIARIES
  CONSOLIDATED BALANCE SHEETS
  (Unaudited)September 30,


December 31,2006


2005(Dollars in thousands)ASSETSCurrent AssetsCash and cash equivalents

$
16,647


$
17,868Accounts receivable, less
    allowances for doubtful accounts of $3,885 at September 30,
    2006 and $5,120 at December 31, 2005


184,359



153,502Inventories


219,926



190,553Deferred tax assets


8,627



8,627Other current assets


38,783



27,753Total Current Assets


468,342



398,303Property, Plant and Equipment


251,682



243,367Less accumulated depreciation


142,872



130,265108,810



113,102Other AssetsGoodwill


85,389



82,703Net assets held for sale


5,018



-0-Other


67,266



70,617$
734,825


$
664,725LIABILITIES AND
    SHAREHOLDERS EQUITYCurrent LiabilitiesTrade accounts payable

$
136,650


$
115,396Accrued expenses


75,300



65,184Current portion of long-term
    liabilities


4,520



4,161Total Current Liabilities


216,470



184,741Long-Term Liabilities, less
    current portion 
    8.375% Senior Subordinated Notes due 2014


210,000



210,000Revolving credit


152,700



128,300Other long-term debt


5,439



6,705Deferred tax liability


3,176



3,176Other postretirement benefits and
    other long-term liabilities


24,598



26,174395,913



374,355Shareholders EquityCommon stock, par value $1 a share


-0-



-0-Additional paid-in capital


64,844



64,844Retained earnings


57,018



42,887Accumulated other comprehensive
    income (loss)


580



(2,102
)122,442



105,629$
734,825


$
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.   3




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##### Table of Contents



PARK-OHIO
    INDUSTRIES, INC. AND SUBSIDIARIES
 CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)  Three Months Ended


Nine Months EndedSeptember 30,


September 30,2006


2005


2006


2005(Amounts in thousands)Net sales

$
257,167


$
234,247


$
785,841


$
691,925Cost of products sold


220,967



198,327



675,039



585,543Gross profit


36,200



35,920



110,802



106,382Selling, general and
    administrative expenses


22,138



22,454



65,544



64,277Operating income


14,062



13,466



45,258



42,105Interest expense


8,065



7,200



23,170



20,374Income before income taxes


5,997



6,266



22,088



21,731Income taxes


1,984



751



7,957



2,260Net income

$
4,013


$
5,515


$
14,131


$
19,471    4




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##### Table of Contents



PARK-OHIO
    INDUSTRIES, INC. AND SUBSIDIARIES
 CONSOLIDATED STATEMENT OF SHAREHOLDERS EQUITY
    (UNAUDITED)  AccumulatedOtherAdditional





ComprehensiveCommon


Paid-In


Retained


IncomeStock


Capital


Earnings


(Loss)


Total(Dollars in thousands)Balance at January 1, 2006

$
-0-


$
64,844


$
42,887


$
(2,102
)

$
105,629Comprehensive income:Net income










14,131







14,131Foreign currency translation
    adjustment














2,682



2,682Comprehensive income


















16,813Balance at September 30, 2006

$
-0-


$
64,844


$
57,018


$
580


$
122,442    5




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##### Table of Contents



PARK-OHIO
    INDUSTRIES, INC. AND SUBSIDIARIES
 CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)  Nine Months EndedSeptember 30,2006


2005(Dollars in thousands)OPERATING ACTIVITIESNet income

$
14,131


$
19,471Adjustments to reconcile net
    income to net cash (used) provided by operating activities:Depreciation and amortization


14,097



12,843Changes in operating assets and
    liabilities:Accounts receivable


(30,145
)


(14,695
)Inventories and other current
    assets


(39,782
)


(3,845
)Accounts payable and accrued
    expenses


30,462



(4,122
)Other


(2,335
)


(5,691
)Net Cash (Used) Provided by
    Operating Activities


(13,572
)


3,961INVESTING ACTIVITIESPurchases of property, plant and
    equipment, net


(7,923
)


(12,405
)Acquisitions, net of cash acquired


(3,219
)


(7,000
)Proceeds from sale of assets held
    for sale


-0-



1,100Net Cash Used by Investing
    Activities


(11,142
)


(18,305
)FINANCING ACTIVITIESProceeds from debt, net


23,493



17,983Net Cash Provided by Financing
    Activities


23,493



17,983(Decrease)/Increase in Cash and
    Cash Equivalents


(1,221
)


3,639Cash and Cash Equivalents at
    Beginning of Period


17,868



6,407Cash and Cash Equivalents at End
    of Period

$
16,647


$
10,046Taxes paid

$
3,927


$
1,623Interest paid


17,046



13,072    6




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##### Table of Contents



PARK-OHIO
    INDUSTRIES, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
  September 30,
    2006
    (Amounts in thousands)
  NOTE A 
    Basis of Presentation
    Form 10-Q Regulation S-X. Form 10-K
  NOTE B 
    Recent Accounting Pronouncements
       7




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##### Table of Contents



PARK-OHIO
    INDUSTRIES, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
    (UNAUDITED)  (Continued)
  NOTE C 
    Acquisitions
  Regulation S-X.
  Regulation S-X.
  Cash acquisition price, less cash
    acquired

$
4,698AssetsAccounts receivable


(2,640
)Inventories


(954
)Prepaid expenses


(97
)Equipment


(871
)Other assets


(545
)LiabilitiesAccrued expenses


409Goodwill

$
-0-   Regulation S-X.
  Cash acquisition price

$
7,000AssetsAccounts receivable


(10,835
)Inventories


(10,909
)Prepaid expenses


(1,201
)Equipment


(407
)LiabilitiesAccounts payable


12,783Accrued expenses


2,270Note payable


1,299Goodwill

$
-0-  8




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##### Table of Contents



PARK-OHIO
    INDUSTRIES, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
    (UNAUDITED)  (Continued)
  No. 95-3,
  Severance and


Exit andPersonnel


Relocation


TotalBalance at June 30, 2005

$
-0-


$
-0-


$
-0-Add: Accruals


250



1,750



2,000Less: Payments


(551
)


(594
)


(1,145
)Transfers


400



(400
)


-0-Balance at December 31, 2005

$
99


$
756


$
855Less: Payments and Adjustments


(43
)


(406
)


(449
)Transfers


(56
)


56



-0-Balance at September 30, 2006

$
-0-


$
406


$
406   NOTE D 
    Inventories
    September 30,


December 31,2006


2005Finished goods

$
144,948


$
128,465Work in process


39,281



32,547Raw materials and supplies


35,697



29,541$
219,926


$
190,553   NOTE E 
    Pension Plans and Other Postretirement Benefits
    Pension Benefits


Postretirement BenefitsThree Months


Nine Months


Three Months


Nine MonthsEnded


Ended


Ended


EndedSeptember 30,


September 30,


September 30,


September 30,2006


2005


2006


2005


2006


2005


2006


2005Service costs

$
87


$
97


$
261


$
291


$
50


$
35


$
150


$
105Interest costs


726



796



2,178



2,388



323



348



969



1,044Expected return on plan assets


(2,078
)


(2,211
)


(6,234
)


(6,633
)


-0-



-0-



-0-



-0-Transition obligation


(12
)


(12
)


(36
)


(36
)


-0-



-0-



-0-



-0-Amortization of prior service cost


39



41



117



123



(16
)


(17
)


(48
)


(51
)Recognized net actuarial (gain)
    loss


81



(60
)


243



(180
)


94



50



282



150Benefit (income) costs

$
(1,157
)

$
(1,349
)

$
(3,471
)

$
(4,047
)

$
451


$
416


$
1,353


$
1,248  9




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##### Table of Contents



PARK-OHIO
    INDUSTRIES, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
    (UNAUDITED)  (Continued)
  NOTE F 
    Segments
      Three Months Ended


Nine Months EndedSeptember 30,


September 30,2006


2005


2006


2005Net sales:ILS

$
149,133


$
137,810


$
449,630


$
394,212Aluminum products


33,274



36,816



120,889



122,800Manufactured products


74,760



59,621



215,322



174,913$
257,167


$
234,247


$
785,841


$
691,925Income before income taxes:ILS

$
8,796


$
8,200


$
29,449


$
24,675Aluminum products


(118
)


1,515



4,318



7,419Manufactured products


8,148



5,995



19,942



17,75716,826



15,710



53,709



49,851Corporate costs


(2,764
)


(2,244
)


(8,451
)


(7,746
)Interest expense


(8,065
)


(7,200
)


(23,170
)


(20,374
)$
5,997


$
6,266


$
22,088


$
21,731   September 30,


December 31,2006


2005Identifiable assets were as
    follows:ILS

$
373,155


$
323,176Aluminum products


108,723



101,489Manufactured products


218,152



169,004General corporate


34,795



71,056$
734,825


$
664,725  10




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##### Table of Contents



PARK-OHIO
    INDUSTRIES, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
    (UNAUDITED)  (Continued)
  NOTE G 
    Comprehensive Income
    Three Months Ended


Nine Months EndedSeptember 30,


September 30,2006


2005


2006


2005Net income

$
4,013


$
5,515


$
14,131


$
19,471Foreign currency translation


99



1,383



2,682



695Total comprehensive income

$
4,112


$
6,898


$
16,813


$
20,166     September 30,


December 31,2006


2005Foreign currency translation
    adjustment

$
5,938


$
3,256Minimum pension liability


(5,358
)


(5,358
)$
580


$
(2,102
)   NOTE H 
    Restructuring Activities
  Form 10-K
    Balance at December 31, 2005

$
596Cash payments


(248
)Balance at September 30, 2006

$
348   NOTE I 
    Accrued Warranty Costs
    Balance at January 1, 2006

$
3,566Claims paid during the year


(1,967
)Additional warranties issued
    during the year


2,209Acquired warranty liabilities


164Balance at September 30, 2006

$
3,972   NOTE J 
    Financing Arrangements
   11




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##### Table of Contents



PARK-OHIO
    INDUSTRIES, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
    (UNAUDITED)  (Continued)
    NOTE K 
    Income Taxes
    NOTE L 
    Derivatives and Hedging
      
 NOTE M 
    Subsequent Event
    NOTE
    N  Supplemental Guarantor Information
     12




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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
 September 30, 2006
  Combined


CombinedGuarantor


Non-Guarantor


Reclassifications/Parent


Subsidiaries


Subsidiaries


Eliminations


Consolidated(In thousands)ASSETSCurrent assets:Cash and cash equivalents

$
(41,314
)

$
27,377


$
10,347


$
20,237


$
16,647Accounts receivable, net


(300
)


161,203



23,456



-0-



184,359Inventories


-0-



188,476



31,450



-0-



219,926Other current assets


4,685



16,124



10,694



15,907



47,410Total Current Assets


(36,929
)


393,180



75,947



36,144



468,342Investment in subsidiaries


384,850



12,141



(12,141
)


(384,850
)


-0-Inter-company advances


322,179



469,610



1,761



(793,550
)


-0-Property, Plant and Equipment, net


1,037



93,267



14,506



-0-



108,810Other Assets:Goodwill


-0-



78,424



6,965



-0-



85,389Other


34,543



37,251



490



-0-



72,284Total Other Assets


34,543



115,675



7,455



-0-



157,673Total Assets

$
705,680


$
1,083,873


$
87,528


$
(1,142,256
)

$
734,825LIABILITIES AND
    SHAREHOLDERS EQUITYCurrent Liabilities:Trade accounts payable

$
1,844


$
101,534


$
11,029


$
22,243


$
136,650Accrued expenses


16,630



38,971



14,247



5,452



75,300Current portion of long-term
    liabilities


-0-



533



1,470



2,517



4,520Total Current Liabilities


18,474



141,038



26,746



30,212



216,470Long-Term Liabilities, less
    current portion8.375% Senior Subordinated
    Notes due 2014


210,000



-0-



-0-



-0-



210,000Revolving credit maturing on
    December 31, 2010


152,700



-0-



-0-



-0-



152,700Other long-term debt


-0-



3,233



2,206



-0-



5,439Other postretirement benefits and
    other long-term liabilities


2,958



52,667



2,458



(30,309
)


27,774Total Long-Term Liabilities


365,658



55,900



4,664



(30,309
)


395,913Inter-company advances


204,932



575,015



15,703



(795,650
)


-0-Shareholders Equity


116,616



311,920



40,415



(346,509
)


122,442Total Liabilities and
    Shareholders Equity

$
705,680


$
1,083,873


$
87,528


$
(1,142,256
)

$
734,825  13




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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


CombinedGuarantor


Non-Guarantor


Reclassifications/Parent


Subsidiaries


Subsidiaries


Eliminations


Consolidated(In thousands)ASSETSCurrent assets:Cash and cash equivalents

$
(11,036
)

$
626


$
11,899


$
16,379


$
17,868Accounts receivable, net


-0-



129,302



24,200



-0-



153,502Inventories


-0-



160,775



29,778



-0-



190,553Other current assets


464



20,029



1,147



6,113



27,753Deferred tax assets


-0-



-0-



-0-



8,627



8,627Total Current Assets


(10,572
)


310,732



67,024



31,119



398,303Investment 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-



113,102Other Assets:Goodwill


-0-



78,424



4,279



-0-



82,703Other


34,724



37,530



686



(2,323
)


70,617Total Other Assets


34,724



115,954



4,965



(2,323
)


153,320Total Assets

$
677,453


$
896,888


$
92,717


$
(1,002,333
)

$
664,725LIABILITIES AND
    SHAREHOLDERS EQUITYCurrent Liabilities:Trade accounts payable

$
3,348


$
87,666


$
9,778


$
14,604


$
115,396Accrued expenses


1,643



43,718



14,763



5,060



65,184Current portion of long-term
    liabilities


-0-



11,054



590



(7,483
)


4,161Total Current Liabilities


4,991



142,438



25,131



12,181



184,741Long-Term Liabilities, less
    current portion8.375% Senior Subordinated
    Notes due 2014


210,000



-0-



-0-



-0-



210,000Revolving credit maturing on
    December 31, 2010


128,300



-0-



-0-



-0-



128,300Other long-term debt


-0-



34,533



3,140



(30,968
)


6,705Deferred tax liability


-0-



-0-



-0-



3,176



3,176Other postretirement benefits and
    other long-term liabilities


4,115



21,501



3,076



(2,518
)


26,174Total Long-Term Liabilities


342,415



56,034



6,216



(30,310
)


374,355Inter-company advances


227,614



415,558



17,674



(660,846
)


-0-Shareholders Equity


102,433



282,858



43,696



(323,358
)


105,629Total Liabilities and
    Shareholders Equity

$
677,453


$
896,888


$
92,717


$
(1,002,333
)

$
664,725  14




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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
    CONSOLIDATING STATEMENT OF OPERATIONS
    For the Three Months Ended September 30, 2006
  Combined


CombinedGuarantor


Non-GuarantorParent


Subsidiaries


Subsidiaries


Eliminations


Consolidated(In thousands)Net sales

$
-0-


$
224,581


$
32,586


$
-0-


$
257,167Cost of sales


-0-



194,454



26,513



-0-



220,967Gross profit


-0-



30,127



6,073



-0-



36,200Operating Expenses:Selling, general and
    administrative expenses


5,630



16,833



2,981



(3,306
)


22,138Operating Income (loss)


(5,630
)


13,294



3,092



3,306



14,062Interest expense


(895
)


8,717



393



(150
)


8,065Income (loss) before income taxes


(4,735
)


4,577



2,699



3,456



5,997Income taxes


1,126



-0-



858



-0-



1,984Net income (loss)

$
(5,861
)

$
4,577


$
1,841


$
3,456


$
4,013   PARK-OHIO
    INDUSTRIES, INC. AND SUBSIDIARIES
    CONSOLIDATING STATEMENT OF OPERATIONS
    For the Three Months Ended September 30, 2005
  Combined


CombinedGuarantor


Non-GuarantorParent


Subsidiaries


Subsidiaries


Eliminations


Consolidated(In thousands)Net sales

$
-0-


$
207,428


$
29,498


$
(2,679
)

$
234,247Cost of sales


-0-



177,017



23,989



(2,679
)


198,327Gross profit


-0-



30,411



5,509



-0-



35,920Operating Expenses:Selling, general and
    administrative expenses


1,258



17,314



3,732



150



22,454Operating Income (loss)


(1,258
)


13,097



1,777



(150
)


13,466Interest expense


(934
)


7,524



760



(150
)


7,200Income (loss) before income taxes


(324
)


5,573



1,017



-0-



6,266Income taxes


540



-0-



211



-0-



751Net income (loss)

$
(864
)

$
5,573


$
806


$
-0-


$
5,515  15




---



##### Table of Contents



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 Nine Months Ended September 30, 2006
  Combined


CombinedGuarantor


Non-GuarantorParent


Subsidiaries


Subsidiaries


Eliminations


Consolidated(In thousands)Net sales

$
-0-


$
689,263


$
96,578


$
-0-


$
785,841Cost of sales


-0-



598,756



76,283



-0-



675,039Gross profit


-0-



90,507



20,295



-0-



110,802Operating Expenses:Selling, general and
    administrative expenses


6,975



51,115



10,460



(3,006
)


65,544Operating Income (loss)


(6,975
)


39,392



9,835



3,006



45,258Interest expense


(4,008
)


26,336



1,292



(450
)


23,170Income (loss) before income taxes


(2,967
)


13,056



8,543



3,456



22,088Income taxes


4,756



25



3,176



-0-



7,957Net income (loss)

$
(7,723
)

$
13,031


$
5,367


$
3,456


$
14,131   PARK-OHIO
    INDUSTRIES, INC. AND SUBSIDIARIES
    CONSOLIDATING STATEMENT OF OPERATIONS
    For the Nine Months Ended September 30, 2005
  Combined


CombinedGuarantor


Non-GuarantorParent


Subsidiaries


Subsidiaries


Eliminations


Consolidated(In thousands)Net sales

$
-0-


$
613,621


$
85,133


$
(6,829
)

$
691,925Cost of sales


-0-



523,886



68,486



(6,829
)


585,543Gross profit


-0-



89,735



16,647



-0-



106,382Operating Expenses:Selling, general and
    administrative expenses


3,771



49,965



10,091



450



64,277Operating Income (loss)


(3,771
)


39,770



6,556



(450
)


42,105Interest expense


(3,839
)


22,833



1,830



(450
)


20,374Income (loss) before income taxes


68



16,937



4,726



-0-



21,731Income taxes


25



-0-



2,235



-0-



2,260Net income (loss)

$
43


$
16,937


$
2,491


$
-0-


$
19,471  16




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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 STATEMENT OF CASH FLOWS
    For the Nine Months Ended September 30, 2006
  Combined


CombinedGuarantor


Non-GuarantorParent


Subsidiaries


Subsidiaries


Eliminations


Consolidated(In thousands)Net cash provided (used ) by
    operations

$
(52,092
)

$
33,659


$
4,861


$
-0-


$
(13,572
)Cash flows from investing
    activities:Purchases of property, plant and
    equipment, net


1,272



(6,055
)


(3,140
)


-0-



(7,923
)Acquisition, net of cash acquired


-0-



-0-



(3,219
)


-0-



(3,219
)Net cash provided (used) in
    investing activities


1,272



(6,055
)


(6,359
)


-0-



(11,142
)Cash flows from financing
    activities:Proceeds from revolving credit
    arrangements


24,400



-0-



-0-



-0-



24,400Principal payments on long-term
    debt


-0-



(853
)


(54
)


-0-



(907
)Net cash provided (used ) by
    financing activities


24,400



(853
)


(54
)


-0-



23,493Increase (decrease) in cash and
    cash equivalents


(26,420
)


26,751



(1,552
)


-0-



(1,221
)Cash and cash equivalents at
    beginning of period


5,343



626



11,899



-0-



17,868Cash and cash equivalents at end
    of period

$
(21,077
)

$
27,377


$
10,347


$
-0-


$
16,647  17




---



##### Table of Contents



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 Nine Months Ended September 30, 2005
  Combined


CombinedGuarantor


Non-GuarantorParent


Subsidiaries


Subsidiaries


Eliminations


Consolidated(In thousands)Net cash provided (used ) by
    operations

$
(52,663
)

$
53,194


$
3,430


$
-0-


$
3,961Cash flows from investing
    activities:Purchases of property, plant and
    equipment, net


(303
)


(11,082
)


(1,020
)


-0-



(12,405
)Acquisition, net of cash acquired


-0-



(5,807
)


(1,193
)


-0-



(7,000
)Proceeds from sale of assets held
    for sale


-0-



1,100



-0-



-0-



1,100Net cash used in investing
    activities


(303
)


(15,789
)


(2,213
)


-0-



(18,305
)Cash flows from financing
    activities:Proceeds from revolving credit
    arrangements


18,700



-0-



585



-0-



19,285Principal payments on long-term
    debt


-0-



(1,302
)


-0-



-0-



(1,302
)Net cash provided (used) by
    financing activities


18,700



(1,302
)


585



-0-



17,983Increase (decrease) in cash and
    cash equivalents


(34,266
)


36,103



1,802



-0-



3,639Cash and cash equivalents at
    beginning of period


(643
)


199



6,851



-0-



6,407Cash and cash equivalents at end
    of period

$
(34,909
)

$
36,302


$
8,653


$
-0-


$
10,046  18




---



##### Table of Contents



REPORT OF
    INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM                 19




---



##### Table of Contents



Item 2.
    Managements
    Discussion and Analysis of Financial Condition and Results of
    Operations    Executive
    Overview
  just-in-time
         20




---



##### Table of Contents



Results
    of Operations
  Nine
    Months 2006 versus Nine Months 2005 (Dollars in
    millions)
  Net
    Sales by Segment:
  Nine Months








Acquired/Ended September 30,





Percent


(Divested)2006


2005


Change


Change


SalesILS

$
449.6


$
394.2


$
55.4



14
%

$
28.0Aluminum products


120.9



122.8



(1.9
)


(2
)%


0.0Manufactured products


215.3



174.9



40.4



23
%


17.2Consolidated net sales

$
785.8


$
691.9


$
93.9



14
%

$
45.2     Cost
    of Products Sold & Gross Profit:
  Nine MonthsEnded September 30,





Percent2006


2005


Change


ChangeConsolidated cost of products sold

$
675.0


$
585.5


$
89.5



15
%Consolidated gross profit

$
110.8


$
106.4


$
4.4



4
%Gross margin


14.1
%


15.4
%   Quarter-to-quarter,
 21




---



##### Table of Contents



Selling,
    General & Administrative (SG&A)
    Expenses:
  Nine MonthsEnded September 30,





Percent2006


2005


Change


ChangeConsolidated SG&A expenses

$
65.5


$
64.3


$
1.2



2
%SG&A percent


8.3
%


9.3
%     Interest
    Expense:
  Nine MonthsEnded September 30,





Percent2006


2005


Change


ChangeInterest expense

$
23.2


$
20.4


$
2.8



14
%Average outstanding borrowings

$
372.2


$
358.2


$
14.0



4
%Average borrowing rate


8.30
%


7.58
%


72
basis points     Income
    Tax:
       22




---



##### Table of Contents



Third
    Quarter 2006 versus Third Quarter 2005 (Dollars in
    millions)
  Net
    Sales by Segment:
  Three Months








Acquired/Ended September 30,





Percent


(Divested)2006


2005


Change


Change


SalesILS

$
149.1


$
137.8


$
11.3



8
%

$
0.0Aluminum products


33.3



36.8



(3.5
)


(10
)%


0.0Manufactured products


74.8



59.6



15.2



26
%


5.8Consolidated net sales

$
257.2


$
234.2


$
23.0



10
%

$
5.8     Cost
    of Products Sold & Gross Profit:
  Three MonthsEnded September 30,





Percent2006


2005


Change


ChangeConsolidated cost of products sold

$
221.0


$
198.3


$
22.7



11
%Consolidated gross profit

$
36.2


$
35.9


$
0.3



1
%Gross margin


14.1
%


15.3
%     Quarter-to-quarter,
  SG&A
    Expenses:
  Three MonthsEnded September 30,





Percent2006


2005


Change


ChangeConsolidated SG&A expenses

$
22.1


$
22.5


$
(0.4
)


(2
)%SG&A percent


8.6
%


9.6
%    23




---



##### Table of Contents



Interest
    Expense:
  Three MonthsEnded September 30,





Percent2006


2005


Change


ChangeInterest expense

$
8.1


$
7.2


$
0.9



13
%Average outstanding borrowings

$
379.6


$
360.0


$
19.6



5
%Average borrowing rate


8.50
%


8.00
%


50
basis points     Income
    Tax:
        Seasonality;
    Variability of Operating Results
     24




---



##### Table of Contents



Forward-Looking
    Statements
  Form 10-Q
  Review By
    Independent Registered Public Accounting Firm
    Item 4.
    Controls
    and Procedures  Rules 13a-15(e)
     25




---



##### Table of Contents



PART II



OTHER
    INFORMATION  Item 1.
    Legal
    Proceedings             26




---



##### Table of Contents



Item 6.
    Exhibits    31
.1

Principal Executive Officers
    Certification Pursuant to Section 302 of the Sarbanes-Oxley
    Act of 200231
.2

Principal Financial Officers
    Certification Pursuant to Section 302 of the Sarbanes-Oxley
    Act of 200232


Certification requirement under
    Section 906 of the Sarbanes-Oxley Act of 2002  27




---



##### Table of Contents



SIGNATURE          By:
    /s/  Richard
    P. Elliott       28




---



##### Table of Contents



EXHIBIT INDEX



QUARTERLY
    REPORT ON
    FORM 10-Q  PARK-OHIO
    INDUSTRIES, INC. AND SUBSIDIARIES
    FOR THE QUARTER ENDED SEPTEMBER 30, 2006
  Exhibit31
.1

Principal Executive Officers
    Certification Pursuant to Section 302 of the Sarbanes-Oxley
    Act of 200231
.2

Principal Financial Officers
    Certification Pursuant to Section 302 of the Sarbanes-Oxley
    Act of 200232


Certification requirement under
    Section 906 of the Sarbanes-Oxley Act of 2002  29