##### 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 1934 
|          
|           |  | For the quarterly period ended March 31,
    2005                                           
|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.


The registrant meets the conditions set forth in
general instruction H(1)(a) and (b) of the Form 10-Q and is
therefore filing this form in reduced disclosure format.

Indicate by check mark whether the registrant:



|    |                                                                                                                                                                                                                                               
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(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 twelve 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

Indicate by check mark whether the registrant is
an accelerated filer (as defined in Exchange Act 
 Rule 12b-2).

Yes
o  No
þ

All of the outstanding capital stock of the
registrant is held by Park-Ohio Holdings Corp. As of
April 30, 2005, 100 shares of the registrants common
stock, $1 par value, were outstanding.

The Exhibit Index is located on page 24.



---






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PARK-OHIO INDUSTRIES, INC. AND
SUBSIDIARIES

INDEX






|                                          |  |                                                                                               |    |      |    | 
|----------------------------------------- |  | --------------------------------------------------------------------------------------------- | -- | ---- | -- | 
|                                          |  |                                                                                               |    | Page
|                                          |  |                                                                                               |    |     
|PART I. FINANCIAL
    INFORMATION        
|Item 1.                                   |  | Financial Statements                                                                          |    |      | 3  | 
|                                          |  | Consolidated balance
    sheets  March 31, 2005 and December 31, 2004                        |    |      | 3  | 
|                                          |  | Consolidated statements of
    income  Three months ended March 31, 2005 and 2004            |    |      | 4  | 
|                                          |  | Consolidated statement of
    shareholders equity 
    Three months ended March 31, 2005    |    |      | 5  | 
|                                          |  | Consolidated statements of
    cash flows 
    Three months ended March 31, 2005 and 2004    |    |      | 6  | 
|                                          |  | Notes to consolidated
    financial statements  March 31, 2005                               |    |      | 7  | 
|                                          |  | Report of independent
    registered public accounting firm                                   |    |      | 17 | 
|Item 2.                                   |  | Managements Discussion and Analysis of
    Financial Condition and
    Results of Operations |    |      | 18 | 
|Item 3.                                   |  | Quantitative and Qualitative Disclosure About
    Market Risk                                 |    |      | 21 | 
|Item 4.                                   |  | Controls and Procedures                                                                       |    |      | 21 | 
|PART II. OTHER
    INFORMATION           
|Item 6.                                   |  | Exhibits                                                                                      |    |      | 22 | 
|SIGNATURE                                 |  |                                                                                               | 23 |     
|EXHIBIT
    INDEX                         |  |                                                                                               | 24 |     
|EX-10.1 Summary of Annual Cash Bonus Plan
|EX-31.1 302 Certification                
|EX-31.2 302 Certification                
|EX-32 906 Certification                  



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)               |         |             
|                                                                                          |                                                                                                                                | March 31,                 |         | December 31,
|                                                                                          |                                                                                                                                | 2005                      |         | 2004        
|                                                                                          |                                                                                                                                |                           |         |             
|                                                                                          |                                                                                                                                |                          
|                                                                                          |                                                                                                                                | (Dollars in thousands)   
|ASSETS                                                                                    |                                                                                                                                |                           |         |              |         |   |         |        
|Current Assets                                                                            |                                                                                                                                |                           |         |              |         |   |         |        
|                                                                                          | Cash and cash equivalents                                                                                                      |                           | $       | 1,925        |         |   | $       | 6,407   |        
|                                                                                          | Accounts receivable, less allowances for doubtful
    accounts of $4,071 at March 31, 2005 and $3,976 at
    December 31, 2004 |                           |         | 167,523      |         |   |         | 145,475 |        
|                                                                                          | Inventories                                                                                                                    |                           |         | 185,733      |         |   |         | 177,294 |        
|                                                                                          | Other current assets                                                                                                           |                           |         | 21,725       |         |   |         | 20,655  |        
|                                                                                          |                                                                                                                                |                           |         |              |         |   |         |        
|                                                                                          |                                                                                                                                | Total Current Assets      |         |              | 376,906 |   |         |         | 349,831 | 
|Property, Plant and Equipment                                                             |                                                                                                                                |                           | 231,783 |              |         |   | 228,494 |        
|                                                                                          | Less accumulated depreciation                                                                                                  |                           |         | 122,298      |         |   |         | 118,613 |        
|                                                                                          |                                                                                                                                |                           |         |              |         |   |         |        
|                                                                                          |                                                                                                                                |                           | 109,485 |              |         |   | 109,881 |        
|Other Assets                                                                              |                                                                                                                                |                           |         |              |         |   |         |        
|                                                                                          | Goodwill                                                                                                                       |                           |         | 82,530       |         |   |         | 82,565  |        
|                                                                                          | Net assets held for sale                                                                                                       |                           |         | -0-          |         |   |         | 1,035   |        
|                                                                                          | Other                                                                                                                          |                           |         | 68,461       |         |   |         | 68,535  |        
|                                                                                          |                                                                                                                                |                           |         |              |         |   |         |        
|                                                                                          |                                                                                                                                | $                         | 637,382 |              |         | $ | 611,847 |        
|                                                                                          |                                                                                                                                |                           |         |              |         |   |         |        
|LIABILITIES AND SHAREHOLDERS
    EQUITY                                                  |                                                                                                                                |                           |         |              |         |   |         |        
|Current Liabilities                                                                       |                                                                                                                                |                           |         |              |         |   |         |        
|                                                                                          | Trade accounts payable                                                                                                         |                           | $       | 99,667       |         |   | $       | 108,862 |        
|                                                                                          | Accrued expenses                                                                                                               |                           |         | 69,554       |         |   |         | 59,745  |        
|                                                                                          | Current portion of long-term liabilities                                                                                       |                           |         | 6,357        |         |   |         | 5,812   |        
|                                                                                          |                                                                                                                                |                           |         |              |         |   |         |        
|                                                                                          |                                                                                                                                | Total Current Liabilities |         |              | 175,578 |   |         |         | 174,419 | 
|Long-Term Liabilities, less current portion
    8.375% Senior Subordinated Notes due 2014 |                                                                                                                                |                           | 210,000 |              |         |   | 210,000 |        
|                                                                                          | Revolving credit                                                                                                               |                           |         | 139,400      |         |   |         | 120,600 |        
|                                                                                          | Other long-term debt                                                                                                           |                           |         | 4,626        |         |   |         | 4,776   |        
|                                                                                          | Other postretirement benefits and other long-term
    liabilities                                                              |                           |         | 26,688       |         |   |         | 27,570  |        
|                                                                                          |                                                                                                                                |                           |         |              |         |   |         |        
|                                                                                          |                                                                                                                                |                           | 380,714 |              |         |   | 362,946 |        
|Shareholders Equity                                                                      |                                                                                                                                |                           |         |              |         |   |         |        
|                                                                                          | Common Stock                                                                                                                   |                           |         | -0-          |         |   |         | -0-     |        
|                                                                                          | Additional paid-in capital                                                                                                     |                           |         | 64,844       |         |   |         | 64,844  |        
|                                                                                          | Retained earnings                                                                                                              |                           |         | 17,593       |         |   |         | 11,314  |        
|                                                                                          | Accumulated other comprehensive loss                                                                                           |                           |         | (1,347       | )       |   |         | (1,676  | )      
|                                                                                          |                                                                                                                                |                           |         |              |         |   |         |        
|                                                                                          |                                                                                                                                |                           | 81,090  |              |         |   | 74,482  |        
|                                                                                          |                                                                                                                                |                           |         |              |         |   |         |        
|                                                                                          |                                                                                                                                | $                         | 637,382 |              |         | $ | 611,847 |        
|                                                                                          |                                                                                                                                |                           |         |              |         |   |         |        



|      |                                                                                                                                                                                                                                                                              
|----- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Note: | The balance sheet at December 31, 2004 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.

See notes to consolidated financial statements.

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PARK-OHIO INDUSTRIES, INC. AND
SUBSIDIARIES



CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)


|                                             |                            |                        |         |        |  |   |         |        | 
|-------------------------------------------- | -------------------------- | ---------------------- | ------- | ------ |  | - | ------- | ------ | 
|                                             |                            |                       
|                                             |                            | Three Months Ended    
|                                             |                            | March 31,             
|                                             |                            |                       
|                                             |                            | 2005                   |         | 2004  
|                                             |                            |                        |         |       
|                                             |                            |                       
|                                             |                            | (Amounts in thousands 
|                                             |                            | except per share data)
|Net sales                                    |                            | $                      | 228,883 |        |  | $ | 192,370 |       
|Cost of products sold                        |                            |                        | 193,787 |        |  |   | 162,133 |       
|                                             |                            |                        |         |        |  |   |         |       
|                                             | Gross profit               |                        |         | 35,096 |  |   |         | 30,237 | 
|Selling, general and administrative expenses |                            |                        | 21,559  |        |  |   | 17,642  |       
|                                             |                            |                        |         |        |  |   |         |       
|                                             | Operating income           |                        |         | 13,537 |  |   |         | 12,595 | 
|Interest expense                             |                            |                        | 6,459   |        |  |   | 6,136   |       
|                                             |                            |                        |         |        |  |   |         |       
|                                             | Income before income taxes |                        |         | 7,078  |  |   |         | 6,459  | 
|Income taxes                                 |                            |                        | 799     |        |  |   | 591     |       
|                                             |                            |                        |         |        |  |   |         |       
|                                             | Net income                 |                        | $       | 6,279  |  |   | $       | 5,868  | 
|                                             |                            |                        |         |        |  |   |         |       

See notes to consolidated financial statements.

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PARK-OHIO INDUSTRIES, INC. AND
SUBSIDIARIES

CONSOLIDATED STATEMENT OF SHAREHOLDERS
EQUITY

|                           |                                         |                        |     |            |  |          |        |               |  |       |        |       |  |   |        |     |  |   |        |       | 
|-------------------------- | --------------------------------------- | ---------------------- | --- | ---------- |  | -------- | ------ | ------------- |  | ----- | ------ | ----- |  | - | ------ | --- |  | - | ------ | ----- | 
|                           |                                         |                        |     |            |  |          |        | Accumulated   |  |      
|                           |                                         |                        |     | Additional |  |          |        | Other         |  |      
|                           |                                         | Common                 |     | Paid-In    |  | Retained |        | Comprehensive |  |      
|                           |                                         | Stock                  |     | Capital    |  | Earnings |        | Income (Loss) |  | Total
|                           |                                         |                        |     |            |  |          |        |               |  |      
|                           |                                         |                       
|                           |                                         | (Dollars in thousands)
|Balance at January 1, 2005 |                                         | $                      | -0- |            |  | $        | 64,844 |               |  | $     | 11,314 |       |  | $ | (1,676 | )   |  | $ | 74,482 |      
|Comprehensive income:      |                                         |                        |     |            |  |          |        |               |  |       |        |       |  |   |        |     |  |   |        |      
|                           | Net income                              |                        |     |            |  |          |        |               |  |       |        | 6,279 |  |   |        |     |  |   |        | 6,279 | 
|                           | Foreign currency translation adjustment |                        |     |            |  |          |        |               |  |       |        |       |  |   |        | 329 |  |   |        | 329   | 
|                           |                                         |                        |     |            |  |          |        |               |  |       |        |       |  |   |        |     |  |   |        |      
|                           | Comprehensive income                    |                        |     |            |  |          |        |               |  |       |        |       |  |   |        |     |  |   |        | 6,608 | 
|                           |                                         |                        |     |            |  |          |        |               |  |       |        |       |  |   |        |     |  |   |        |      
|Balance at March 31, 2005  |                                         | $                      | -0- |            |  | $        | 64,844 |               |  | $     | 17,593 |       |  | $ | (1,347 | )   |  | $ | 81,090 |      
|                           |                                         |                        |     |            |  |          |        |               |  |       |        |       |  |   |        |     |  |   |        |      

See notes to consolidated financial statements.

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PARK-OHIO INDUSTRIES, INC. AND
SUBSIDIARIES




CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)

|                                                 |                                                                                   |                                           |                                       |        |         |         |        |        |         |        |  
|------------------------------------------------ | --------------------------------------------------------------------------------- | ----------------------------------------- | ------------------------------------- | ------ | ------- | ------- | ------ | ------ | ------- | ------ | -
|                                                 |                                                                                   |                                          
|                                                 |                                                                                   | Three Months Ended                       
|                                                 |                                                                                   | March 31,                                
|                                                 |                                                                                   |                                          
|                                                 |                                                                                   | 2005                                      |                                       | 2004  
|                                                 |                                                                                   |                                           |                                       |       
|                                                 |                                                                                   |                                          
|                                                 |                                                                                   | (Dollars in thousands)                   
|OPERATING ACTIVITIES                             |                                                                                   |                                           |                                       |        |         |         |        |       
|                                                 | Net income                                                                        |                                           | $                                     | 6,279  |         |         | $      | 5,868  |        
|                                                 | Adjustments to reconcile net income to net cash
    used by operating activities: |                                           |                                       |        |         |         |        |        |        
|                                                 |                                                                                   | Depreciation and amortization             |                                       |        | 4,447   |         |        |        | 3,947   |       
|                                                 | Changes in operating assets and liabilities:                                      |                                           |                                       |        |         |         |        |        |        
|                                                 |                                                                                   | Accounts receivable                       |                                       |        | (22,049 | )       |        |        | (29,056 | )     
|                                                 |                                                                                   | Inventories and other current assets      |                                       |        | (9,509  | )       |        |        | (2,259  | )     
|                                                 |                                                                                   | Accounts payable and accrued expenses     |                                       |        | 613     |         |        |        | 20,367  |       
|                                                 |                                                                                   | Other                                     |                                       |        | (1,000  | )       |        |        | (2,200  | )     
|                                                 |                                                                                   |                                           |                                       |        |         |         |        |       
|                                                 |                                                                                   |                                           | Net Cash Used by Operating Activities |        |         | (21,219 | )      |        |         | (3,333 | )
|                                                
|INVESTING ACTIVITIES                             |                                                                                   |                                           |                                       |        |         |         |        |       
|                                                 | Purchases of property, plant and equipment, net                                   |                                           |                                       | (3,559 | )       |         |        | (2,203 | )      
|                                                 | Proceeds from sale of assets held for sale                                        |                                           |                                       | 1,100  |         |         |        | -0-    |        
|                                                 |                                                                                   |                                           |                                       |        |         |         |        |       
|                                                 |                                                                                   | Net Cash Used by Investing Activities     |                                       |        | (2,459  | )       |        |        | (2,203  | )     
|                                                
|FINANCING ACTIVITIES                             |                                                                                   |                                           |                                       |        |         |         |        |       
|                                                 | Proceeds from debt, net                                                           |                                           |                                       | 19,196 |         |         |        | 3,539  |        
|                                                 |                                                                                   |                                           |                                       |        |         |         |        |       
|                                                 |                                                                                   | Net Cash Provided by Financing Activities |                                       |        | 19,196  |         |        |        | 3,539   |       
|                                                 |                                                                                   |                                           |                                       |        |         |         |        |       
|Decrease in Cash and Cash Equivalents            |                                                                                   |                                           | (4,482                                | )      |         |         | (1,997 | )     
|Cash and Cash Equivalents at Beginning of Period |                                                                                   |                                           | 6,407                                 |        |         |         | 2,191  |       
|                                                 |                                                                                   |                                           |                                       |        |         |         |        |       
|Cash and Cash Equivalents at End of Period       |                                                                                   | $                                         | 1,925                                 |        |         | $       | 194    |       
|                                                 |                                                                                   |                                           |                                       |        |         |         |        |       
|Taxes paid                                       |                                                                                   | $                                         | 744                                   |        |         | $       | 534    |       
|Interest paid                                    |                                                                                   |                                           | 1,431                                 |        |         |         | 1,628  |       

See notes to consolidated financial statements.

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PARK-OHIO INDUSTRIES, INC. AND
SUBSIDIARIES



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)


March 31, 2005

(Amounts in thousands)


NOTE A  Basis of
Presentation

The consolidated financial statements include the
accounts of Park-Ohio Industries, Inc. and its subsidiaries
(Park-Ohio or the Company). Park-Ohio is
a wholly-owned subsidiary of Park-Ohio Holdings Corp. All
significant intercompany transactions have been eliminated in
consolidation.

The accompanying unaudited consolidated financial
statements have been prepared in accordance with accounting
principles generally accepted for interim financial information
and with the instructions to Form 10-Q and Article 10
of Regulation S-X. Accordingly, they do not include all of
the information and footnotes required by accounting principles
generally accepted in the United States for complete financial
statements. In the opinion of management, all adjustments
(consisting of normal recurring accruals) considered necessary
for a fair presentation have been included. Operating results
for the three-month period ended March 31, 2005 are not
necessarily indicative of the results that may be expected for
the year ending December 31, 2005. For further information,
refer to the consolidated financial statements and footnotes
thereto included in the Companys Annual Report on
Form 10-K for the year ended December 31, 2004.

NOTE B  Recent Accounting
Pronouncements

In the fourth quarter of 2004, the Financial
Accounting Standards Board (FASB) issued
SFAS No. 151, Inventory Costs, an
amendment of Accounting Research Bulletin No. 43,
Chapter 4. The amendments made by SFAS No. 151
clarify that abnormal amounts of idle facility expense, freight,
handling costs and wasted materials (spoilage) are to be
recognized as current-period charges and will require the
allocation of fixed production overheads to inventory based on
the normal capacity of the production facilities. The guidance
is effective for inventory costs incurred during fiscal years
beginning after June 15, 2005. Earlier application is
permitted for inventory costs incurred during fiscal years
beginning after November 23, 2004. The Company expects the
adoption to have an insignificant impact on its consolidated
financial position, results of operations, or cash flows.

The American Jobs Creation Act of 2004 (the
Jobs Act) was signed into law in October 2004. The
Jobs Act provides, among other things, for a tax deduction on
qualified domestic production activities and introduced a
special one-time dividends received deduction on the
repatriation of certain foreign earnings to a U.S. taxpayer,
provided certain criteria are met. The FASB issued FASB Staff
Position 109-1 to provide guidance on the application of FAS 109
and FASB Staff Position 109-2 to provide accounting and
disclosure guidance for the repatriation provision. The Company
is reviewing the implication of the Jobs Act, recently released
treasury guidance and the FASB staff positions and does not
expect the Jobs Act will have a material impact on the
Companys financial position, results of operations or cash
flows.

In December 2004, the FASB issued
SFAS No. 153, Exchanges of Nonmonetary Assets,
an amendment of APB Opinion No. 29.
SFAS No. 153 is based on the principle that exchanges
of nonmonetary assets should be measured on the fair value of
the assets exchanged. APB Opinion No. 29, Accounting
for Nonmonetary Transactions, provided an exception to its
basic principle (fair value) for exchanges of similar productive
assets. Under APB Opinion No. 29, an exchange of a
productive asset for a similar productive asset was based on the
recorded amount of the asset relinquished.
SFAS No. 153 eliminates this exception and replaces it
with an exception of exchanges of nonmonetary assets that do not
have commercial substance. SFAS No. 153 is effective
for the Company as of July 1, 2005. The Company will apply
the requirements of SFAS No. 153 prospectively.

In March 2005, the FASB issued FASB
Interpretation No. 47, Accounting for Conditional
Asset Retirement Obligations. This interpretation requires
companies to recognize a liability for the fair value of a legal
obligation to perform asset retirement activities that are
conditional on a future event if the amount can be

7



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PARK-OHIO INDUSTRIES, INC. AND
SUBSIDIARIES


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

reasonably estimated. This interpretation is
effective for year end December 31, 2005. The Company is
currently evaluating the impact of this interpretation.

NOTE C  Acquisitions

On August 23, 2004, the Company acquired
substantially all of the assets of the Automotive Components
Group (the Amcast Components Group) of Amcast
Industrial Corporation. The purchase price was approximately
$10.0 million in cash and the assumption of approximately
$9.0 million of operating liabilities. The acquisition was
funded with borrowings under the Companys revolving credit
facility. The purchase price and the results of operations of
Amcast Components Group prior to its date of acquisition were
not deemed significant as defined in Regulation S-X. The
results of operations for Amcast Components Group have been
included in the Companys consolidated results since
August 23, 2004.

The tentative allocation of the purchase price
has been performed based on the assignment of fair values to
assets acquired and liabilities assumed.

The tentative allocation of the purchase price is
as follows:

|                       |                        |   |        |         |  
|---------------------- | ---------------------- | - | ------ | ------- | -
|Cash acquisition price |                        | $ | 10,000 |        
|Assets                 |                        |   |        |        
|                       | Accounts receivable    |   |        | (8,931  | )
|                       | Inventories            |   |        | (1,677  | )
|                       | Property and equipment |   |        | (16,964 | )
|                       | Other                  |   |        | (115    | )
|                      
|Liabilities            |                        |   |        |        
|                       | Accounts payable       |   |        | 4,041   |  
|                       | Compensation accruals  |   |        | 5,504   |  
|                       | Other accruals         |   |        | 8,142   |  
|                       |                        |   |        |        
|Goodwill               |                        | $ | -0-    |        
|                       |                        |   |        |        

The Company has a plan for integration activities
and plant rationalization. In accordance with FASB EITF Issue
No. 95-3, Recognition of Liabilities in Connection
with a Purchase Business Combination, the Company recorded
accruals for severance, exit and relocation costs in the
purchase price allocation. A reconciliation of the beginning and
ending accrual balances is as follows:

|                             |  |           |       |      |  |            |     |       |  |   |     |  |  |   |       | 
|---------------------------- |  | --------- | ----- | ---- |  | ---------- | --- | ----- |  | - | --- |  |  | - | ----- | 
|                             |  | Severance |       | Exit |  | Relocation |     | Total
|                             |  |           |       |      |  |            |     |      
|Balance at June 30, 2004     |  | $         | -0-   |      |  | $          | -0- |       |  | $ | -0- |  |  | $ | -0-   | 
|Add: Accruals                |  |           | 1,916 |      |  |            | 100 |       |  |   | 265 |  |  |   | 2,281 | 
|Less: Payments               |  |           | 295   |      |  |            | -0- |       |  |   | 2   |  |  |   | 297   | 
|                             |  |           |       |      |  |            |     |       |  |   |     |  |  |   |       | 
|Balance at December 31, 2004 |  |           | 1,621 |      |  |            | 100 |       |  |   | 263 |  |  |   | 1,984 | 
|Less: Payments               |  |           | 251   |      |  |            | 8   |       |  |   | 39  |  |  |   | 298   | 
|                             |  |           |       |      |  |            |     |       |  |   |     |  |  |   |       | 
|Balance at March 31, 2005    |  | $         | 1,370 |      |  | $          | 92  |       |  | $ | 224 |  |  | $ | 1,686 | 
|                             |  |           |       |      |  |            |     |       |  |   |     |  |  |   |       | 

On April 1, 2004, the Company acquired the
remaining 66% of the common stock of Japan Ajax Magnethermic
Company (Jamco) for cash existing on the balance
sheet of Jamco at that date. No additional purchase price was
paid by the Company. The purchase price and the results of
operations of Jamco prior to its date of acquisition were not
deemed significant as defined in Regulation S-X.

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PARK-OHIO INDUSTRIES, INC. AND
SUBSIDIARIES


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

NOTE D  Inventories

The components of inventory consist of the
following:

|                           |  |           |         |              |  |   |         | 
|-------------------------- |  | --------- | ------- | ------------ |  | - | ------- | 
|                           |  | March 31, |         | December 31,
|                           |  | 2005      |         | 2004        
|                           |  |           |         |             
|Finished goods             |  | $         | 126,925 |              |  | $ | 121,832 | 
|Work in process            |  |           | 30,350  |              |  |   | 27,959  | 
|Raw materials and supplies |  |           | 28,458  |              |  |   | 27,503  | 
|                           |  |           |         |              |  |   |         | 
|                           |  | $         | 185,733 |              |  | $ | 177,294 | 
|                           |  |           |         |              |  |   |         | 

NOTE E  Pension Plans and Other
Postretirement Benefits

Effective December 31, 2003, the Company
adopted SFAS No. 132 (revised 2003),
Employers Disclosures about Pensions and Other
Postretirement Benefits. This standard requires the
disclosure of the components of net periodic benefit cost
recognized during interim periods.

|                                     |  |                  |        |                |  |      |        |      |  |   |     |   |  |   |     |  
|------------------------------------ |  | ---------------- | ------ | -------------- |  | ---- | ------ | ---- |  | - | --- | - |  | - | --- | -
|                                     |  |                  |        |                |  |     
|                                     |  |                  |        | Postretirement
|                                     |  | Pension Benefits |        | Benefits      
|                                     |  |                  |        |               
|                                     |  | 2005             |        | 2004           |  | 2005 |        | 2004
|                                     |  |                  |        |                |  |      |        |     
|Service costs                        |  | $                | 97     |                |  | $    | 78     |      |  | $ | 35  |   |  | $ | 40  |  
|Interest costs                       |  |                  | 796    |                |  |      | 834    |      |  |   | 348 |   |  |   | 421 |  
|Expected return on plan assets       |  |                  | (2,211 | )              |  |      | (2,093 | )    |  |   | -0- |   |  |   | -0- |  
|Transition obligation                |  |                  | (12    | )              |  |      | (12    | )    |  |   | -0- |   |  |   | -0- |  
|Amortization of prior service cost   |  |                  | 41     |                |  |      | 32     |      |  |   | (17 | ) |  |   | (20 | )
|Recognized net actuarial (gain) loss |  |                  | (60    | )              |  |      | (81    | )    |  |   | 50  |   |  |   | 59  |  
|                                     |  |                  |        |                |  |      |        |      |  |   |     |   |  |   |     |  
|Benefit (income) costs               |  | $                | (1,349 | )              |  | $    | (1,242 | )    |  | $ | 416 |   |  | $ | 500 |  
|                                     |  |                  |        |                |  |      |        |      |  |   |     |   |  |   |     |  

NOTE F  Segments

The Company operates through three segments:
Integrated Logistics Solutions (ILS), Aluminum
Products and Manufactured Products. ILS is a leading supply
chain logistics provider of production components to large,
multinational manufacturing companies, other manufacturers and
distributors. In connection with the supply of such production
components, ILS provides a variety of value-added,
cost-effective supply chain management services. Aluminum
Products manufactures cast aluminum components for automotive,
agricultural equipment, heavy-duty truck and construction
equipment. Aluminum Products also provides value-added services
such as design and engineering, machining and assembly.
Manufactured Products operates a diverse group of niche
manufacturing businesses that design and manufacture a broad
range of high quality products engineered for specific customer
applications.

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PARK-OHIO INDUSTRIES, INC. AND
SUBSIDIARIES


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

Results by business segment were as follows:

|                            |                       |                    |         |         |  |   |         |         | 
|--------------------------- | --------------------- | ------------------ | ------- | ------- |  | - | ------- | ------- | 
|                            |                       |                   
|                            |                       | Three Months Ended
|                            |                       | March 31,         
|                            |                       |                   
|                            |                       | 2005               |         | 2004   
|                            |                       |                    |         |        
|Net sales:                  |                       |                    |         |         |  |   |         |        
|                            | ILS                   |                    | $       | 126,887 |  |   | $       | 116,265 | 
|                            | Aluminum products     |                    |         | 42,890  |  |   |         | 27,581  | 
|                            | Manufactured products |                    |         | 59,106  |  |   |         | 48,524  | 
|                            |                       |                    |         |         |  |   |         |        
|                            |                       | $                  | 228,883 |         |  | $ | 192,370 |        
|                            |                       |                    |         |         |  |   |         |        
|Income before income taxes: |                       |                    |         |         |  |   |         |        
|                            | ILS                   |                    | $       | 8,204   |  |   | $       | 9,209   | 
|                            | Aluminum products     |                    |         | 2,423   |  |   |         | 1,587   | 
|                            | Manufactured products |                    |         | 5,813   |  |   |         | 3,292   | 
|                            |                       |                    |         |         |  |   |         |        
|                            |                       |                    | 16,440  |         |  |   | 14,088  |        
|Corporate costs             |                       |                    | (2,903  | )       |  |   | (1,493  | )      
|Interest expense            |                       |                    | (6,459  | )       |  |   | (6,136  | )      
|                            |                       |                    |         |         |  |   |         |        
|                            |                       | $                  | 7,078   |         |  | $ | 6,459   |        
|                            |                       |                    |         |         |  |   |         |        

|                                     |                       |           |         |          |  |   |         |         | 
|------------------------------------ | --------------------- | --------- | ------- | -------- |  | - | ------- | ------- | 
|                                     |                       | March 31, |         | December
|                                     |                       | 2005      |         | 31, 2004
|                                     |                       |           |         |         
|Identifiable assets were as follows: |                       |           |         |          |  |   |         |        
|                                     | ILS                   |           | $       | 319,231  |  |   | $       | 297,002 | 
|                                     | Aluminum products     |           |         | 109,437  |  |   |         | 105,535 | 
|                                     | Manufactured products |           |         | 171,364  |  |   |         | 163,230 | 
|                                     | General corporate     |           |         | 37,350   |  |   |         | 46,080  | 
|                                     |                       |           |         |          |  |   |         |        
|                                     |                       | $         | 637,382 |          |  | $ | 611,847 |        
|                                     |                       |           |         |          |  |   |         |        

NOTE G  Comprehensive
Income

Total comprehensive income was as follows:

|                             |  |                 |       |      |  |   |       | 
|---------------------------- |  | --------------- | ----- | ---- |  | - | ----- | 
|                             |  |                
|                             |  | Three Months   
|                             |  | Ended March 31,
|                             |  |                
|                             |  | 2005            |       | 2004
|                             |  |                 |       |     
|Net income                   |  | $               | 6,279 |      |  | $ | 5,868 | 
|Foreign currency translation |  |                 | 329   |      |  |   | 814   | 
|                             |  |                 |       |      |  |   |       | 
|Total comprehensive income   |  | $               | 6,608 |      |  | $ | 6,682 | 
|                             |  |                 |       |      |  |   |       | 

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PARK-OHIO INDUSTRIES, INC. AND
SUBSIDIARIES


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

The components of accumulated comprehensive loss
at March 31, 2005 and December 31, 2004 are as follows:

|                                        |  |           |        |              |  |   |        |  
|--------------------------------------- |  | --------- | ------ | ------------ |  | - | ------ | -
|                                        |  | March 31, |        | December 31,
|                                        |  | 2005      |        | 2004        
|                                        |  |           |        |             
|Foreign currency translation adjustment |  | $         | (3,491 | )            |  | $ | (3,162 | )
|Minimum pension liability               |  |           | 4,838  |              |  |   | 4,838  |  
|                                        |  |           |        |              |  |   |        |  
|                                        |  | $         | 1,347  |              |  | $ | 1,676  |  
|                                        |  |           |        |              |  |   |        |  

NOTE H  Restructuring
Activities

Since 2001, the Company has responded to the
economic downturn by reducing costs in a variety of ways,
including restructuring businesses and selling non-core
manufacturing assets. These activities generated restructuring
and asset impairment charges in 2001, 2002 and 2003, as the
Companys restructuring efforts continued and evolved. For
further details on the restructuring activities, see Note N
to the audited financial statements contained in the
Companys Annual Report on Form 10-K for the year
ended December 31, 2004.

The accrued liability balance for severance and
exit costs and related cash payments during the three months
ended March 31, 2005 and 2004 consisted of:

|                     |  |      |     |      |  |   |       |  
|-------------------- |  | ---- | --- | ---- |  | - | ----- | -
|                     |  | 2005 |     | 2004
|                     |  |      |     |     
|Balance at January 1 |  | $    | 462 |      |  | $ | 2,535 |  
|Cash payments        |  |      | (53 | )    |  |   | (234  | )
|                     |  |      |     |      |  |   |       |  
|Balance at March 31  |  | $    | 409 |      |  | $ | 2,301 |  
|                     |  |      |     |      |  |   |       |  

NOTE I  Accrued Warranty
Costs

The Company estimates the amount of warranty
claims on sold products that may be incurred based on current
and historical data. The actual warranty expense could differ
from the estimates made by the Company based on product
performance. The following table presents the changes in the
Companys product warranty liability:

|                           |                                                 |   |       |      |  
|-------------------------- | ----------------------------------------------- | - | ----- | ---- | -
|Balance at January 1, 2005 |                                                 | $ | 4,281 |     
|                           | Claims paid during the quarter                  |   |       | (681 | )
|                           | Additional warranties issued during the quarter |   |       | 432  |  
|                           |                                                 |   |       |     
|Balance at March 31, 2005  |                                                 | $ | 4,032 |     
|                           |                                                 |   |       |     

NOTE J  Income Taxes

The effective income tax rate for the three-month
period ended March 31, 2005 was 11%, compared to 9% for the
corresponding period in 2004. Only foreign and state income
taxes were provided for in both periods, because federal income
taxes were offset by net operating loss carryforwards that were
not recognized previously. At December 31, 2004, the
Company had net operating loss carryforwards of approximately
$47.7 million. In accordance with the provisions of
SFAS No. 109 Accounting for Income Taxes
(FAS 109), the tax benefits related to these
carryforwards and other deferred tax assets have been reserved
as of December 31, 2004. The Company believes, based on the
weight of available evidence, it is more likely than not that
all of the Companys deferred tax assets will not be
realized as required by FAS 109.

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PARK-OHIO INDUSTRIES, INC. AND
SUBSIDIARIES


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

NOTE K  Supplemental Guarantor
Information

Each of the material domestic direct and indirect
wholly-owned subsidiaries of the Company (the Guarantor
Subsidiaries) has fully and unconditionally guaranteed, on
a joint and several basis, to pay principal, premium and
interest with respect to the Companys 8.375% Senior
Subordinated Notes due 2014. Each of the Guarantor Subsidiaries
is 100% owned as defined by Rule 3-10(h)(1) of
Regulation S-X.

The following supplemental consolidating
condensed financial statements present consolidating condensed
balance sheets as of March 31, 2005 and December 31,
2004, consolidating condensed statements of income for the three
months ended March 31, 2005 and 2004, consolidating
condensed statements of cash flows for the three months ended
March 31, 2005 and 2004 and reclassification and
elimination entries necessary to consolidate the Parent and all
of its subsidiaries. The Parent reflected in the
accompanying supplemental guarantor information is Park-Ohio
Industries.

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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


March 31, 2005


|                                            |                                                                   |                                            |         |              |         |               |         |                    |         |              |        |        |        |  |          |         |          |   |         |         |         | 
|------------------------------------------- | ----------------------------------------------------------------- | ------------------------------------------ | ------- | ------------ | ------- | ------------- | ------- | ------------------ | ------- | ------------ | ------ | ------ | ------ |  | -------- | ------- | -------- | - | ------- | ------- | ------- | 
|                                            |                                                                   |                                            |         | Combined     |         | Combined      |         |                    |         |             
|                                            |                                                                   |                                            |         | Guarantor    |         | Non-Guarantor |         | Reclassifications/ |         |             
|                                            |                                                                   | Parent                                     |         | Subsidiaries |         | Subsidiaries  |         | Eliminations       |         | Consolidated
|                                            |                                                                   |                                            |         |              |         |               |         |                    |         |             
|                                            |                                                                   |                                           
|                                            |                                                                   | (In thousands)                            
|ASSETS                                     
|Current assets:                             |                                                                   |                                            |         |              |         |               |         |                    |         |              |        |        |        |  |          |         |          |   |         |        
|                                            | Cash and cash equivalents                                         |                                            | $       | (8,479       | )       |               | $       | 4,761              |         |              | $      | 5,643  |        |  | $        | -0-     |          |   | $       | 1,925   |        
|                                            | Accounts receivable, net                                          |                                            |         | -0-          |         |               |         | 138,249            |         |              |        | 28,381 |        |  |          | 893     |          |   |         | 167,523 |        
|                                            | Inventories                                                       |                                            |         | -0-          |         |               |         | 159,102            |         |              |        | 26,631 |        |  |          | -0-     |          |   |         | 185,733 |        
|                                            | Other current assets                                              |                                            |         | 1,232        |         |               |         | 10,686             |         |              |        | 3,752  |        |  |          | 6,055   |          |   |         | 21,725  |        
|                                            |                                                                   |                                            |         |              |         |               |         |                    |         |              |        |        |        |  |          |         |          |   |         |        
|                                            |                                                                   | Total Current Assets                       |         |              | (7,247  | )             |         |                    | 312,798 |              |        |        | 64,407 |  |          |         | 6,948    |   |         |         | 376,906 | 
|Investment in subsidiaries                  |                                                                   |                                            | 337,394 |              |         |               | -0-     |                    |         |              | -0-    |        |        |  | (337,394 | )       |          |   | -0-     |        
|Inter-company advances                      |                                                                   |                                            | 260,224 |              |         |               | 248,190 |                    |         |              | 5,963  |        |        |  | (514,377 | )       |          |   | -0-     |        
|Property, Plant and Equipment, net          |                                                                   |                                            | 2,270   |              |         |               | 95,221  |                    |         |              | 11,994 |        |        |  | -0-      |         |          |   | 109,485 |        
|Other Assets:                               |                                                                   |                                            |         |              |         |               |         |                    |         |              |        |        |        |  |          |         |          |   |         |        
|                                            | Goodwill                                                          |                                            |         | -0-          |         |               |         | 78,424             |         |              |        | 4,106  |        |  |          | -0-     |          |   |         | 82,530  |        
|                                            | Other                                                             |                                            |         | 43,977       |         |               |         | 37,642             |         |              |        | 1,333  |        |  |          | (14,491 | )        |   |         | 68,461  |        
|                                            |                                                                   |                                            |         |              |         |               |         |                    |         |              |        |        |        |  |          |         |          |   |         |        
|                                            |                                                                   | Total Other Assets                         |         |              | 43,977  |               |         |                    | 116,066 |              |        |        | 5,439  |  |          |         | (14,491  | ) |         |         | 150,991 | 
|                                            |                                                                   |                                            |         |              |         |               |         |                    |         |              |        |        |        |  |          |         |          |   |         |        
|                                            |                                                                   | Total Assets                               |         | $            | 636,618 |               |         | $                  | 772,275 |              |        | $      | 87,803 |  |          | $       | (859,314 | ) |         | $       | 637,382 | 
|                                            |                                                                   |                                            |         |              |         |               |         |                    |         |              |        |        |        |  |          |         |          |   |         |        
|                                           
|LIABILITIES AND SHAREHOLDERS
    EQUITY   
|Current Liabilities:                        |                                                                   |                                            |         |              |         |               |         |                    |         |              |        |        |        |  |          |         |          |   |         |        
|                                            | Trade accounts payable                                            |                                            | $       | 769          |         |               | $       | 100,646            |         |              | $      | 9,525  |        |  | $        | (11,273 | )        |   | $       | 99,667  |        
|                                            | Accrued expenses                                                  |                                            |         | 13,385       |         |               |         | 45,205             |         |              |        | 11,029 |        |  |          | (65     | )        |   |         | 69,554  |        
|                                            | Current portion of long-term liabilities                          |                                            |         | -0-          |         |               |         | 531                |         |              |        | 2,945  |        |  |          | 2,881   |          |   |         | 6,357   |        
|                                            |                                                                   |                                            |         |              |         |               |         |                    |         |              |        |        |        |  |          |         |          |   |         |        
|                                            |                                                                   | Total Current Liabilities                  |         |              | 14,154  |               |         |                    | 146,382 |              |        |        | 23,499 |  |          |         | (8,457   | ) |         |         | 175,578 | 
|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                |                                            |         | 139,400      |         |               |         | -0-                |         |              |        | -0-    |        |  |          | -0-     |          |   |         | 139,400 |        
|                                            | Other long-term debt                                              |                                            |         | -0-          |         |               |         | 34,921             |         |              |        | 673    |        |  |          | (30,968 | )        |   |         | 4,626   |        
|                                            | Other postretirement benefits and other long-term
    liabilities |                                            |         | 3,907        |         |               |         | 21,520             |         |              |        | 4,142  |        |  |          | (2,881  | )        |   |         | 26,688  |        
|                                            |                                                                   |                                            |         |              |         |               |         |                    |         |              |        |        |        |  |          |         |          |   |         |        
|                                            |                                                                   | Total Long-Term Liabilities                |         |              | 353,307 |               |         |                    | 56,441  |              |        |        | 4,815  |  |          |         | (33,849  | ) |         |         | 380,714 | 
|Inter-company advances                      |                                                                   |                                            | 191,691 |              |         |               | 282,291 |                    |         |              | 18,216 |        |        |  | (492,198 | )       |          |   | -0-     |        
|Shareholders Equity                        |                                                                   |                                            | 77,466  |              |         |               | 287,161 |                    |         |              | 41,273 |        |        |  | (324,810 | )       |          |   | 81,090  |        
|                                            |                                                                   |                                            |         |              |         |               |         |                    |         |              |        |        |        |  |          |         |          |   |         |        
|                                            |                                                                   | Total Liabilities and Shareholders Equity |         | $            | 636,618 |               |         | $                  | 772,275 |              |        | $      | 87,803 |  |          | $       | (859,314 | ) |         | $       | 637,382 | 
|                                            |                                                                   |                                            |         |              |         |               |         |                    |         |              |        |        |        |  |          |         |          |   |         |        

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, 2004


|                                            |                                                                   |                                            |         |              |         |               |         |                    |         |              |        |        |        |  |          |         |          |   |         |         |         | 
|------------------------------------------- | ----------------------------------------------------------------- | ------------------------------------------ | ------- | ------------ | ------- | ------------- | ------- | ------------------ | ------- | ------------ | ------ | ------ | ------ |  | -------- | ------- | -------- | - | ------- | ------- | ------- | 
|                                            |                                                                   |                                            |         | Combined     |         | Combined      |         |                    |         |             
|                                            |                                                                   |                                            |         | Guarantor    |         | Non-Guarantor |         | Reclassifications/ |         |             
|                                            |                                                                   | Parent                                     |         | Subsidiaries |         | Subsidiaries  |         | Eliminations       |         | Consolidated
|                                            |                                                                   |                                            |         |              |         |               |         |                    |         |             
|                                            |                                                                   |                                           
|                                            |                                                                   | (In thousands)                            
|ASSETS                                     
|Current assets:                             |                                                                   |                                            |         |              |         |               |         |                    |         |              |        |        |        |  |          |         |          |   |         |        
|                                            | Cash and cash equivalents                                         |                                            | $       | (14,387      | )       |               | $       | 199                |         |              | $      | 6,851  |        |  | $        | 13,744  |          |   | $       | 6,407   |        
|                                            | Accounts receivable, net                                          |                                            |         | 114          |         |               |         | 117,097            |         |              |        | 30,208 |        |  |          | (1,944  | )        |   |         | 145,475 |        
|                                            | Inventories                                                       |                                            |         | (81          | )       |               |         | 151,187            |         |              |        | 26,188 |        |  |          | -0-     |          |   |         | 177,294 |        
|                                            | Other current assets                                              |                                            |         | 499          |         |               |         | 12,215             |         |              |        | 1,799  |        |  |          | 6,142   |          |   |         | 20,655  |        
|                                            |                                                                   |                                            |         |              |         |               |         |                    |         |              |        |        |        |  |          |         |          |   |         |        
|                                            |                                                                   | Total Current Assets                       |         |              | (13,855 | )             |         |                    | 280,698 |              |        |        | 65,046 |  |          |         | 17,942   |   |         |         | 349,831 | 
|Investment in subsidiaries                  |                                                                   |                                            | 341,088 |              |         |               | -0-     |                    |         |              | -0-    |        |        |  | (341,088 | )       |          |   | -0-     |        
|Inter-company advances                      |                                                                   |                                            | 251,357 |              |         |               | 224,918 |                    |         |              | 5,145  |        |        |  | (481,420 | )       |          |   | -0-     |        
|Property, Plant and Equipment, net          |                                                                   |                                            | 2,266   |              |         |               | 95,494  |                    |         |              | 12,121 |        |        |  | -0-      |         |          |   | 109,881 |        
|Other Assets:                               |                                                                   |                                            |         |              |         |               |         |                    |         |              |        |        |        |  |          |         |          |   |         |        
|                                            | Goodwill                                                          |                                            |         | -0-          |         |               |         | 78,424             |         |              |        | 4,141  |        |  |          | -0-     |          |   |         | 82,565  |        
|                                            | Net assets held for sale                                          |                                            |         | -0-          |         |               |         | 1,035              |         |              |        | -0-    |        |  |          | -0-     |          |   |         | 1,035   |        
|                                            | Other                                                             |                                            |         | 43,908       |         |               |         | 37,316             |         |              |        | 1,490  |        |  |          | (14,179 | )        |   |         | 68,535  |        
|                                            |                                                                   |                                            |         |              |         |               |         |                    |         |              |        |        |        |  |          |         |          |   |         |        
|                                            |                                                                   | Total Other Assets                         |         |              | 43,908  |               |         |                    | 116,775 |              |        |        | 5,631  |  |          |         | (14,179  | ) |         |         | 152,135 | 
|                                            |                                                                   |                                            |         |              |         |               |         |                    |         |              |        |        |        |  |          |         |          |   |         |        
|                                            |                                                                   | Total Assets                               |         | $            | 624,764 |               |         | $                  | 717,885 |              |        | $      | 87,943 |  |          | $       | (818,745 | ) |         | $       | 611,847 | 
|                                            |                                                                   |                                            |         |              |         |               |         |                    |         |              |        |        |        |  |          |         |          |   |         |        
|                                           
|LIABILITIES AND SHAREHOLDERS
    EQUITY   
|Current Liabilities:                        |                                                                   |                                            |         |              |         |               |         |                    |         |              |        |        |        |  |          |         |          |   |         |        
|                                            | Trade accounts payable                                            |                                            | $       | 4,347        |         |               | $       | 87,291             |         |              | $      | 16,130 |        |  | $        | 1,094   |          |   | $       | 108,862 |        
|                                            | Accrued expenses                                                  |                                            |         | 6,291        |         |               |         | 44,529             |         |              |        | 8,925  |        |  |          | -0-     |          |   |         | 59,745  |        
|                                            | Current portion of long-term liabilities                          |                                            |         | -0-          |         |               |         | 587                |         |              |        | 2,344  |        |  |          | 2,881   |          |   |         | 5,812   |        
|                                            |                                                                   |                                            |         |              |         |               |         |                    |         |              |        |        |        |  |          |         |          |   |         |        
|                                            |                                                                   | Total Current Liabilities                  |         |              | 10,638  |               |         |                    | 132,407 |              |        |        | 27,399 |  |          |         | 3,975    |   |         |         | 174,419 | 
|Long-Term Liabilities, less current portion |                                                                   |                                            |         |              |         |               |         |                    |         |              |        |        |        |  |          |         |          |   |         |        
|                                            | 8.375% Senior Subordinated Notes due 2014                         |                                            |         | 210,000      |         |               |         | -0-                |         |              |        | -0-    |        |  |          | -0-     |          |   |         | 210,000 |        
|                                            | 9.25% Senior Subordinated Notes due 2007                          |                                            |         | -0-          |         |               |         | -0-                |         |              |        | -0-    |        |  |          | -0-     |          |   |         | -0-     |        
|                                            | Revolving credit maturing on December 31,
    2010                |                                            |         | 120,600      |         |               |         | -0-                |         |              |        | -0-    |        |  |          | -0-     |          |   |         | 120,600 |        
|                                            | Other long-term debt                                              |                                            |         | -0-          |         |               |         | 35,037             |         |              |        | 707    |        |  |          | (30,968 | )        |   |         | 4,776   |        
|                                            | Other postretirement benefits and other long-term
    liabilities |                                            |         | 5,315        |         |               |         | 21,875             |         |              |        | 3,261  |        |  |          | (2,881  | )        |   |         | 27,570  |        
|                                            |                                                                   |                                            |         |              |         |               |         |                    |         |              |        |        |        |  |          |         |          |   |         |        
|                                            |                                                                   | Total Long-Term Liabilities                |         |              | 335,915 |               |         |                    | 56,912  |              |        |        | 3,968  |  |          |         | (33,849  | ) |         |         | 362,946 | 
|Inter-company advances                      |                                                                   |                                            | 206,503 |              |         |               | 242,202 |                    |         |              | 17,425 |        |        |  | (466,130 | )       |          |   | -0-     |        
|Shareholders Equity                        |                                                                   |                                            | 71,708  |              |         |               | 286,364 |                    |         |              | 39,151 |        |        |  | (322,741 | )       |          |   | 74,482  |        
|                                            |                                                                   |                                            |         |              |         |               |         |                    |         |              |        |        |        |  |          |         |          |   |         |        
|                                            |                                                                   | Total Liabilities and Shareholders Equity |         | $            | 624,764 |               |         | $                  | 717,885 |              |        | $      | 87,943 |  |          | $       | (818,745 | ) |         | $       | 611,847 | 
|                                            |                                                                   |                                            |         |              |         |               |         |                    |         |              |        |        |        |  |          |         |          |   |         |        

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 March 31,
2005


|                                  |                                              |                |        |              |   |               |         |              |  |              |        |       |  |   |        |     |  |   |         |        | 
|--------------------------------- | -------------------------------------------- | -------------- | ------ | ------------ | - | ------------- | ------- | ------------ |  | ------------ | ------ | ----- |  | - | ------ | --- |  | - | ------- | ------ | 
|                                  |                                              |                |        | Combined     |   | Combined      |         |              |  |             
|                                  |                                              |                |        | Guarantor    |   | Non-Guarantor |         |              |  |             
|                                  |                                              | Parent         |        | Subsidiaries |   | Subsidiaries  |         | Eliminations |  | Consolidated
|                                  |                                              |                |        |              |   |               |         |              |  |             
|                                  |                                              |               
|                                  |                                              | (In thousands)
|Net sales                         |                                              | $              | -0-    |              |   | $             | 202,648 |              |  | $            | 28,652 |       |  | $ | (2,417 | )   |  | $ | 228,883 |       
|Cost of sales                     |                                              |                | -0-    |              |   |               | 173,497 |              |  |              | 22,707 |       |  |   | (2,417 | )   |  |   | 193,787 |       
|                                  |                                              |                |        |              |   |               |         |              |  |              |        |       |  |   |        |     |  |   |         |       
|Gross profit                      |                                              |                | -0-    |              |   |               | 29,151  |              |  |              | 5,945  |       |  |   | -0-    |     |  |   | 35,096  |       
|Operating Expenses:               |                                              |                |        |              |   |               |         |              |  |              |        |       |  |   |        |     |  |   |         |       
|                                  | Selling, general and administrative expenses |                |        | 2,120        |   |               |         | 16,132       |  |              |        | 3,157 |  |   |        | 150 |  |   |         | 21,559 | 
|                                  |                                              |                |        |              |   |               |         |              |  |              |        |       |  |   |        |     |  |   |         |       
|Operating Income (loss)           |                                              |                | (2,120 | )            |   |               | 13,019  |              |  |              | 2,788  |       |  |   | (150   | )   |  |   | 13,537  |       
|Interest expense                  |                                              |                | (1,423 | )            |   |               | 7,497   |              |  |              | 535    |       |  |   | (150   | )   |  |   | 6,459   |       
|                                  |                                              |                |        |              |   |               |         |              |  |              |        |       |  |   |        |     |  |   |         |       
|Income (loss) before income taxes |                                              |                | (697   | )            |   |               | 5,522   |              |  |              | 2,253  |       |  |   | -0-    |     |  |   | 7,078   |       
|Income taxes                      |                                              |                | (661   | )            |   |               | -0-     |              |  |              | 1,460  |       |  |   | -0-    |     |  |   | 799     |       
|                                  |                                              |                |        |              |   |               |         |              |  |              |        |       |  |   |        |     |  |   |         |       
|                                  | Net income (loss)                            |                | $      | (36          | ) |               | $       | 5,522        |  |              | $      | 793   |  |   | $      | -0- |  |   | $       | 6,279  | 
|                                  |                                              |                |        |              |   |               |         |              |  |              |        |       |  |   |        |     |  |   |         |       

PARK-OHIO INDUSTRIES, INC. AND
SUBSIDIARIES

CONSOLIDATING STATEMENT OF
OPERATIONS


For the Three Months Ended March 31,
2004


|                                  |                                              |                |      |              |   |               |         |              |  |              |        |       |  |   |        |     |  |   |         |        | 
|--------------------------------- | -------------------------------------------- | -------------- | ---- | ------------ | - | ------------- | ------- | ------------ |  | ------------ | ------ | ----- |  | - | ------ | --- |  | - | ------- | ------ | 
|                                  |                                              |                |      | Combined     |   | Combined      |         |              |  |             
|                                  |                                              |                |      | Guarantor    |   | Non-Guarantor |         |              |  |             
|                                  |                                              | Parent         |      | Subsidiaries |   | Subsidiaries  |         | Eliminations |  | Consolidated
|                                  |                                              |                |      |              |   |               |         |              |  |             
|                                  |                                              |               
|                                  |                                              | (In thousands)
|Net sales                         |                                              | $              | -0-  |              |   | $             | 167,749 |              |  | $            | 27,240 |       |  | $ | (2,619 | )   |  | $ | 192,370 |       
|Cost of sales                     |                                              |                | -0-  |              |   |               | 142,536 |              |  |              | 22,216 |       |  |   | (2,619 | )   |  |   | 162,133 |       
|                                  |                                              |                |      |              |   |               |         |              |  |              |        |       |  |   |        |     |  |   |         |       
|Gross profit                      |                                              |                | -0-  |              |   |               | 25,213  |              |  |              | 5,024  |       |  |   | -0-    |     |  |   | 30,237  |       
|Operating Expenses:               |                                              |                |      |              |   |               |         |              |  |              |        |       |  |   |        |     |  |   |         |       
|                                  | Selling, general and administrative expenses |                |      | 660          |   |               |         | 14,442       |  |              |        | 2,540 |  |   |        | -0- |  |   |         | 17,642 | 
|                                  |                                              |                |      |              |   |               |         |              |  |              |        |       |  |   |        |     |  |   |         |       
|Operating Income (loss)           |                                              |                | (660 | )            |   |               | 10,771  |              |  |              | 2,484  |       |  |   | -0-    |     |  |   | 12,595  |       
|Interest expense                  |                                              |                | (230 | )            |   |               | 5,411   |              |  |              | 955    |       |  |   | -0-    |     |  |   | 6,136   |       
|                                  |                                              |                |      |              |   |               |         |              |  |              |        |       |  |   |        |     |  |   |         |       
|Income (loss) before income taxes |                                              |                | (430 | )            |   |               | 5,360   |              |  |              | 1,529  |       |  |   | -0-    |     |  |   | 6,459   |       
|Income taxes                      |                                              |                | 250  |              |   |               | -0-     |              |  |              | 341    |       |  |   | -0-    |     |  |   | 591     |       
|                                  |                                              |                |      |              |   |               |         |              |  |              |        |       |  |   |        |     |  |   |         |       
|                                  | Net income (loss)                            |                | $    | (680         | ) |               | $       | 5,360        |  |              | $      | 1,188 |  |   | $      | -0- |  |   | $       | 5,868  | 
|                                  |                                              |                |      |              |   |               |         |              |  |              |        |       |  |   |        |     |  |   |         |       

15



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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 Three Months Ended March 31,
2005


|                                                  |                                                 |                |         |              |   |               |        |              |   |              |        |      |   |   |     |     |  |   |         |        |  
|------------------------------------------------- | ----------------------------------------------- | -------------- | ------- | ------------ | - | ------------- | ------ | ------------ | - | ------------ | ------ | ---- | - | - | --- | --- |  | - | ------- | ------ | -
|                                                  |                                                 |                |         | Combined     |   | Combined      |        |              |   |             
|                                                  |                                                 |                |         | Guarantor    |   | Non-Guarantor |        |              |   |             
|                                                  |                                                 | Parent         |         | Subsidiaries |   | Subsidiaries  |        | Eliminations |   | Consolidated
|                                                  |                                                 |                |         |              |   |               |        |              |   |             
|                                                  |                                                 |               
|                                                  |                                                 | (In thousands)
|Net cash provided (used ) by operations           |                                                 | $              | (26,588 | )            |   | $             | 6,899  |              |   | $            | (1,530 | )    |   | $ | -0- |     |  | $ | (21,219 | )     
|Cash flows from investing activities:             |                                                 |                |         |              |   |               |        |              |   |              |        |      |   |   |     |     |  |   |         |       
|                                                  | Purchases of property, plant and equipment, net |                |         | (48          | ) |               |        | (3,265       | ) |              |        | (246 | ) |   |     | -0- |  |   |         | (3,559 | )
|                                                  | Proceeds from sale of assets held for sale      |                |         | -0-          |   |               |        | 1,100        |   |              |        | -0-  |   |   |     | -0- |  |   |         | 1,100  |  
|                                                  |                                                 |                |         |              |   |               |        |              |   |              |        |      |   |   |     |     |  |   |         |       
|Net cash provided (used ) in investing activities |                                                 |                | (48     | )            |   |               | (2,165 | )            |   |              | (246   | )    |   |   | -0- |     |  |   | (2,459  | )     
|Cash flows from financing activities:             |                                                 |                |         |              |   |               |        |              |   |              |        |      |   |   |     |     |  |   |         |       
|                                                  | Proceeds from revolving credit arrangements     |                |         | 18,800       |   |               |        | -0-          |   |              |        | 568  |   |   |     | -0- |  |   |         | 19,368 |  
|                                                  | Principal payments on long-term debt            |                |         | -0-          |   |               |        | (172         | ) |              |        | -0-  |   |   |     | -0- |  |   |         | (172   | )
|                                                  |                                                 |                |         |              |   |               |        |              |   |              |        |      |   |   |     |     |  |   |         |       
|Net cash provided (used ) by financing activities |                                                 |                | 18,800  |              |   |               | (172   | )            |   |              | 568    |      |   |   | -0- |     |  |   | 19,196  |       
|                                                  |                                                 |                |         |              |   |               |        |              |   |              |        |      |   |   |     |     |  |   |         |       
|Increase (decrease) in cash and cash equivalents  |                                                 |                | (7,836  | )            |   |               | 4,562  |              |   |              | (1,208 | )    |   |   | -0- |     |  |   | (4,482  | )     
|Cash and cash equivalents at beginning of period  |                                                 |                | (643    | )            |   |               | 199    |              |   |              | 6,851  |      |   |   | -0- |     |  |   | 6,407   |       
|                                                  |                                                 |                |         |              |   |               |        |              |   |              |        |      |   |   |     |     |  |   |         |       
|Cash and cash equivalents at end of period        |                                                 | $              | (8,479  | )            |   | $             | 4,761  |              |   | $            | 5,643  |      |   | $ | -0- |     |  | $ | 1,925   |       
|                                                  |                                                 |                |         |              |   |               |        |              |   |              |        |      |   |   |     |     |  |   |         |       

PARK-OHIO INDUSTRIES, INC. AND
SUBSIDIARIES

CONDENSED CONSOLIDATING STATEMENT OF CASH
FLOWS


For the Three Months Ended March 31,
2004


|                                                  |                                                               |                |        |              |  |               |        |              |   |              |        |        |   |   |     |     |  |   |        |        |  
|------------------------------------------------- | ------------------------------------------------------------- | -------------- | ------ | ------------ |  | ------------- | ------ | ------------ | - | ------------ | ------ | ------ | - | - | --- | --- |  | - | ------ | ------ | -
|                                                  |                                                               |                |        | Combined     |  | Combined      |        |              |   |             
|                                                  |                                                               |                |        | Guarantor    |  | Non-Guarantor |        |              |   |             
|                                                  |                                                               | Parent         |        | Subsidiaries |  | Subsidiaries  |        | Eliminations |   | Consolidated
|                                                  |                                                               |                |        |              |  |               |        |              |   |             
|                                                  |                                                               |               
|                                                  |                                                               | (In thousands)
|Net cash provided (used) by operations            |                                                               | $              | (8,583 | )            |  | $             | 3,587  |              |   | $            | 1,663  |        |   | $ | -0- |     |  | $ | (3,333 | )     
|Cash flows from investing activities:             |                                                               |                |        |              |  |               |        |              |   |              |        |        |   |   |     |     |  |   |        |       
|                                                  | Purchases of property, plant and equipment, net               |                |        | 9            |  |               |        | (1,055       | ) |              |        | (1,157 | ) |   |     | -0- |  |   |        | (2,203 | )
|                                                  |                                                               |                |        |              |  |               |        |              |   |              |        |        |   |   |     |     |  |   |        |       
|Net cash provided (used) in investing activities  |                                                               |                | 9      |              |  |               | (1,055 | )            |   |              | (1,157 | )      |   |   | -0- |     |  |   | (2,203 | )     
|Cash flows from financing activities:             |                                                               |                |        |              |  |               |        |              |   |              |        |        |   |   |     |     |  |   |        |       
|                                                  | Proceeds from bank arrangements                               |                |        | 3,400        |  |               |        | -0-          |   |              |        | 254    |   |   |     | -0- |  |   |        | 3,654  |  
|                                                  | Principal payments on revolving credit and
    long-term debt |                |        | -0-          |  |               |        | (115         | ) |              |        | -0-    |   |   |     | -0- |  |   |        | (115   | )
|                                                  |                                                               |                |        |              |  |               |        |              |   |              |        |        |   |   |     |     |  |   |        |       
|Net cash provided (used ) by financing activities |                                                               |                | 3,400  |              |  |               | (115   | )            |   |              | 254    |        |   |   | -0- |     |  |   | 3,539  |       
|                                                  |                                                               |                |        |              |  |               |        |              |   |              |        |        |   |   |     |     |  |   |        |       
|Increase (decrease) in cash and cash equivalents  |                                                               |                | (5,174 | )            |  |               | 2,417  |              |   |              | 760    |        |   |   | -0- |     |  |   | (1,997 | )     
|Cash and cash equivalents at beginning of period  |                                                               |                | (1,392 | )            |  |               | 881    |              |   |              | 2,702  |        |   |   | -0- |     |  |   | 2,191  |       
|                                                  |                                                               |                |        |              |  |               |        |              |   |              |        |        |   |   |     |     |  |   |        |       
|Cash and cash equivalents at end of period        |                                                               | $              | (6,566 | )            |  | $             | 3,298  |              |   | $            | 3,462  |        |   | $ | -0- |     |  | $ | 194    |       
|                                                  |                                                               |                |        |              |  |               |        |              |   |              |        |        |   |   |     |     |  |   |        |       

16



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##### Table of Contents






REPORT OF INDEPENDENT REGISTERED PUBLIC
ACCOUNTING FIRM

Board of Directors and Shareholder

Park-Ohio Industries, Inc.


We have reviewed the accompanying consolidated
balance sheet of Park-Ohio Industries, Inc. and subsidiaries as
of March 31, 2005 and the related consolidated statements
of income and cash flows for the three-month periods ended
March 31, 2005 and 2004 and the consolidated statement of
shareholders equity for the three-month period ended
March 31, 2005. These financial statements are the
responsibility of the Companys management.

We conducted our review in accordance with the
standards of the Public Company Accounting Oversight Board
(United States). A review of interim financial information
consists principally of applying analytical procedures, and
making inquiries of persons responsible for financial and
accounting matters. It is substantially less in scope than an
audit conducted in accordance with the standards of the Public
Company Accounting Oversight Board, the objective of which is
the expression of an opinion regarding the financial statements
taken as a whole. Accordingly, we do not express such an opinion.

Based upon our reviews, we are not aware of any
material modifications that should be made to the consolidated
financial statements referred to above for them to be in
conformity with U.S. generally accepted accounting principles.

We have previously audited, in accordance with
standards of the Public Company Accounting Oversight Board
(United States), the consolidated balance sheet of Park-Ohio
Industries, Inc. and subsidiaries as of December 31, 2004
and the related consolidated statements of operations,
shareholders equity, and cash flows for the year then
ended, and in our report dated March 10, 2005, we expressed
an unqualified opinion on those consolidated financial
statements. In our opinion, the information set forth in the
accompanying consolidated balance sheet as of December 31,
2004, is fairly stated, in all material respects, in relation to
the consolidated balance sheet from which it has been derived.



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

Cleveland, Ohio

May 9, 2005


17



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##### Table of Contents






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

Our consolidated financial statements include the
accounts of Park-Ohio Industries, Inc. and its subsidiaries. All
significant intercompany transactions have been eliminated in
consolidation. Financial information for the three-month period
ended March 31, 2005 is not directly comparable to the
financial information for the same period in 2004 primarily due
to acquisitions.

Executive Overview

We are an industrial supply chain logistics and
diversified manufacturing business, operating in three segments:
ILS, Aluminum Products and Manufactured Products. ILS provides
customers with integrated supply chain management services for a
broad range of high-volume, specialty production components. ILS
customers receive various value-added services, such as
engineering and design services, part usage and cost analysis,
supplier selection, quality assurance, bar coding, product
packaging and tracking, just-in-time and point-of use delivery,
electronic billing and ongoing technical support. The principal
customers of ILS are in the heavy-duty truck, electrical
controls, automotive and other vehicle, industrial equipment,
power sports equipment, lawn and garden equipment, and
semiconductor equipment industries. Aluminum Products casts and
machines aluminum engine, transmission, brake, suspension and
other components for automotive, agricultural equipment,
construction equipment and heavy-duty truck original equipment
manufacturers (OEMs), primarily on a sole-source basis. Aluminum
Products also provides value-added services such as design and
engineering and assembly. Manufactured Products operates a
diverse group of niche manufacturing businesses that design and
manufacture a broad range of highly-engineered products
including induction heating and melting systems, pipe threading
systems, industrial oven systems, rubber products, and forged
and machined products. Manufactured Products also produces and
provides services and spare parts for the equipment it
manufactures. The principal customers of Manufactured Products
are OEMs and end-users in the steel, automotive, oil and gas,
rail, and aerospace and defense industries. Sales, earnings and
other relevant financial data for these three segments are
provided in Note F to the consolidated financial statements.

In first quarter 2005, sales and profits
increased compared to the same quarter in 2004, and to the
immediately preceding quarter. During 2004, we experienced the
increased sales and profitability previously forecast as the
manufacturing economy returned to growth, particularly in three
of our customer industries: heavy-duty truck; semiconductor
equipment; and equipment for steel manufacturing. Net sales for
2004 increased 30% compared to 2003. Profitability increased
more than proportionally to sales, based on cost reductions from
our restructuring during the downturn in 2001, 2002 and 2003.
During those years, we consolidated 28 supply chain logistics
facilities and closed or sold 11 manufacturing plants.

During 2004, we reinforced the long-term
availability and attractive pricing of our liquidity, by
refinancing both of our major sources of borrowed funds: our
senior subordinated notes and revolving credit agreement. In
November 2004, we sold $210.0 million of 8.375% Senior
Subordinated Notes due 2014. We used the net proceeds to fund
the tender and early redemption of $199.9 million of 9.25%
Senior Subordinated Notes due 2007. We incurred debt
extinguishment costs primarily related to premiums and other
transaction costs associated with the tender and early
redemption and wrote off deferred financing costs totaling
$6.0 million associated with the senior subordinated notes.
In December 2004, we amended our revolving credit agreement,
extending its maturity to six years so that it now expires in
December 2010, increasing the credit limit so that we may borrow
up to $200.0 million subject to an asset based formula, and
providing lower interest rate levels. Borrowings under the
revolving credit agreement are secured by substantially all our
assets. We had approximately $49.6 million of unused
borrowing availability at March 31, 2005. Funds provided by
operations plus available borrowings under the revolving credit
agreement are expected to be adequate to meet our cash
requirements.

We acquired substantially all of the assets of
the Amcast Components Group on August 23, 2004 for
approximately $10.0 million cash and the assumption of
approximately $9 million of operating liabilities. We
acquired the remaining 66% of the common stock of Jamco on
April 1, 2004 for cash existing on the balance sheet of
Jamco at that date.

18



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##### Table of Contents



Results of Operations



| |                                               
| | ----------------------------------------------
| | Three Months 2005 versus Three Months
    2004



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

|                       |  |                 |       |      |  |         |       |            |  |       |      |  |  |  |    |   |  |   |      | 
|---------------------- |  | --------------- | ----- | ---- |  | ------- | ----- | ---------- |  | ----- | ---- |  |  |  | -- | - |  | - | ---- | 
|                       |  |                 |       |      |  |         |       |           
|                       |  | Three Months    |       |      |  |         |       |           
|                       |  | Ended March 31, |       |      |  |         |       | Acquired/ 
|                       |  |                 |       |      |  | Percent |       | (Divested)
|                       |  | 2005            |       | 2004 |  | Change  |       | Change     |  | Sales
|                       |  |                 |       |      |  |         |       |            |  |      
|ILS                    |  | $               | 126.9 |      |  | $       | 116.3 |            |  | $     | 10.6 |  |  |  | 9  | % |  | $ | 0.0  | 
|Aluminum products      |  |                 | 42.9  |      |  |         | 27.6  |            |  |       | 15.3 |  |  |  | 55 | % |  |   | 19.0 | 
|Manufactured products  |  |                 | 59.1  |      |  |         | 48.5  |            |  |       | 10.6 |  |  |  | 22 | % |  |   | 3.5  | 
|                       |  |                 |       |      |  |         |       |            |  |       |      |  |  |  |    |   |  |   |      | 
|Consolidated net sales |  | $               | 228.9 |      |  | $       | 192.4 |            |  | $     | 36.5 |  |  |  | 19 | % |  | $ | 22.5 | 
|                       |  |                 |       |      |  |         |       |            |  |       |      |  |  |  |    |   |  |   |      | 

Net sales increased by 19% in first quarter 2005
compared to the same quarter of 2004. ILS sales increased due to
general economic growth, the addition of new customers and
increases in product range to existing customers. Aluminum
Products sales increased in first quarter 2005 primarily due to
$19.0 million of sales from the plants acquired in August
2004 from the Amcast Components Group. Manufactured Products
sales increased 22% primarily in the induction equipment, pipe
threading equipment and forging businesses. Of this increase,
$3.5 million was due to the second quarter 2004 acquisition
of the remaining 66% of the common stock of Jamco.



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

|                                   |  |                 |       |      |  |         |       |        |  |   |      |  |  |  |    |  
|---------------------------------- |  | --------------- | ----- | ---- |  | ------- | ----- | ------ |  | - | ---- |  |  |  | -- | -
|                                   |  |                 |       |      |  |        
|                                   |  | Three Months    |       |      |  |        
|                                   |  | Ended March 31, |       |      |  |        
|                                   |  |                 |       |      |  | Percent
|                                   |  | 2005            |       | 2004 |  | Change  |       | Change
|                                   |  |                 |       |      |  |         |       |       
|Consolidated cost of products sold |  | $               | 193.8 |      |  | $       | 162.1 |        |  | $ | 31.7 |  |  |  | 20 | %
|                                   |  |                 |       |      |  |         |       |        |  |   |      |  |  |  |    |  
|Consolidated gross profit          |  | $               | 35.1  |      |  | $       | 30.2  |        |  | $ | 4.9  |  |  |  | 16 | %
|                                   |  |                 |       |      |  |         |       |        |  |   |      |  |  |  |    |  
|Gross margin                       |  |                 | 15.3  | %    |  |         | 15.7  | %      |  |   |      |  |  |  |    |  

Cost of products sold increased 20% in first
quarter 2005 compared to the same quarter of 2004, while gross
margin decreased to 15.3% from 15.7% in 2004. ILS gross margin
decreased primarily due to steel price increases and mix
changes. Aluminum Products gross margin decreased due to a
combination of the addition of lower-margin Amcast plants,
product mix and pricing changes. The $19.0 million of sales
from the acquired Amcast business generated significantly lower
margins than the existing Aluminum Products business. We expect
margins at the acquired plants to increase over time as a result
of post-acquisition cost reductions, price increases and new
business. Gross margin in the Manufactured Products segment
increased, primarily as a result of increased sales and overhead
efficiencies achieved in the induction equipment, pipe threading
equipment and forging businesses.



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

|                           |  |                 |      |      |  |         |      |        |  |   |     |  |  |  |    |  
|-------------------------- |  | --------------- | ---- | ---- |  | ------- | ---- | ------ |  | - | --- |  |  |  | -- | -
|                           |  |                 |      |      |  |        
|                           |  | Three Months    |      |      |  |        
|                           |  | Ended March 31, |      |      |  |        
|                           |  |                 |      |      |  | Percent
|                           |  | 2005            |      | 2004 |  | Change  |      | Change
|                           |  |                 |      |      |  |         |      |       
|Consolidated SG&A expenses |  | $               | 21.6 |      |  | $       | 17.6 |        |  | $ | 4.0 |  |  |  | 23 | %
|SG&A percent               |  |                 | 9.4  | %    |  |         | 9.1  | %      |  |   |     |  |  |  |    |  

Consolidated SG&A expenses increased 23% in
first quarter 2005 compared to the same quarter in 2004.
Approximately $1.6 million of the SG&A increase was due
to the acquisitions of Jamco and Amcast Components Group, while
bonus expenses of $0.8 million and Sarbanes-Oxley
compliance costs of $.5 million increased SG&A further.
The remainder of the increase was primarily due to increased
sales and production volumes. SG&A expenses as a percent of
sales increased by .3%. SG&A expenses were reduced in first
quarter 2005

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compared to the first quarter 2004 by a
$.1 million increase in net pension credits that reflected
improved returns on pension plan assets.




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

|                               |  |                 |       |      |  |         |       |        |  |   |      |   |  |  |              |  
|------------------------------ |  | --------------- | ----- | ---- |  | ------- | ----- | ------ |  | - | ---- | - |  |  | ------------ | -
|                               |  |                 |       |      |  |        
|                               |  | Three Months    |       |      |  |        
|                               |  | Ended March 31, |       |      |  |        
|                               |  |                 |       |      |  | Percent
|                               |  | 2005            |       | 2004 |  | Change  |       | Change
|                               |  |                 |       |      |  |         |       |       
|Interest expense               |  | $               | 6.5   |      |  | $       | 6.1   |        |  | $ | 0.4  |   |  |  | 7            | %
|Average outstanding borrowings |  | $               | 352.3 |      |  | $       | 312.9 |        |  | $ | 39.4 |   |  |  | 13           | %
|Average borrowing rate         |  |                 | 7.33  | %    |  |         | 7.84  | %      |  |   | (51  | ) |  |  | basis points |  

Interest expense increased in first quarter 2005
compared to the same quarter in 2004, primarily due to higher
average debt outstanding, partially offset by lower average
interest rates during the first quarter of 2005. The increase in
average borrowings resulted primarily from higher working
capital requirements. The lower average borrowing rate in the
first quarter of 2005 was due primarily to decreased rates under
our revolving credit agreement.



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

Income taxes of $.8 million were provided in
the first three months of 2005, an effective 11% income tax
rate, compared to income taxes of $.6 million provided in
the same period of 2004, a 9% effective income tax rate. In both
periods these taxes consisted primarily of state and foreign
taxes on profitable operations. In neither period did the income
tax provision include federal income taxes. At December 31,
2004, the subsidiaries of the Company had $47.7 million of
net operating loss carryforwards for federal tax purposes. We
have recognized a tax benefit for these loss carryforwards only
to the extent that they offset the Companys first quarter
2005 federal tax provision.

Seasonality; Variability of Operating
Results

Our results of operations are typically stronger
in the first six months than the last six months of each
calendar year due to scheduled plant maintenance in the third
quarter to coincide with customer plant shutdowns and due to
holidays in the fourth quarter.

The timing of orders placed by our customers has
varied with, among other factors, orders for customers
finished goods, customer production schedules, competitive
conditions and general economic conditions. The variability of
the level and timing of orders has, from time to time, resulted
in significant periodic and quarterly fluctuations in the
operations of our business units. Such variability is
particularly evident at the capital equipment businesses,
included in the Manufactured Products segment, which typically
ship a few large systems per year.

Forward-Looking Statements

This Form 10-Q contains certain statements
that are forward-looking statements within the
meaning of Section 27A of the Securities Act and
Section 21E of the Exchange Act. The words 
believes, anticipates, plans,
expects, intends, estimates
and similar expressions are intended to identify forward-looking
statements. These forward-looking statements involve known and
unknown risks, uncertainties and other factors that may cause
our actual results, performance and achievements, or industry
results, to be materially different from any future results,
performance or achievements expressed or implied by such
forward-looking statements. These uncertainties and other
factors include such things as: general business conditions and
competitive factors, including pricing pressures and product
innovation; demand for our products and services; raw material
availability and pricing; changes in our relationships with
customers and suppliers; the financial condition of our
customers, including the impact of any bankruptcies; our ability
to successfully integrate recent and future acquisitions into
existing operations; changes in general domestic economic
conditions such as inflation rates, interest rates, tax rates
and adverse impacts to us, our suppliers and customers from acts
of terrorism or hostilities; our ability to meet various
covenants, including financial covenants, contained in our
revolving credit

20



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##### Table of Contents



agreement and the indenture governing our senior
subordinated notes; increasingly stringent domestic and foreign
governmental regulations, including those affecting the
environment; inherent uncertainties involved in assessing our
potential liability for environmental remediation-related
activities; the outcome of pending and future litigation and
other claims; dependence on the automotive and heavy-duty truck
industries, which are highly cyclical; dependence on key
management; and dependence on information systems. Any
forward-looking statement speaks only as of the date on which
such statement is made, and we undertake no obligation to update
any forward-looking statement, whether as a result of new
information, future events or otherwise. In light of these and
other uncertainties, the inclusion of a forward-looking
statement herein should not be regarded as a representation by
us that our plans and objectives will be achieved.


Review By Registered Public Accounting
Firm

The consolidated financial statements at
March 31, 2005, and for the three-month periods ended
March 31, 2005 and 2004, have been reviewed, prior to
filing, by Ernst & Young LLP, our registered public
accounting firm, and their report is included herein.




Item 3. Quantitative and Qualitative
Disclosure About Market Risk

We are exposed to market risk including changes
in interest rates. We are subject to interest rate risk on
borrowings under our floating rate revolving credit agreement,
which consisted of borrowings of $139.4 million at
March 31, 2005. A 100 basis point increase in the interest
rate would have resulted in an increase in interest expense of
approximately $.3 million during the period.

Our foreign subsidiaries generally conduct
business in local currencies. During the first quarter of 2005,
we recorded a favorable foreign currency translation adjustment
of $.3 million related to net assets located outside the
United States. This foreign currency translation adjustment
resulted primarily from the weakening of the United States
dollar in relation to the Canadian dollar. Our foreign
operations are also subject to other customary risks of
operating in a global environment, such as unstable political
situations, the effect of local laws and taxes, tariff increases
and regulations and requirements for export licenses, the
potential imposition of trade or foreign exchange restrictions
and transportation delays.




Item 4. Controls and
Procedures

Under the supervision of and with the
participation of our management, including our chief executive
officer and chief financial officer, we evaluated the
effectiveness of the design and operation of our disclosure
controls and procedures (as defined in Rules 13a-15(e) and
15(d)-15(e) under the Securities Exchange Act of 1934) as of the
end of the period covered by this quarterly report.

Based on that evaluation, our chief executive
officer and chief financial officer have concluded that, as of
the end of the period covered by this report, our disclosure
controls and procedures were effective.

There have been no changes in our internal
control over financial reporting that occurred during the first
quarter of 2005 that have materially affected, or are reasonably
likely to materially affect, our internal control over financial
reporting.

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##### Table of Contents






PART II

OTHER INFORMATION




Item 6. Exhibits

The following exhibits are included herein:

|     |  |                                                                                                          
|---- |  | ---------------------------------------------------------------------------------------------------------
|10.1 |  | Summary of Annual Cash Bonus Plan                                                                        
|    
|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                        

22



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##### Table of Contents






SIGNATURE

Pursuant to the requirements of the Securities
Exchange Act of 1934, the Registrant has duly caused this report
to be signed on its behalf by the undersigned, thereunto duly
authorized.



| |                           
| | --------------------------
| | 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)         



|     |              | 
|---- | ------------ | 
|Date | May 13, 2005 | 

| | 
| | 
| | 

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EXHIBIT INDEX

QUARTERLY REPORT ON FORM 10-Q

PARK-OHIO INDUSTRIES, INC. AND
SUBSIDIARIES

FOR THE QUARTER ENDED MARCH 31, 2005


|        |      |  |  |                                                                                                          
|------- | ---- |  |  | ---------------------------------------------------------------------------------------------------------
|Exhibit |      | 
|        |      | 
|        | 10.1 |  |  | Summary of Annual Cash Bonus Plan                                                                        
|        | 31.1 |  |  | Principal Executive Officers Certification
    Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
|        | 31.2 |  |  | Principal Executive 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                        

24