##### 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,
    2006                                           
|or        
|          
|o          |  | TRANSITION REPORT PURSUANT TO SECTION 13 OR
    15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|           |  | For the transition period
    from           to                                             

Commission file number 333-43005

Park-Ohio Industries, Inc.

(Exact name of registrant as specified in its
charter)


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

216/692-7200

(Registrants telephone number, including area code)


Pursuant to a corporate reorganization effective
June 15, 1998,

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


The registrant meets the conditions set forth in General
Instruction H(1)(a) and (b) of 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 a large
accelerated filer, an accelerated filer, or a non-accelerated
filer. See definition of accelerated filer and large
accelerated filer in Rule 12b-2 of the Exchange Act.
(Check one):

Large Accelerated
Filer o          Accelerated
Filer o          Non-Accelerated
Filer þ

Indicate by check mark whether the registrant is a shell company
(as defined in Rule 12b-2 of the Exchange Act).

Yes o          No þ

All of the outstanding capital stock of the registrant is held
by Park-Ohio Holdings Corp. As of April 30, 2006,
100 shares of the registrants common stock,
$1 par value, were outstanding.

The Exhibit Index is located on page 26.



---






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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, 2006 and December 31,
    2005                 |    |      | 3  | 
|                                                 
|                                                 
|                                                 
|                                                 
|                                                  |  | Consolidated statements of
    income  Three months ended March 31, 2006 and
    2005     |    |      | 4  | 
|                                                 
|                                                 
|                                                 
|                                                 
|                                                  |  | Consolidated statement of
    shareholders equity  Three months ended
    March 31, 2006 |    |      | 5  | 
|                                                 
|                                                 
|                                                 
|                                                 
|                                                  |  | Consolidated statements of
    cash flows  Three months ended March 31, 2006
    and 2005 |    |      | 6  | 
|                                                 
|                                                 
|                                                 
|                                                 
|                                                  |  | Notes to consolidated
    financial statements  March 31, 2006                            |    |      | 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                                                                    |    |      | 22 | 
|                                                 
|                                                 
|                                                 
|                                                 
|                                                 
|PART II. OTHER
    INFORMATION                   
|                                                 
|                                                 
|                                                 
|                                                 
|Item 1.                                           |  | Legal Proceedings                                                                          |    |      | 23 | 
|                                                 
|                                                 
|                                                 
|                                                 
|Item 1A.                                          |  | Risk Factors                                                                               |    |      | 24 | 
|                                                 
|                                                 
|                                                 
|                                                 
|Item 5.                                           |  | Other Information                                                                          |    |      | 24 | 
|                                                 
|                                                 
|                                                 
|                                                 
|Item 6.                                           |  | Exhibits                                                                                   |    |      | 24 | 
|                                                 
|                                                 
|                                                 
|                                                 
|SIGNATURE                                         |  |                                                                                            | 25 |     
|                                                 
|                                                 
|                                                 
|                                                 
|EXHIBIT
    INDEX                                 |  |                                                                                            | 26 |     
|EX-31.1 PEO Certification Pursuant to Section 302
|EX-31.2 PFO Certification Pursuant to Section 302
|EX-32 Certification Requirement Under Section 906



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,
|                                                                                          |                                                                                                                                | 2006                      |         | 2005        
|                                                                                          |                                                                                                                                |                           |         |             
|                                                                                          |                                                                                                                                |                          
|                                                                                          |                                                                                                                                | (Dollars in thousands)   
|                                                                                         
|                                                                                         
|                                                                                         
|                                                                                         
|ASSETS                                                                                    |                                                                                                                                |                           |         |              |         |   |         |        
|Current Assets                                                                            |                                                                                                                                |                           |         |              |         |   |         |        
|                                                                                         
|                                                                                         
|                                                                                         
|                                                                                         
|                                                                                          | Cash and cash equivalents                                                                                                      |                           | $       | 13,472       |         |   | $       | 17,868  |        
|                                                                                         
|                                                                                         
|                                                                                         
|                                                                                         
|                                                                                          | Accounts receivable, less allowances for doubtful
    accounts of $4,338 at March 31, 2006 and $5,120 at
    December 31, 2005 |                           |         | 180,714      |         |   |         | 153,502 |        
|                                                                                         
|                                                                                         
|                                                                                         
|                                                                                         
|                                                                                          | Inventories                                                                                                                    |                           |         | 220,578      |         |   |         | 190,553 |        
|                                                                                         
|                                                                                         
|                                                                                         
|                                                                                         
|                                                                                          | Deferred tax assets                                                                                                            |                           |         | 8,627        |         |   |         | 8,627   |        
|                                                                                         
|                                                                                         
|                                                                                         
|                                                                                         
|                                                                                          | Other current assets                                                                                                           |                           |         | 19,843       |         |   |         | 27,753  |        
|                                                                                          |                                                                                                                                |                           |         |              |         |   |         |        
|                                                                                          |                                                                                                                                | Total Current Assets      |         |              | 443,234 |   |         |         | 398,303 | 
|                                                                                         
|                                                                                         
|                                                                                         
|                                                                                         
|Property, Plant and Equipment                                                             |                                                                                                                                |                           | 247,303 |              |         |   | 243,367 |        
|                                                                                         
|                                                                                         
|                                                                                         
|                                                                                         
|                                                                                          | Less accumulated depreciation                                                                                                  |                           |         | 134,817      |         |   |         | 130,265 |        
|                                                                                          |                                                                                                                                |                           |         |              |         |   |         |        
|                                                                                          |                                                                                                                                |                           | 112,486 |              |         |   | 113,102 |        
|Other Assets                                                                              |                                                                                                                                |                           |         |              |         |   |         |        
|                                                                                         
|                                                                                         
|                                                                                         
|                                                                                         
|                                                                                          | Goodwill                                                                                                                       |                           |         | 85,094       |         |   |         | 82,703  |        
|                                                                                         
|                                                                                         
|                                                                                         
|                                                                                         
|                                                                                          | Other                                                                                                                          |                           |         | 70,795       |         |   |         | 70,617  |        
|                                                                                          |                                                                                                                                |                           |         |              |         |   |         |        
|                                                                                          |                                                                                                                                | $                         | 711,609 |              |         | $ | 664,725 |        
|                                                                                          |                                                                                                                                |                           |         |              |         |   |         |        
|                                                                                         
|                                                                                         
|                                                                                         
|                                                                                         
|                                                                                         
|LIABILITIES AND SHAREHOLDERS
    EQUITY                                                  |                                                                                                                                |                           |         |              |         |   |         |        
|Current Liabilities                                                                       |                                                                                                                                |                           |         |              |         |   |         |        
|                                                                                         
|                                                                                         
|                                                                                         
|                                                                                         
|                                                                                          | Trade accounts payable                                                                                                         |                           | $       | 130,951      |         |   | $       | 115,396 |        
|                                                                                         
|                                                                                         
|                                                                                         
|                                                                                         
|                                                                                          | Accrued expenses                                                                                                               |                           |         | 69,534       |         |   |         | 65,184  |        
|                                                                                         
|                                                                                         
|                                                                                         
|                                                                                         
|                                                                                          | Current portion of long-term liabilities                                                                                       |                           |         | 4,832        |         |   |         | 4,161   |        
|                                                                                          |                                                                                                                                |                           |         |              |         |   |         |        
|                                                                                          |                                                                                                                                | Total Current Liabilities |         |              | 205,317 |   |         |         | 184,741 | 
|                                                                                         
|                                                                                         
|                                                                                         
|                                                                                         
|Long-Term Liabilities, less current portion
    8.375% Senior Subordinated Notes due 2014 |                                                                                                                                |                           | 210,000 |              |         |   | 210,000 |        
|                                                                                         
|                                                                                         
|                                                                                         
|                                                                                         
|                                                                                          | Revolving credit                                                                                                               |                           |         | 150,900      |         |   |         | 128,300 |        
|                                                                                         
|                                                                                         
|                                                                                         
|                                                                                         
|                                                                                          | Other long-term debt                                                                                                           |                           |         | 5,804        |         |   |         | 6,705   |        
|                                                                                         
|                                                                                         
|                                                                                         
|                                                                                         
|                                                                                          | Deferred tax liability                                                                                                         |                           |         | 3,176        |         |   |         | 3,176   |        
|                                                                                         
|                                                                                         
|                                                                                         
|                                                                                         
|                                                                                          | Other postretirement benefits and other long-term
    liabilities                                                              |                           |         | 25,314       |         |   |         | 26,174  |        
|                                                                                          |                                                                                                                                |                           |         |              |         |   |         |        
|                                                                                          |                                                                                                                                |                           | 395,194 |              |         |   | 374,355 |        
|Shareholders Equity                                                                      |                                                                                                                                |                           |         |              |         |   |         |        
|                                                                                         
|                                                                                         
|                                                                                         
|                                                                                         
|                                                                                          | Common Stock, par value $1 a share                                                                                             |                           |         | -0-          |         |   |         | -0-     |        
|                                                                                         
|                                                                                         
|                                                                                         
|                                                                                         
|                                                                                          | Additional paid-in capital                                                                                                     |                           |         | 64,844       |         |   |         | 64,844  |        
|                                                                                         
|                                                                                         
|                                                                                         
|                                                                                         
|                                                                                          | Retained earnings                                                                                                              |                           |         | 47,878       |         |   |         | 42,887  |        
|                                                                                         
|                                                                                         
|                                                                                         
|                                                                                         
|                                                                                          | Accumulated other comprehensive loss                                                                                           |                           |         | (1,624       | )       |   |         | (2,102  | )      
|                                                                                          |                                                                                                                                |                           |         |              |         |   |         |        
|                                                                                          |                                                                                                                                |                           | 111,098 |              |         |   | 105,629 |        
|                                                                                          |                                                                                                                                |                           |         |              |         |   |         |        
|                                                                                          |                                                                                                                                | $                         | 711,609 |              |         | $ | 664,725 |        
|                                                                                          |                                                                                                                                |                           |         |              |         |   |         |        



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

See notes to consolidated financial statements.

3



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PARK-OHIO INDUSTRIES, INC. AND SUBSIDIARIES




CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)

|                                             |                            |                        |         |        |  |   |         |        | 
|-------------------------------------------- | -------------------------- | ---------------------- | ------- | ------ |  | - | ------- | ------ | 
|                                             |                            |                       
|                                             |                            | Three Months Ended    
|                                             |                            | March 31,             
|                                             |                            |                       
|                                             |                            | 2006                   |         | 2005  
|                                             |                            |                        |         |       
|                                             |                            |                       
|                                             |                            | (Amounts in thousands 
|                                             |                            | except per share data)
|                                            
|                                            
|                                            
|                                            
|Net sales                                    |                            | $                      | 260,221 |        |  | $ | 228,883 |       
|                                            
|                                            
|                                            
|                                            
|Cost of products sold                        |                            |                        | 223,334 |        |  |   | 193,787 |       
|                                             |                            |                        |         |        |  |   |         |       
|                                             | Gross profit               |                        |         | 36,887 |  |   |         | 35,096 | 
|                                            
|                                            
|                                            
|                                            
|Selling, general and administrative expenses |                            |                        | 21,453  |        |  |   | 21,559  |       
|                                             |                            |                        |         |        |  |   |         |       
|                                             | Operating income           |                        |         | 15,434 |  |   |         | 13,537 | 
|                                            
|                                            
|                                            
|                                            
|Interest expense                             |                            |                        | 7,370   |        |  |   | 6,459   |       
|                                             |                            |                        |         |        |  |   |         |       
|                                             | Income before income taxes |                        |         | 8,064  |  |   |         | 7,078  | 
|                                            
|                                            
|                                            
|                                            
|Income taxes                                 |                            |                        | 3,073   |        |  |   | 799     |       
|                                             |                            |                        |         |        |  |   |         |       
|                                             | Net income                 |                        | $       | 4,991  |  |   | $       | 6,279  | 
|                                             |                            |                        |         |        |  |   |         |       

See notes to consolidated financial statements.

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PARK-OHIO INDUSTRIES, INC. AND SUBSIDIARIES




CONSOLIDATED STATEMENT OF SHAREHOLDERS EQUITY
(UNAUDITED)

|                           |                                         |                        |     |            |  |          |        |               |  |       |        |       |  |   |        |     |  |   |         |       | 
|-------------------------- | --------------------------------------- | ---------------------- | --- | ---------- |  | -------- | ------ | ------------- |  | ----- | ------ | ----- |  | - | ------ | --- |  | - | ------- | ----- | 
|                           |                                         |                        |     |            |  |          |        | Accumulated   |  |      
|                           |                                         |                        |     |            |  |          |        | Other         |  |      
|                           |                                         |                        |     | Additional |  |          |        | Comprehensive |  |      
|                           |                                         | Common                 |     | Paid-In    |  | Retained |        | Income        |  |      
|                           |                                         | Stock                  |     | Capital    |  | Earnings |        | (Loss)        |  | Total
|                           |                                         |                        |     |            |  |          |        |               |  |      
|                           |                                         |                       
|                           |                                         | (Dollars in thousands)
|                          
|                          
|                          
|                          
|Balance at January 1, 2006 |                                         | $                      | -0- |            |  | $        | 64,844 |               |  | $     | 42,887 |       |  | $ | (2,102 | )   |  | $ | 105,629 |      
|                          
|                          
|                          
|                          
|Comprehensive income:      |                                         |                        |     |            |  |          |        |               |  |       |        |       |  |   |        |     |  |   |         |      
|                          
|                          
|                          
|                          
|                           | Net income                              |                        |     |            |  |          |        |               |  |       |        | 4,991 |  |   |        |     |  |   |         | 4,991 | 
|                          
|                          
|                          
|                          
|                           | Foreign currency translation adjustment |                        |     |            |  |          |        |               |  |       |        |       |  |   |        | 478 |  |   |         | 478   | 
|                           |                                         |                        |     |            |  |          |        |               |  |       |        |       |  |   |        |     |  |   |         |      
|                           | Comprehensive income                    |                        |     |            |  |          |        |               |  |       |        |       |  |   |        |     |  |   |         | 5,469 | 
|                           |                                         |                        |     |            |  |          |        |               |  |       |        |       |  |   |        |     |  |   |         |      
|Balance at March 31, 2006  |                                         | $                      | -0- |            |  | $        | 64,844 |               |  | $     | 47,878 |       |  | $ | (1,624 | )   |  | $ | 111,098 |      
|                           |                                         |                        |     |            |  |          |        |               |  |       |        |       |  |   |        |     |  |   |         |      

See notes to consolidated financial statements.

5



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##### Table of Contents



PARK-OHIO INDUSTRIES, INC. AND SUBSIDIARIES




CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

|                                                 |                                                                                   |                                           |                                       |        |         |         |        |        |         |         |  
|------------------------------------------------ | --------------------------------------------------------------------------------- | ----------------------------------------- | ------------------------------------- | ------ | ------- | ------- | ------ | ------ | ------- | ------- | -
|                                                 |                                                                                   |                                          
|                                                 |                                                                                   | Three Months Ended                       
|                                                 |                                                                                   | March 31,                                
|                                                 |                                                                                   |                                          
|                                                 |                                                                                   | 2006                                      |                                       | 2005  
|                                                 |                                                                                   |                                           |                                       |       
|                                                 |                                                                                   |                                          
|                                                 |                                                                                   | (Dollars in thousands)                   
|                                                
|                                                
|                                                
|                                                
|OPERATING ACTIVITIES                             |                                                                                   |                                           |                                       |        |         |         |        |       
|                                                
|                                                
|                                                
|                                                
|                                                 | Net income                                                                        |                                           | $                                     | 4,991  |         |         | $      | 6,279  |        
|                                                
|                                                
|                                                
|                                                
|                                                 | Adjustments to reconcile net income to net cash
    used by operating activities: |                                           |                                       |        |         |         |        |        |        
|                                                
|                                                
|                                                
|                                                
|                                                 |                                                                                   | Depreciation and amortization             |                                       |        | 4,780   |         |        |        | 4,447   |        
|                                                
|                                                
|                                                
|                                                
|                                                 | Changes in operating assets and liabilities:                                      |                                           |                                       |        |         |         |        |        |        
|                                                
|                                                
|                                                
|                                                
|                                                 |                                                                                   | Accounts receivable                       |                                       |        | (26,501 | )       |        |        | (22,049 | )      
|                                                
|                                                
|                                                
|                                                
|                                                 |                                                                                   | Inventories and other current assets      |                                       |        | (21,492 | )       |        |        | (9,509  | )      
|                                                
|                                                
|                                                
|                                                
|                                                 |                                                                                   | Accounts payable and accrued expenses     |                                       |        | 18,997  |         |        |        | 613     |        
|                                                
|                                                
|                                                
|                                                
|                                                 |                                                                                   | Other                                     |                                       |        | (952    | )       |        |        | (1,000  | )      
|                                                 |                                                                                   |                                           |                                       |        |         |         |        |       
|                                                 |                                                                                   |                                           | Net Cash Used by Operating Activities |        |         | (20,177 | )      |        |         | (21,219 | )
|                                                
|                                                
|                                                
|                                                
|INVESTING ACTIVITIES                             |                                                                                   |                                           |                                       |        |         |         |        |       
|                                                
|                                                
|                                                
|                                                
|                                                 | Purchases of property, plant and equipment, net                                   |                                           |                                       | (3,370 | )       |         |        | (3,559 | )      
|                                                
|                                                
|                                                
|                                                
|                                                 | Acquisitions, net of cash acquired                                                |                                           |                                       | (3,219 | )       |         |        | -0-    |        
|                                                
|                                                
|                                                
|                                                
|                                                 | Proceeds from sale of assets held for sale                                        |                                           |                                       | -0-    |         |         |        | 1,100  |        
|                                                 |                                                                                   |                                           |                                       |        |         |         |        |       
|                                                 |                                                                                   | Net Cash Used by Investing Activities     |                                       |        | (6,589  | )       |        |        | (2,459  | )      
|                                                
|                                                
|                                                
|                                                
|FINANCING ACTIVITIES                             |                                                                                   |                                           |                                       |        |         |         |        |       
|                                                
|                                                
|                                                
|                                                
|                                                 | Proceeds from debt, net                                                           |                                           |                                       | 22,370 |         |         |        | 19,196 |        
|                                                 |                                                                                   |                                           |                                       |        |         |         |        |       
|                                                 |                                                                                   | Net Cash Provided by Financing Activities |                                       |        | 22,370  |         |        |        | 19,196  |        
|                                                 |                                                                                   |                                           |                                       |        |         |         |        |       
|Decrease in Cash and Cash Equivalents            |                                                                                   |                                           | (4,396                                | )      |         |         | (4,482 | )     
|                                                
|                                                
|                                                
|                                                
|Cash and Cash Equivalents at Beginning of Period |                                                                                   |                                           | 17,868                                |        |         |         | 6,407  |       
|                                                 |                                                                                   |                                           |                                       |        |         |         |        |       
|Cash and Cash Equivalents at End of Period       |                                                                                   | $                                         | 13,472                                |        |         | $       | 1,925  |       
|                                                 |                                                                                   |                                           |                                       |        |         |         |        |       
|Taxes paid                                       |                                                                                   | $                                         | 1,182                                 |        |         | $       | 744    |       
|                                                
|                                                
|                                                
|                                                
|Interest paid                                    |                                                                                   |                                           | 2,236                                 |        |         |         | 1,431  |       

See notes to consolidated financial statements.

6



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##### Table of Contents



PARK-OHIO INDUSTRIES, INC. AND SUBSIDIARIES



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)


March 31, 2006

(Dollar amounts in Thousands  except per share
data)


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, 2006 are not
necessarily indicative of the results that may be expected for
the year ending December 31, 2006. 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, 2005.
Certain amounts in the prior years financial statements
have been reclassified to conform to the current year
presentation.

NOTE B  Recent Accounting Pronouncements

The FASB issued SFAS No. 154, Accounting Changes
and Error Corrections, which replaces APB Opinion
No. 20, Accounting Changes, and Statement
No. 3, Reporting Accounting Changes in Interim
Financial Statements, in May 2005. The statement changes
the requirements for the accounting and reporting of a change in
accounting principle and is applicable to all voluntary changes
in accounting principle. It also applies to changes required by
an accounting pronouncement if that pronouncement does not
include specific transition provisions. The statement requires
retrospective application to prior periods financial
statements of changes in accounting principle unless it is
impractical to determine the period specific effects or the
cumulative effect of the change. The correction of an error by
the restatement of previously issued financial statements is
also addressed by the statement. The Company adopted this
statement effective January 1, 2006 as prescribed and its
adoption did not have any impact on the Companys results
of operations or financial condition.

NOTE C  Acquisitions

In January 2006, the Company completed the acquisition of all of
the shares of Foundry Service GmbH (Foundry Service)
for approximately $3,219, which resulted in additional goodwill
of $2,313. The acquisition was funded with borrowings from
foreign subsidiaries of the Company. The acquisition was not
deemed significant as defined in Regulation S-X.

On December 23, 2005, the Company completed the acquisition
of the assets of Lectrotherm, Inc. (Lectrotherm) for
$5,125 in cash. The acquisition was funded with borrowings under
the Companys revolving credit facility. The purchase price
and the results of operations of Lectrotherm prior to its date
of acquisition were not deemed significant as defined in
Regulation S-X. The preliminary allocation of the

7



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##### Table of Contents



PARK-OHIO INDUSTRIES, INC. AND SUBSIDIARIES


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

purchase price has been performed based on the assignments of
fair values to assets acquired and liabilities assumed. The
allocation of the purchase price is as follows:

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

On July 20, 2005, the Company completed the acquisition of
the assets of Purchased Parts Group, Inc. (PPG) for
$7,000 in cash, $483 in the form of a short-term note payable
and the assumption of approximately $13,255 of trade
liabilities. The acquisition was funded with borrowings under
the Companys revolving credit facility. The purchase price
and the results of operations of PPG prior to its date of
acquisition were not deemed significant as defined in
Regulation S-X. The results of operations for PPG have been
included in the Companys financial statements since
July 20, 2005. The preliminary allocation of the purchase
price is as follows:

|                       |                     |   |       |         |  
|---------------------- | ------------------- | - | ----- | ------- | -
|                      
|                      
|                      
|                      
|Cash acquisition price |                     | $ | 7,000 |        
|Assets                 |                     |   |       |        
|                      
|                      
|                      
|                      
|                       | Accounts receivable |   |       | (10,894 | )
|                      
|                      
|                      
|                      
|                       | Inventories         |   |       | (10,606 | )
|                      
|                      
|                      
|                      
|                       | Prepaid expenses    |   |       | (1,201  | )
|                      
|                      
|                      
|                      
|                       | Equipment           |   |       | (407    | )
|Liabilities            |                     |   |       |        
|                      
|                      
|                      
|                      
|                       | Accounts payable    |   |       | 13,255  |  
|                      
|                      
|                      
|                      
|                       | Accrued expenses    |   |       | 2,370   |  
|                      
|                      
|                      
|                      
|                       | Note payable        |   |       | 483     |  
|                       |                     |   |       |        
|Goodwill               |                     | $ | -0-   |        
|                       |                     |   |       |        

The Company has a plan for integration activities. In accordance
with FASB EITF Issue No. 95-3, Recognition of
Liabilities in Connection with a Purchase Business
Combination, the Company recorded

8



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##### Table of Contents



PARK-OHIO INDUSTRIES, INC. AND SUBSIDIARIES


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

accruals for severance, exit and relocation costs in the
purchase price allocation. A reconciliation of the beginning and
ending accrual balance is as follows:

|                             |  |               |      |            |  |       |       |   |  |   |        |  
|---------------------------- |  | ------------- | ---- | ---------- |  | ----- | ----- | - |  | - | ------ | -
|                             |  | Severance and |      | Exit and   |  |      
|                             |  | Personnel     |      | Relocation |  | Total
|                             |  |               |      |            |  |      
|Balance at June 30, 2005     |  | $             | -0-  |            |  | $     | -0-   |   |  | $ | -0-    |  
|                            
|                            
|                            
|                            
|Add: Accruals                |  |               | 250  |            |  |       | 1,750 |   |  |   | 2,000  |  
|                            
|                            
|                            
|                            
|Less: Payments               |  |               | (551 | )          |  |       | (594  | ) |  |   | (1,145 | )
|                            
|                            
|                            
|                            
|Transfers                    |  |               | 400  |            |  |       | (400  | ) |  |   | -0-    |  
|                             |  |               |      |            |  |       |       |   |  |   |        |  
|Balance at December 31, 2005 |  | $             | 99   |            |  | $     | 756   |   |  | $ | 855    |  
|                            
|                            
|                            
|                            
|Less: Payments               |  |               | (43  | )          |  |       | (236  | ) |  |   | (279   | )
|                            
|                            
|                            
|                            
|Transfers                    |  |               | (56  | )          |  |       | 56    |   |  |   | -0-    |  
|                             |  |               |      |            |  |       |       |   |  |   |        |  
|Balance at March 31, 2006    |  | $             | -0-  |            |  | $     | 576   |   |  | $ | 576    |  
|                             |  |               |      |            |  |       |       |   |  |   |        |  

NOTE D  Inventories

The components of inventory consist of the following:

|                           |  |           |         |              |  |   |         | 
|-------------------------- |  | --------- | ------- | ------------ |  | - | ------- | 
|                           |  | March 31, |         | December 31,
|                           |  | 2006      |         | 2005        
|                           |  |           |         |             
|Finished goods             |  | $         | 139,703 |              |  | $ | 128,465 | 
|                          
|                          
|                          
|                          
|Work in process            |  |           | 48,145  |              |  |   | 32,547  | 
|                          
|                          
|                          
|                          
|Raw materials and supplies |  |           | 32,730  |              |  |   | 29,541  | 
|                           |  |           |         |              |  |   |         | 
|                           |  | $         | 220,578 |              |  | $ | 190,553 | 
|                           |  |           |         |              |  |   |         | 

NOTE E  Pension Plans and Other Postretirement
Benefits

The components of net periodic benefit cost recognized during
interim periods was as follows:

|                                     |  |                  |        |                |  |      |        |      |  |   |     |   |  |   |     |  
|------------------------------------ |  | ---------------- | ------ | -------------- |  | ---- | ------ | ---- |  | - | --- | - |  | - | --- | -
|                                     |  |                  |        |                |  |     
|                                     |  |                  |        | Postretirement
|                                     |  | Pension Benefits |        | Benefits      
|                                     |  |                  |        |               
|                                     |  |                 
|                                     |  | Three Months    
|                                     |  | Ended March 31, 
|                                     |  |                 
|                                     |  | 2006             |        | 2005           |  | 2006 |        | 2005
|                                     |  |                  |        |                |  |      |        |     
|Service costs                        |  | $                | 87     |                |  | $    | 97     |      |  | $ | 50  |   |  | $ | 35  |  
|                                    
|                                    
|                                    
|                                    
|Interest costs                       |  |                  | 726    |                |  |      | 796    |      |  |   | 323 |   |  |   | 348 |  
|                                    
|                                    
|                                    
|                                    
|Expected return on plan assets       |  |                  | (2,078 | )              |  |      | (2,211 | )    |  |   | -0- |   |  |   | -0- |  
|                                    
|                                    
|                                    
|                                    
|Transition obligation                |  |                  | (12    | )              |  |      | (12    | )    |  |   | -0- |   |  |   | -0- |  
|                                    
|                                    
|                                    
|                                    
|Amortization of prior service cost   |  |                  | 39     |                |  |      | 41     |      |  |   | (16 | ) |  |   | (17 | )
|                                    
|                                    
|                                    
|                                    
|Recognized net actuarial (gain) loss |  |                  | 81     |                |  |      | (60    | )    |  |   | 94  |   |  |   | 50  |  
|                                     |  |                  |        |                |  |      |        |      |  |   |     |   |  |   |     |  
|Benefit (income) costs               |  | $                | (1,157 | )              |  | $    | (1,349 | )    |  | $ | 451 |   |  | $ | 416 |  
|                                     |  |                  |        |                |  |      |        |      |  |   |     |   |  |   |     |  

NOTE F  Segments

The Company operates through three segments: Integrated
Logistics Solutions (ILS), Aluminum Products and
Manufactured Products. ILS is a 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

9



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PARK-OHIO INDUSTRIES, INC. AND SUBSIDIARIES


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

management services. Aluminum Products manufactures cast
aluminum components for automotive, agricultural equipment,
construction equipment, heavy-duty truck and marine equipment
industries. 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.

Results by business segment were as follows:

|                            |                       |                    |         |         |  |   |         |         | 
|--------------------------- | --------------------- | ------------------ | ------- | ------- |  | - | ------- | ------- | 
|                            |                       |                   
|                            |                       | Three Months Ended
|                            |                       | March 31,         
|                            |                       |                   
|                            |                       | 2006               |         | 2005   
|                            |                       |                    |         |        
|Net sales:                  |                       |                    |         |         |  |   |         |        
|                           
|                           
|                           
|                           
|                            | ILS                   |                    | $       | 150,159 |  |   | $       | 126,887 | 
|                           
|                           
|                           
|                           
|                            | Aluminum products     |                    |         | 42,702  |  |   |         | 42,890  | 
|                           
|                           
|                           
|                           
|                            | Manufactured products |                    |         | 67,360  |  |   |         | 59,106  | 
|                            |                       |                    |         |         |  |   |         |        
|                            |                       | $                  | 260,221 |         |  | $ | 228,883 |        
|                            |                       |                    |         |         |  |   |         |        
|Income before income taxes: |                       |                    |         |         |  |   |         |        
|                           
|                           
|                           
|                           
|                            | ILS                   |                    | $       | 10,422  |  |   | $       | 8,204   | 
|                           
|                           
|                           
|                           
|                            | Aluminum products     |                    |         | 2,040   |  |   |         | 2,423   | 
|                           
|                           
|                           
|                           
|                            | Manufactured products |                    |         | 5,662   |  |   |         | 5,813   | 
|                            |                       |                    |         |         |  |   |         |        
|                            |                       |                    | 18,124  |         |  |   | 16,440  |        
|                           
|                           
|                           
|                           
|Corporate costs             |                       |                    | (2,690  | )       |  |   | (2,903  | )      
|                           
|                           
|                           
|                           
|Interest expense            |                       |                    | (7,370  | )       |  |   | (6,459  | )      
|                            |                       |                    |         |         |  |   |         |        
|                            |                       | $                  | 8,064   |         |  | $ | 7,078   |        
|                            |                       |                    |         |         |  |   |         |        

|                                     |                       |           |         |              |  |   |         |         | 
|------------------------------------ | --------------------- | --------- | ------- | ------------ |  | - | ------- | ------- | 
|                                     |                       | March 31, |         | December 31,
|                                     |                       | 2006      |         | 2005        
|                                     |                       |           |         |             
|Identifiable assets were as follows: |                       |           |         |              |  |   |         |        
|                                    
|                                    
|                                    
|                                    
|                                     | ILS                   |           | $       | 346,563      |  |   | $       | 323,176 | 
|                                    
|                                    
|                                    
|                                    
|                                     | Aluminum products     |           |         | 107,128      |  |   |         | 101,489 | 
|                                    
|                                    
|                                    
|                                    
|                                     | Manufactured products |           |         | 183,326      |  |   |         | 169,004 | 
|                                    
|                                    
|                                    
|                                    
|                                     | General corporate     |           |         | 74,592       |  |   |         | 71,056  | 
|                                     |                       |           |         |              |  |   |         |        
|                                     |                       | $         | 711,609 |              |  | $ | 664,725 |        
|                                     |                       |           |         |              |  |   |         |        

NOTE G  Comprehensive Income

Total comprehensive income was as follows:

|                             |  |                    |       |      |  |   |       | 
|---------------------------- |  | ------------------ | ----- | ---- |  | - | ----- | 
|                             |  |                   
|                             |  | Three Months Ended
|                             |  | March 31,         
|                             |  |                   
|                             |  | 2006               |       | 2005
|                             |  |                    |       |     
|Net income                   |  | $                  | 4,991 |      |  | $ | 6,279 | 
|                            
|                            
|                            
|                            
|Foreign currency translation |  |                    | 478   |      |  |   | 329   | 
|                             |  |                    |       |      |  |   |       | 
|Total comprehensive income   |  | $                  | 5,469 |      |  | $ | 6,608 | 
|                             |  |                    |       |      |  |   |       | 

10



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##### Table of Contents



PARK-OHIO INDUSTRIES, INC. AND SUBSIDIARIES


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

The components of accumulated comprehensive loss at
March 31, 2006 and December 31, 2005 are as follows:

|                                        |  |           |        |              |  |   |        |  
|--------------------------------------- |  | --------- | ------ | ------------ |  | - | ------ | -
|                                        |  | March 31, |        | December 31,
|                                        |  | 2006      |        | 2005        
|                                        |  |           |        |             
|Foreign currency translation adjustment |  | $         | (3,734 | )            |  | $ | (3,256 | )
|                                       
|                                       
|                                       
|                                       
|Minimum pension liability               |  |           | 5,358  |              |  |   | 5,358  |  
|                                        |  |           |        |              |  |   |        |  
|                                        |  | $         | 1,624  |              |  | $ | 2,102  |  
|                                        |  |           |        |              |  |   |        |  

NOTE H  Restructuring Activities

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, 2003 and 2005, as the Companys restructuring efforts
continued and evolved. For further details on the restructuring
activities, see Note M to the audited financial statements
contained in the Companys Annual Report on Form 10-K
for the year ended December 31, 2005.

The accrued liability balance for severance and exit costs and
related cash payments during the three months ended
March 31, 2006 consisted of:

|                             |  |   |     |  
|---------------------------- |  | - | --- | -
|                            
|                            
|                            
|                            
|Balance at December 31, 2005 |  | $ | 596 |  
|                            
|                            
|                            
|                            
|Cash payments                |  |   | (80 | )
|                             |  |   |     |  
|Balance at March 31, 2006    |  | $ | 516 |  
|                             |  |   |     |  

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, 2006 |                                                 | $ | 3,566 |      
|                          
|                          
|                          
|                          
|                           | Claims paid during the quarter                  |   |       | (915  | )
|                          
|                          
|                          
|                          
|                           | Additional warranties issued during the quarter |   |       | 1,040 |  
|                          
|                          
|                          
|                          
|                           | Acquired warranty liabilities                   |   |       | 164   |  
|                           |                                                 |   |       |      
|Balance at March 31, 2006  |                                                 | $ | 3,855 |      
|                           |                                                 |   |       |      

NOTE J  Income Taxes

In 2006, the Company began recording a quarterly provision for
federal income taxes resulting in a total effective income tax
rate of approximately 38%, compared to 11% for the corresponding
period in 2005. Only foreign and state income taxes were
provided for in 2005 because federal income taxes were offset by
net operating loss carryforwards that were not recognized
previously. At December 31, 2005, the Company had net
operating loss carryforwards of approximately $41,000, which
should preclude the cash payment of federal income taxes in
2006. In the fourth quarter of 2006, if a portion or all of its
remaining deferred tax asset will more likely than not be
realized, the Company will reverse into income the appropriate
portion of its remaining tax valuation allowance of
approximately $5,000.

11



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PARK-OHIO INDUSTRIES, INC. AND SUBSIDIARIES


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

NOTE K  Derivatives and Hedging

The Company recognizes all derivative financial instruments as
either assets or liabilities at fair value. The Company has no
derivative instruments that are classified as fair value hedges.
Changes in the fair value of derivative instruments that are
classified as cash flow hedges are recognized in other
comprehensive income until such time as the hedged items are
recognized in net income.

During the first quarter of 2006, the Company entered into
forward contracts for the purpose of hedging exposure to changes
in the value of accounts receivable, primarily euros against the
U.S. dollar, for a notional amount of $1,000, which was
outstanding at March 31, 2006. These transactions are
considered cash flow hedges. The fair market value of these
transactions at March 31, 2006 was approximately the
notional amount and therefore, no amount has been recognized in
other comprehensive income (loss). Because there is no
ineffectiveness on the cash flow hedges, all changes in fair
value of these derivatives are recorded in equity and not
included in the current periods income statement.

NOTE L  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, 2006 and December 31, 2005, consolidating
condensed statements of income for the three months ended
March 31, 2006 and 2005, consolidating condensed statements
of cash flows for the three months ended March 31, 2006 and
2005 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.

12



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##### Table of Contents



PARK-OHIO INDUSTRIES, INC. AND SUBSIDIARIES


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

PARK-OHIO INDUSTRIES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATING BALANCE SHEET


March 31, 2006


|                                            |                                                                   |                                            |         |              |         |               |         |                    |         |              |        |        |         |  |          |         |            |   |         |         |         | 
|------------------------------------------- | ----------------------------------------------------------------- | ------------------------------------------ | ------- | ------------ | ------- | ------------- | ------- | ------------------ | ------- | ------------ | ------ | ------ | ------- |  | -------- | ------- | ---------- | - | ------- | ------- | ------- | 
|                                            |                                                                   |                                            |         | Combined     |         | Combined      |         |                    |         |             
|                                            |                                                                   |                                            |         | Guarantor    |         | Non-Guarantor |         | Reclassifications/ |         |             
|                                            |                                                                   | Parent                                     |         | Subsidiaries |         | Subsidiaries  |         | Eliminations       |         | Consolidated
|                                            |                                                                   |                                            |         |              |         |               |         |                    |         |             
|                                            |                                                                   |                                           
|                                            |                                                                   | (In thousands)                            
|                                           
|                                           
|                                           
|                                           
|ASSETS                                     
|                                           
|                                           
|                                           
|                                           
|Current assets:                             |                                                                   |                                            |         |              |         |               |         |                    |         |              |        |        |         |  |          |         |            |   |         |        
|                                           
|                                           
|                                           
|                                           
|                                            | Cash and cash equivalents                                         |                                            | $       | (2,167       | )       |               | $       | (10,587            | )       |              | $      | 8,013  |         |  | $        | 18,213  |            |   | $       | 13,472  |        
|                                           
|                                           
|                                           
|                                           
|                                            | Accounts receivable, net                                          |                                            |         | -0-          |         |               |         | 154,567            |         |              |        | 26,147 |         |  |          | -0-     |            |   |         | 180,714 |        
|                                           
|                                           
|                                           
|                                           
|                                            | Inventories                                                       |                                            |         | -0-          |         |               |         | 182,869            |         |              |        | 37,709 |         |  |          | -0-     |            |   |         | 220,578 |        
|                                           
|                                           
|                                           
|                                           
|                                            | Other current assets                                              |                                            |         | 579          |         |               |         | 11,616             |         |              |        | 1,502  |         |  |          | 6,146   |            |   |         | 19,843  |        
|                                           
|                                           
|                                           
|                                           
|                                            | Deferred tax assets                                               |                                            |         | -0-          |         |               |         | -0-                |         |              |        | -0-    |         |  |          | 8,627   |            |   |         | 8,627   |        
|                                            |                                                                   |                                            |         |              |         |               |         |                    |         |              |        |        |         |  |          |         |            |   |         |        
|                                            |                                                                   | Total Current Assets                       |         |              | (1,588  | )             |         |                    | 338,465 |              |        |        | 73,371  |  |          |         | 32,986     |   |         |         | 443,234 | 
|                                           
|                                           
|                                           
|                                           
|Investment in subsidiaries                  |                                                                   |                                            | 372,080 |              |         |               | -0-     |                    |         |              | -0-    |        |         |  | (372,080 | )       |            |   | -0-     |        
|                                           
|                                           
|                                           
|                                           
|Inter-company advances                      |                                                                   |                                            | 295,252 |              |         |               | 404,668 |                    |         |              | 10,378 |        |         |  | (710,298 | )       |            |   | -0-     |        
|                                           
|                                           
|                                           
|                                           
|Property, Plant and Equipment, net          |                                                                   |                                            | 2,596   |              |         |               | 97,344  |                    |         |              | 12,546 |        |         |  | -0-      |         |            |   | 112,486 |        
|                                           
|                                           
|                                           
|                                           
|Other Assets:                               |                                                                   |                                            |         |              |         |               |         |                    |         |              |        |        |         |  |          |         |            |   |         |        
|                                           
|                                           
|                                           
|                                           
|                                            | Goodwill                                                          |                                            |         | -0-          |         |               |         | 78,424             |         |              |        | 6,670  |         |  |          | -0-     |            |   |         | 85,094  |        
|                                           
|                                           
|                                           
|                                           
|                                            | Other                                                             |                                            |         | 34,714       |         |               |         | 37,380             |         |              |        | 659    |         |  |          | (1,958  | )          |   |         | 70,795  |        
|                                            |                                                                   |                                            |         |              |         |               |         |                    |         |              |        |        |         |  |          |         |            |   |         |        
|                                            |                                                                   | Total Other Assets                         |         |              | 34,714  |               |         |                    | 115,804 |              |        |        | 7,329   |  |          |         | (1,958     | ) |         |         | 155,889 | 
|                                            |                                                                   |                                            |         |              |         |               |         |                    |         |              |        |        |         |  |          |         |            |   |         |        
|                                            |                                                                   | Total Assets                               |         | $            | 703,054 |               |         | $                  | 956,281 |              |        | $      | 103,624 |  |          | $       | (1,051,350 | ) |         | $       | 711,609 | 
|                                            |                                                                   |                                            |         |              |         |               |         |                    |         |              |        |        |         |  |          |         |            |   |         |        
|                                           
|                                           
|                                           
|                                           
|                                           
|LIABILITIES AND SHAREHOLDERS
    EQUITY   
|                                           
|                                           
|                                           
|                                           
|Current Liabilities:                        |                                                                   |                                            |         |              |         |               |         |                    |         |              |        |        |         |  |          |         |            |   |         |        
|                                           
|                                           
|                                           
|                                           
|                                            | Trade accounts payable                                            |                                            | $       | 1,077        |         |               | $       | 111,621            |         |              | $      | 11,932 |         |  | $        | 6,321   |            |   | $       | 130,951 |        
|                                           
|                                           
|                                           
|                                           
|                                            | Accrued expenses                                                  |                                            |         | 11,119       |         |               |         | 36,036             |         |              |        | 16,928 |         |  |          | 5,451   |            |   |         | 69,534  |        
|                                           
|                                           
|                                           
|                                           
|                                            | Current portion of long-term liabilities                          |                                            |         | -0-          |         |               |         | 1,009              |         |              |        | 1,306  |         |  |          | 2,517   |            |   |         | 4,832   |        
|                                            |                                                                   |                                            |         |              |         |               |         |                    |         |              |        |        |         |  |          |         |            |   |         |        
|                                            |                                                                   | Total Current Liabilities                  |         |              | 12,196  |               |         |                    | 148,666 |              |        |        | 30,166  |  |          |         | 14,289     |   |         |         | 205,317 | 
|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                |                                            |         | 150,900      |         |               |         | -0-                |         |              |        | -0-    |         |  |          | -0-     |            |   |         | 150,900 |        
|                                           
|                                           
|                                           
|                                           
|                                            | Other long-term debt                                              |                                            |         | -0-          |         |               |         | 34,451             |         |              |        | 2,322  |         |  |          | (30,969 | )          |   |         | 5,804   |        
|                                           
|                                           
|                                           
|                                           
|                                            | Deferred tax liability                                            |                                            |         | -0-          |         |               |         | -0-                |         |              |        | -0-    |         |  |          | 3,176   |            |   |         | 3,176   |        
|                                           
|                                           
|                                           
|                                           
|                                            | Other postretirement benefits and other long-term
    liabilities |                                            |         | 3,415        |         |               |         | 21,468             |         |              |        | 2,948  |         |  |          | (2,517  | )          |   |         | 25,314  |        
|                                            |                                                                   |                                            |         |              |         |               |         |                    |         |              |        |        |         |  |          |         |            |   |         |        
|                                            |                                                                   | Total Long-Term Liabilities                |         |              | 364,315 |               |         |                    | 55,919  |              |        |        | 5,270   |  |          |         | (30,310    | ) |         |         | 395,194 | 
|                                           
|                                           
|                                           
|                                           
|Inter-company advances                      |                                                                   |                                            | 219,072 |              |         |               | 463,931 |                    |         |              | 21,941 |        |         |  | (704,944 | )       |            |   | -0-     |        
|                                           
|                                           
|                                           
|                                           
|Shareholders Equity                        |                                                                   |                                            | 107,471 |              |         |               | 287,765 |                    |         |              | 46,247 |        |         |  | (330,385 | )       |            |   | 111,098 |        
|                                            |                                                                   |                                            |         |              |         |               |         |                    |         |              |        |        |         |  |          |         |            |   |         |        
|                                            |                                                                   | Total Liabilities and Shareholders Equity |         | $            | 703,054 |               |         | $                  | 956,281 |              |        | $      | 103,624 |  |          | $       | (1,051,350 | ) |         | $       | 711,609 | 
|                                            |                                                                   |                                            |         |              |         |               |         |                    |         |              |        |        |         |  |          |         |            |   |         |        

13



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##### Table of Contents



PARK-OHIO INDUSTRIES, INC. AND SUBSIDIARIES


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

PARK-OHIO INDUSTRIES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATING BALANCE SHEET


December 31, 2005


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

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 INCOME


For the Three Months Ended March 31, 2006


|                                  |                                              |                |        |              |   |               |         |              |  |              |        |       |  |   |      |     |  |   |         |        | 
|--------------------------------- | -------------------------------------------- | -------------- | ------ | ------------ | - | ------------- | ------- | ------------ |  | ------------ | ------ | ----- |  | - | ---- | --- |  | - | ------- | ------ | 
|                                  |                                              |                |        | Combined     |   | Combined      |         |              |  |             
|                                  |                                              |                |        | Guarantor    |   | Non-Guarantor |         |              |  |             
|                                  |                                              | Parent         |        | Subsidiaries |   | Subsidiaries  |         | Eliminations |  | Consolidated
|                                  |                                              |                |        |              |   |               |         |              |  |             
|                                  |                                              |               
|                                  |                                              | (In thousands)
|                                 
|                                 
|                                 
|                                 
|Net sales                         |                                              | $              | -0-    |              |   | $             | 227,991 |              |  | $            | 32,230 |       |  | $ | -0-  |     |  | $ | 260,221 |       
|                                 
|                                 
|                                 
|                                 
|Cost of sales                     |                                              |                | -0-    |              |   |               | 197,565 |              |  |              | 25,769 |       |  |   | -0-  |     |  |   | 223,334 |       
|                                  |                                              |                |        |              |   |               |         |              |  |              |        |       |  |   |      |     |  |   |         |       
|Gross profit                      |                                              |                | -0-    |              |   |               | 30,426  |              |  |              | 6,461  |       |  |   | -0-  |     |  |   | 36,887  |       
|                                 
|                                 
|                                 
|                                 
|Operating expenses:               |                                              |                |        |              |   |               |         |              |  |              |        |       |  |   |      |     |  |   |         |       
|                                 
|                                 
|                                 
|                                 
|                                  | Selling, general and administrative expenses |                |        | 511          |   |               |         | 17,282       |  |              |        | 3,510 |  |   |      | 150 |  |   |         | 21,453 | 
|                                  |                                              |                |        |              |   |               |         |              |  |              |        |       |  |   |      |     |  |   |         |       
|Operating income (loss)           |                                              |                | (511   | )            |   |               | 13,144  |              |  |              | 2,951  |       |  |   | (150 | )   |  |   | 15,434  |       
|                                 
|                                 
|                                 
|                                 
|Interest expense                  |                                              |                | (1,456 | )            |   |               | 8,596   |              |  |              | 380    |       |  |   | (150 | )   |  |   | 7,370   |       
|                                  |                                              |                |        |              |   |               |         |              |  |              |        |       |  |   |      |     |  |   |         |       
|Income (loss) before income taxes |                                              |                | 945    |              |   |               | 4,548   |              |  |              | 2,571  |       |  |   | -0-  |     |  |   | 8,064   |       
|                                 
|                                 
|                                 
|                                 
|Income taxes                      |                                              |                | 2,131  |              |   |               | 25      |              |  |              | 917    |       |  |   | -0-  |     |  |   | 3,073   |       
|                                  |                                              |                |        |              |   |               |         |              |  |              |        |       |  |   |      |     |  |   |         |       
|                                  | Net income (loss)                            |                | $      | (1,186       | ) |               | $       | 4,523        |  |              | $      | 1,654 |  |   | $    | -0- |  |   | $       | 4,991  | 
|                                  |                                              |                |        |              |   |               |         |              |  |              |        |       |  |   |      |     |  |   |         |       

PARK-OHIO INDUSTRIES, INC. AND SUBSIDIARIES

CONSOLIDATING STATEMENT OF INCOME


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  | 
|                                  |                                              |                |        |              |   |               |         |              |  |              |        |       |  |   |        |     |  |   |         |       

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, 2006


|                                                     |                                                               |                |         |              |   |               |         |              |   |              |        |        |   |   |     |     |  |   |         |        |  
|---------------------------------------------------- | ------------------------------------------------------------- | -------------- | ------- | ------------ | - | ------------- | ------- | ------------ | - | ------------ | ------ | ------ | - | - | --- | --- |  | - | ------- | ------ | -
|                                                     |                                                               |                |         | Combined     |   | Combined      |         |              |   |             
|                                                     |                                                               |                |         | Guarantor    |   | Non-Guarantor |         |              |   |             
|                                                     |                                                               | Parent         |         | Subsidiaries |   | Subsidiaries  |         | Eliminations |   | Consolidated
|                                                     |                                                               |                |         |              |   |               |         |              |   |             
|                                                     |                                                               |               
|                                                     |                                                               | (In thousands)
|                                                    
|                                                    
|                                                    
|                                                    
|Net cash provided (used) by operations               |                                                               | $              | (11,762 | )            |   | $             | (8,051  | )            |   | $            | (364   | )      |   | $ | -0- |     |  | $ | (20,177 | )     
|                                                    
|                                                    
|                                                    
|                                                    
|Cash flows from investing activities:                |                                                               |                |         |              |   |               |         |              |   |              |        |        |   |   |     |     |  |   |         |       
|                                                    
|                                                    
|                                                    
|                                                    
|                                                     | Acquisitions net of cash acquired                             |                |         | -0-          |   |               |         | -0-          |   |              |        | (3,219 | ) |   |     | -0- |  |   |         | (3,219 | )
|                                                    
|                                                    
|                                                    
|                                                    
|                                                     | Purchases of property, plant and equipment, net               |                |         | (135         | ) |               |         | (3,034       | ) |              |        | (201   | ) |   |     | -0- |  |   |         | (3,370 | )
|                                                     |                                                               |                |         |              |   |               |         |              |   |              |        |        |   |   |     |     |  |   |         |       
|Net cash provided (used) in investing
    activities |                                                               |                | (135    | )            |   |               | (3,034  | )            |   |              | (3,420 | )      |   |   | -0- |     |  |   | (6,589  | )     
|                                                    
|                                                    
|                                                    
|                                                    
|Cash flows from financing activities:                |                                                               |                |         |              |   |               |         |              |   |              |        |        |   |   |     |     |  |   |         |       
|                                                    
|                                                    
|                                                    
|                                                    
|                                                     | Proceeds from bank arrangements                               |                |         | 22,600       |   |               |         | -0-          |   |              |        | -0-    |   |   |     | -0- |  |   |         | 22,600 |  
|                                                    
|                                                    
|                                                    
|                                                    
|                                                     | Principal payments on revolving credit and
    long-term debt |                |         | -0-          |   |               |         | (128         | ) |              |        | (102   | ) |   |     | -0- |  |   |         | (230   | )
|                                                     |                                                               |                |         |              |   |               |         |              |   |              |        |        |   |   |     |     |  |   |         |       
|Net cash provided (used) by financing
    activities |                                                               |                | 22,600  |              |   |               | (128    | )            |   |              | (102   | )      |   |   | -0- |     |  |   | 22,370  |       
|                                                     |                                                               |                |         |              |   |               |         |              |   |              |        |        |   |   |     |     |  |   |         |       
|Increase (decrease) in cash and cash equivalents     |                                                               |                | 10,703  |              |   |               | (11,213 | )            |   |              | (3,886 | )      |   |   | -0- |     |  |   | (4,396  | )     
|                                                    
|                                                    
|                                                    
|                                                    
|Cash and cash equivalents at beginning of period     |                                                               |                | 5,343   |              |   |               | 626     |              |   |              | 11,899 |        |   |   |    |     |  |   | 17,868  |       
|                                                     |                                                               |                |         |              |   |               |         |              |   |              |        |        |   |   |     |     |  |   |         |       
|Cash and cash equivalents at end of period           |                                                               | $              | 16,046  |              |   | $             | (10,587 | )            |   | $            | 8,013  |        |   | $ | -0- |     |  | $ | 13,472  |       
|                                                     |                                                               |                |         |              |   |               |         |              |   |              |        |        |   |   |     |     |  |   |         |       

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   |       
|                                                     |                                                 |                |         |              |   |               |        |              |   |              |        |      |   |   |     |     |  |   |         |       

16



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##### Table of Contents






REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

Board of Directors and Shareholder



We have reviewed the accompanying consolidated balance sheet of
Park-Ohio Industries, Inc. and subsidiaries as of March 31,
2006 and the related consolidated statements of income and cash
flows for the three-month periods ended March 31, 2006 and
2005 and the consolidated statement of shareholders equity
for the three-month period ended March 31, 2006. 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, 2005 and the related
consolidated statements of income, shareholders equity,
and cash flows for the year then ended, and in our report dated
March 13, 2006, 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, 2005, 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



17



---



##### 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.
The historical financial information is not directly comparable
on a year-to-year basis, primarily due to the reversal of a tax
valuation allowance in 2005, debt extinguishment costs and
writeoff of deferred financing costs associated with the tender
and early redemption during 2004 of our 9.25% senior
subordinated notes, restructuring and unusual charges in 2005,
and acquisitions and divestitures during 2004, 2005 and 2006.

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, automotive and
vehicle parts, electrical distribution and controls, power
sports/fitness equipment, HVAC, aerospace and defense,
electrical components, appliance and semiconductor equipment
industries.

Aluminum Products casts and machines aluminum engine,
transmission, brake, suspension and other components such as
pump housings, clutch retainers/pistons, control arms, knuckles,
master cylinders, pinion housings, brake calipers, oil pans and
flywheel spacers for automotive, agricultural equipment,
construction equipment, heavy-duty truck and marine equipment
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, injection molded rubber components, 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, sub-assemblers and end users in the steel, coatings,
forging, foundry, heavy-duty truck, construction equipment,
bottling, automotive, oil and gas, rail and locomotive
manufacturing and aerospace and defense industries. Sales,
earnings and other relevant financial data for these three
segments are provided in Note I to the consolidated
financial statements.

Sales and pretax profitability continued to grow in the first
three months of 2006. Net sales increased 14% to
$260.2 million, and pretax income grew 14% to
$8.1 million. We recorded income tax expense of
$3.1 million in the first three months of 2006, resulting
in an effective income tax rate of 38%, compared to
$.8 million, or an effective income tax rate of 11% in the
first three months of 2005. No federal income taxes were
expensed in first quarter 2005 due to our deferred tax valuation
allowance, of which a portion was reversed at the end of 2005.
This resulted in net income of $5.0 million for the first
three months of 2006, compared to $6.3 million in the same
period of 2005.

Sales and profitability grew substantially in 2004 and 2005 as a
result of new business development, growth in domestic and
international manufacturing economies, and acquisitions. Net
sales increased 30% and 15% in 2004 and 2005, respectively. We
reported net income of $14.5 million in 2004, which grew
118% in 2005 to $31.6 million. 2005 net income was
affected by a $7.3 million reversal of our domestic
deferred tax asset valuation allowance and $1.8 million of
restructuring charges ($.8 million reflected in Cost of
products sold and $1.0 million in Restructuring and
impairment charges).

During 2004, we reinforced our long-term availability and
attractive pricing of funds by refinancing both of our major
sources of borrowed funds: senior subordinated notes and our
revolving credit facility. 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 our 9.25% senior
subordinated notes due

18



---



##### Table of Contents





We recently made two acquisitions to build on the success of our
induction heating and melting systems business. In December
2005, we acquired the assets of Lectrotherm, in Canton, Ohio,
for $5.1 million in cash, and in January 2006, we acquired
the stock of Foundry Service, in Germany, for $3.2 million
in cash. These acquisitions augment our existing, high-margin
aftermarket induction business, and increased our presence,
revenues and profits in Germany, an important capital equipment
market. We funded these acquisitions with borrowings from our
revolving credit facility and funds from foreign subsidiaries.

We acquired substantially all the assets of PPG, a provider of
supply chain management services for a broad range of production
components, in July 2005, for $7.0 million in cash funded
with borrowings from our revolving credit facility,
$.5 million in the form of a short-term note payable and
the assumption of approximately $13.3 million of trade
liabilities. This acquisition added significantly to the
customer and supplier bases, and expanded our geographic
presence of, our ILS segment. ILS has already eliminated
substantial overhead cost and begun the process of consolidating
redundant service centers.

Results of Operations



| |                                           
| | ------------------------------------------
| | Three Months 2006 versus Three Months 2005



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

|                       |  |                 |       |      |  |         |       |            |  |       |      |   |  |  |    |   |  |   |      | 
|---------------------- |  | --------------- | ----- | ---- |  | ------- | ----- | ---------- |  | ----- | ---- | - |  |  | -- | - |  | - | ---- | 
|                       |  |                 |       |      |  |         |       |           
|                       |  | Three Months    |       |      |  |         |       |           
|                       |  | Ended March 31, |       |      |  |         |       | Acquired/ 
|                       |  |                 |       |      |  | Percent |       | (Divested)
|                       |  | 2006            |       | 2005 |  | Change  |       | Change     |  | Sales
|                       |  |                 |       |      |  |         |       |            |  |      
|ILS                    |  | $               | 150.1 |      |  | $       | 126.9 |            |  | $     | 23.2 |   |  |  | 18 | % |  | $ | 14.0 | 
|                      
|                      
|                      
|                      
|Aluminum products      |  |                 | 42.7  |      |  |         | 42.9  |            |  |       | (0.2 | ) |  |  | 0  | % |  |   | 0.0  | 
|                      
|                      
|                      
|                      
|Manufactured products  |  |                 | 67.4  |      |  |         | 59.1  |            |  |       | 8.3  |   |  |  | 14 | % |  |   | 5.5  | 
|                       |  |                 |       |      |  |         |       |            |  |       |      |   |  |  |    |   |  |   |      | 
|Consolidated net sales |  | $               | 260.2 |      |  | $       | 228.9 |            |  | $     | 31.3 |   |  |  | 14 | % |  | $ | 19.5 | 
|                       |  |                 |       |      |  |         |       |            |  |       |      |   |  |  |    |   |  |   |      | 

Net sales increased by 14% for the first three months of 2006
compared to the same period of 2005. ILS sales increased
primarily due to the July 20, 2005 acquisition of PPG,
general economic growth, particularly as a result of significant
growth in the heavy-duty truck industry, the addition of new
customers and increases in product range to existing customers.
Aluminum Products sales decreased slightly in the first three
months of 2006 primarily due to volume decreases in the
automotive industry. Manufactured Products sales increased in
the first three months of 2006 primarily in the induction
equipment, pipe threading equipment and forging businesses. Of
this increase in Manufactured Products sales, $5.5 million
was due to the acquisitions of Lectrotherm and Foundry Service,
in December 2005 and January 2006, respectively.



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

|                                   |  |                 |       |      |  |         |       |        |  |   |      |  |  |  |    |  
|---------------------------------- |  | --------------- | ----- | ---- |  | ------- | ----- | ------ |  | - | ---- |  |  |  | -- | -
|                                   |  |                 |       |      |  |        
|                                   |  | Three Months    |       |      |  |        
|                                   |  | Ended March 31, |       |      |  |        
|                                   |  |                 |       |      |  | Percent
|                                   |  | 2006            |       | 2005 |  | Change  |       | Change
|                                   |  |                 |       |      |  |         |       |       
|Consolidated cost of products sold |  | $               | 223.3 |      |  | $       | 193.8 |        |  | $ | 29.5 |  |  |  | 15 | %
|                                   |  |                 |       |      |  |         |       |        |  |   |      |  |  |  |    |  
|Consolidated gross profit          |  | $               | 36.9  |      |  | $       | 35.1  |        |  | $ | 1.8  |  |  |  | 5  | %
|                                   |  |                 |       |      |  |         |       |        |  |   |      |  |  |  |    |  
|Gross margin                       |  |                 | 14.2  | %    |  |         | 15.3  | %      |  |   |      |  |  |  |    |  

Cost of products sold increased 15% in the first three months of
2006 compared to the same period of 2005, while gross margin
decreased to 14.2% in the first three months of 2006 from 15.3%
in the comparable period of 2005. ILS gross margin increased
primarily due to increased volumes and greater recovery of steel
price increases. Aluminum Products gross margin decreased
primarily due to the increased cost of natural gas and costs
related to contracts starting in upcoming quarters. Gross margin
in the Manufactured Products

19



---



##### Table of Contents







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

|                           |  |                 |      |      |  |         |      |        |  |   |     |   |  |  |    | 
|-------------------------- |  | --------------- | ---- | ---- |  | ------- | ---- | ------ |  | - | --- | - |  |  | -- | 
|                           |  |                 |      |      |  |        
|                           |  | Three Months    |      |      |  |        
|                           |  | Ended March 31, |      |      |  |        
|                           |  |                 |      |      |  | Percent
|                           |  | 2006            |      | 2005 |  | Change  |      | Change
|                           |  |                 |      |      |  |         |      |       
|                          
|                          
|                          
|                          
|Consolidated SG&A expenses |  | $               | 21.5 |      |  | $       | 21.6 |        |  | $ | (.1 | ) |  |  | 0% | 
|                          
|                          
|                          
|                          
|SG&A percent               |  |                 | 8.3  | %    |  |         | 9.4  | %      |  |   |     |   |  |  |    | 

Consolidated SG&A expenses were essentially flat in the
first three months of 2006 compared to the same period of 2005,
despite the addition of approximately $1.3 million in
SG&A expenses through the acquisitions of PPG, Lectrotherm
and Foundry Service. SG&A expenses were negatively affected
in the first three months of 2006 compared to the same period of
2005 by a $.2 million decrease in net pension credits
reflecting less favorable returns on pension plan assets.
SG&A expenses remained flat despite increased sales and
production volumes primarily due to cost reductions through
restructuring at acquired units, particularly Amcast and PPG.
SG&A expenses as a percent of sales decreased by
1.1 percentage points.



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

|                               |  |                 |       |      |  |         |       |        |  |   |     |               |  |  |    |  
|------------------------------ |  | --------------- | ----- | ---- |  | ------- | ----- | ------ |  | - | --- | ------------- |  |  | -- | -
|                               |  |                 |       |      |  |        
|                               |  | Three Months    |       |      |  |        
|                               |  | Ended March 31, |       |      |  |        
|                               |  |                 |       |      |  | Percent
|                               |  | 2006            |       | 2005 |  | Change  |       | Change
|                               |  |                 |       |      |  |         |       |       
|Interest expense               |  | $               | 7.4   |      |  | $       | 6.5   |        |  | $ | 0.9 |               |  |  | 14 | %
|                              
|                              
|                              
|                              
|Average outstanding borrowings |  | $               | 358.1 |      |  | $       | 352.3 |        |  | $ | 5.8 |               |  |  | 2  | %
|                              
|                              
|                              
|                              
|Average borrowing rate         |  |                 | 8.23  | %    |  |         | 7.33  | %      |  |   | (90 | )basis points |  |  |    |  

Interest expense increased in the first three months of 2006
compared to the same period of 2005, primarily due to higher
average interest rates and average outstanding borrowings during
the first three months of 2006. The increase in average
borrowings in the first three months of 2006 resulted primarily
from higher working capital requirements and the purchases of
PPG, Lectrotherm and Foundry Service in July and December 2005
and January 2006, respectively. The higher average borrowing
rate in the first quarter of 2006 was due primarily to increased
interest rates under our revolving credit facility compared to
the first quarter of 2005, which rates increased primarily as a
result of actions by the Federal Reserve.



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

The provision for income taxes was $3.1 million in the
three-month period ended March 31, 2006, resulting in a 38%
effective income tax rate, compared to income taxes of
$.8 million provided in the corresponding period of 2005,
for an effective 11% income tax rate. In the first quarter of
2005, these taxes consisted primarily of state and foreign taxes
on profitable operations. Taxes in the first three months of
2006 included such state and foreign taxes, but also included
federal income taxes. This change resulted from the
fourth-quarter 2005 reversal of a portion of our domestic
deferred tax valuation allowance.

In the fourth quarter of 2005, the Company reversed
$7.3 million of its $12.3 million year-end 2005
domestic deferred tax valuation allowance. Based on strong
recent and projected earnings, the Company determined that it
was more likely than not that this portion of the deferred tax
asset would be realized. In 2006, the Company began recording a
quarterly provision for federal income taxes. Our significant
net operating loss carry-forward should preclude the payment of
cash federal income taxes in 2006 and 2007, and possibly beyond.
In the fourth quarter of 2006, the Company will reassess the
remaining tax valuation allowance. If it is determined that a
portion or all of the remaining deferred tax asset will more
likely than not be realized, then the appropriate portion of its
remaining tax valuation allowance will be reversed into income
at that time, which could increase 2006 net income by as
much as $5.0 million.

20



---



##### Table of Contents



At December 31, 2005, our subsidiaries had
$41.0 million of net operating loss carryforwards for
federal tax purposes.

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
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,
except as required by law. In light of these and other
uncertainties, the inclusion of a forward-looking statement
herein should not be regarded as a representation by us that our
plans and objectives will be achieved.

Review By Registered Public Accounting Firm

The consolidated financial statements at March 31, 2006,
and for the three-month periods ended March 31, 2006 and
2005, 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 $150.9 million at March 31, 2006. A
100 basis point increase in the interest rate would have
resulted in an increase in interest expense of approximately
$.4 million during the three-month period ended
March 31, 2006.

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Our foreign subsidiaries generally conduct business in local
currencies. During the first quarter of 2006, we recorded a
favorable foreign currency translation adjustment of
$.5 million related to net assets located outside the
United States. This foreign currency translation adjustment
resulted primarily from the weakening of the U.S. dollar in
relation to the euro and 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.

The Company enters into forward contracts on foreign currencies,
primarily the euro and the British Pound Sterling, purely for
the purpose of hedging exposure to changes in the value of
accounts receivable in those currencies against the U.S. dollar.
The Company currently uses no other derivative instruments. At
March 31, 2006, $1.0 million of such currency hedge
contracts were outstanding.




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 quarterly 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
2006 that have materially affected, or are reasonably likely to
materially affect, our internal control over financial reporting.

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PART II

OTHER INFORMATION




Item 1. Legal Proceedings

We are subject to various pending and threatened lawsuits in
which claims for monetary damages are asserted in the ordinary
course of business. While any litigation involves an element of
uncertainty, in the opinion of management, liabilities, if any,
arising from currently pending or threatened litigation is not
expected to have a material adverse effect on our financial
condition, liquidity or results of operations.

At March 31, 2006, we were a co-defendant in approximately
380 cases asserting claims on behalf of approximately 10,000
plaintiffs alleging personal injury as a result of exposure to
asbestos. These asbestos cases generally relate to production
and sale of asbestos-containing products and allege various
theories of liability, including negligence, gross negligence
and strict liability and seek compensatory and, in some cases,
punitive damages.

In every asbestos case in which we are named as a party, the
complaints are filed against multiple named defendants. In
substantially all of the asbestos cases, the plaintiffs either
claim damages in excess of a specified amount, typically a
minimum amount sufficient to establish jurisdiction of the court
in which the case was filed (jurisdictional minimums generally
range from $25,000 to $75,000), or do not specify the monetary
damages sought. To the extent that any specific amount of
damages is sought, the amount applies to claims against all
named defendants.

There are only four asbestos cases, involving 21 plaintiffs,
that plead specified damages. In each of the four cases, the
plaintiff is seeking compensatory and punitive damages based on
a variety of potentially alternative causes of action. In three
cases, the plaintiff has alleged compensatory damages in the
amount of $3.0 million for four separate causes of action
and $1.0 million for another cause of action and punitive
damages in the amount of $10.0 million. In the other case,
the plaintiff has alleged compensatory damages in the amount of
$20.0 million for three separate causes of action and
$5.0 million for another cause of action and punitive
damages in the amount of $20.0 million.

Historically, we have been dismissed from asbestos cases on the
basis that the plaintiff incorrectly sued one of our
subsidiaries or because the plaintiff failed to identify any
asbestos-containing product manufactured or sold by us or our
subsidiaries. We intend to vigorously defend these asbestos
cases, and believe we will continue to be successful in being
dismissed from such cases. However, it is not possible to
predict the ultimate outcome of asbestos-related lawsuits,
claims and proceedings due to the unpredictable nature of
personal injury litigation. Despite this uncertainty, and
although our results of operations and cash flows for a
particular period could be adversely affected by
asbestos-related lawsuits, claims and proceedings, management
believes that the ultimate resolution of these matters will not
have a material adverse effect on our financial condition,
liquidity or results of operations. Among the factors management
considered in reaching this conclusion were: (a) our
historical success in being dismissed from these types of
lawsuits on the bases mentioned above; (b) many cases have
been improperly filed against one of our subsidiaries;
(c) in many cases , the plaintiffs have been unable to
establish any causal relationship to us or our products or
premises; (d) in many cases, the plaintiffs have been
unable to demonstrate that they have suffered any identifiable
injury or compensable loss at all, that any injuries that they
have incurred did in fact result from alleged exposure to
asbestos; and (e) the complaints assert claims against
multiple defendants and, in most cases, the damages alleged are
not attributed to individual defendants. Additionally, we do not
believe that the amounts claimed in any of the asbestos cases
are meaningful indicators of our potential exposure because the
amounts claimed typically bear no relation to the extent of the
plaintiffs injury, if any.

Our cost of defending these lawsuits has not been material to
date and, based upon available information, our management does
not expect its future costs for asbestos-related lawsuits to
have a material adverse effect on our results of operations,
liquidity or financial position.

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Item 1A. Risk Factors

There have been no material changes in the risk factors
previously disclosed in the Companys Annual Report on
Form 10-K for the fiscal year ended December 31, 2005.




Item 5. Other Information

On May 5, 2006, Park-Ohio Industries, Inc., the other loan
parties thereto, the lenders party thereto and JPMorgan Chase
Bank, N.A. (successor by merger to Bank One, NA), as agent,
entered into a Third Amendment to the Amended and Restated
Credit Agreement dated November 5, 2003 (the
Amendment). The Amendment, among other things,
reduces by 50 basis points the pricing applicable to the LIBOR
based interest rate effective as of April 1, 2006. The
foregoing summary of the Amendment is qualified in its entirety
by reference to the Amendment, which is filed as Exhibit 4
hereto and incorporated herein by reference. One of the
Companys directors is an officer of one of the parties to
the revolving credit facility.




Item 6. Exhibits

The following exhibits are included herein:

|     |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|---- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|4    |  | Third Amendment, dated May 5, 2006, to the
    Amended and Restated Credit Agreement, dated November 5,
    2003, among Park-Ohio Industries, Inc., the other loan parties
    thereto, the lenders party thereto and JPMorgan Chase Bank, N.A.
    (successor by merger to Bank One, NA), as agent (filed as
    Exhibit 4 to the Form 10-Q of Park-Ohio Holdings Corp.
    for the quarter ended March 31, 2006, SEC
    File No. 000-03134 and incorporated by reference and
    made a part hereof)
|31.1 |  | Principal Executive Officers Certification
    Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002                                                                                                                                                                                                                                                                                                                                                                                              
|31.2 |  | Principal Financial Officers Certification
    Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002                                                                                                                                                                                                                                                                                                                                                                                              
|32   |  | Certification requirement under Section 906
    of the Sarbanes-Oxley Act of 2002                                                                                                                                                                                                                                                                                                                                                                                                                      

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SIGNATURE

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.

Date: May 12, 2006



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



| |    |                       
| | -- | ----------------------
| | By | /s/ RICHARD P. ELLIOTT

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

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EXHIBIT INDEX

QUARTERLY REPORT ON FORM 10-Q

PARK-OHIO INDUSTRIES, INC. AND SUBSIDIARIES

FOR THE QUARTER ENDED MARCH 31, 2006


|        |      |  |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|------- | ---- |  |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |      | 
|        |      | 
|        | 4    |  |  | Third Amendment, dated May 5, 2006, to the
    Amended and Restated Credit Agreement, dated November 5,
    2003, among Park-Ohio Industries, Inc., the other loan parties
    thereto, the lenders party thereto and JP Morgan Chase Bank,
    N.A. (successor by merger to Bank One, NA), as agent (filed as
    Exhibit 4 to the Form 10-Q of Park-Ohio Holdings Corp.
    for the quarter ended March 31, 2006, SEC
    File No. 000-03134 and incorporated by reference and
    made a part hereof)
|        | 31.1 |  |  | Principal Executive Officers Certification
    Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002                                                                                                                                                                                                                                                                                                                                                                                               
|        | 31.2 |  |  | Principal Financial Officers Certification
    Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002                                                                                                                                                                                                                                                                                                                                                                                               
|        | 32   |  |  | Certification requirement under Section 906
    of the Sarbanes-Oxley Act of 2002                                                                                                                                                                                                                                                                                                                                                                                                                       

26