##### 



SECURITIES AND EXCHANGE COMMISSION


WASHINGTON, D.C. 20549

FORM 10-K

(Mark One)

x

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE


SECURITIES EXCHANGE ACT OF 1934


For the fiscal year ended December 31, 2004

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

Registrants telephone number, including area code:
(216) 692-7200

Securities registered pursuant to Section 12(b) of the
Act:

None

Securities registered pursuant to Section 12(g) of the
Act:

None

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
Instructions I 1(a) and (b) of Form 10-K and is
therefore filing this form with reduced disclosure format.

Indicate by check mark whether the registrant (1) has filed
reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding
12 months (or for such shorter period that the registrant
was required to file such reports), and (2) has been
subject to such filing requirements for the past
90 days.     Yes x     No
o

Indicate
by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K is not contained herein,
and will not be contained, to the best of registrants
knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this
Form 10-K or any amendment to this
Form 10-K.     x

Indicate
by check mark whether the registrant is an accelerated filer (as
defined in Exchange Act
Rule 12b-2).     Yes
o     No
x

All of the outstanding stock of the registrant is held by
Park-Ohio Holdings Corp. As of March 15, 2005,
100 shares of the registrants common stock, $1 par
value, were outstanding.

DOCUMENTS INCORPORATED BY REFERENCE:

None



---



##### 



Part I






|        |         
|------- | --------
|Item 1. | Business

Overview

Park-Ohio Industries, Inc. (Park-Ohio), a
wholly-owned subsidiary of Park-Ohio Holdings Corp.
(Holdings), was incorporated as an Ohio corporation
in 1984. Park-Ohio, primarily through its subsidiaries, is an
industrial supply chain logistics and diversified manufacturing
business operating in three segments: Integrated Logistics
Solutions (ILS), Aluminum Products and Manufactured
Products.

References herein to we or the Company
include, where applicable, Holdings, Park-Ohio and its other
direct and indirect subsidiaries.

ILS provides our customers with integrated supply chain
management services for a broad range of high-volume, specialty
production components and has a leading market position in North
America. Our Aluminum Products business manufactures cast and
machined aluminum components, and our Manufactured Products
business is a major manufacturer of highly-engineered industrial
products. Our businesses serve large, industrial original
equipment manufacturers (OEMs) in a variety of
industrial sectors, including the automotive, heavy-duty truck,
industrial equipment, steel, rail, electrical controls,
aerospace and defense, lawn and garden and semiconductor
industries. As of December 31, 2004, we employed approximately
3,200 persons.

The following table summarizes the key attributes of each of our
business segments:

|                           |  |                                                                                                                                                                                                                                  |  |                                                                                                                                            |  |                                                                                                                                                                          
|-------------------------- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ------------------------------------------------------------------------------------------------------------------------------------------ |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|                           |  | Integrated Logistics                                                                                                                                                                                                             |  |                                                                                                                                            |  |                                                                                                                                                                          
|                           |  | Solutions                                                                                                                                                                                                                        |  | Aluminum Products                                                                                                                          |  | Manufactured Products                                                                                                                                                    
|                           |  |                                                                                                                                                                                                                                  |  |                                                                                                                                            |  |                                                                                                                                                                          
|NET SALES(1)               |  | $453.2 million
    (56% of total)                                                                                                                                                                                                |  | $135.4 million
    (17% of total)                                                                                                          |  | $220.1 million
    (27% of total)                                                                                                                                        
|SELECTED PRODUCTS          |  | Sourcing, planning and procurement of over
    175,000 production components, including:
     Fasteners
     Pins
     Valves
     Hoses
     Wire harnesses
     Clamps and fittings
     Rubber and plastic  components |  |  Pump housings
     Pinion carriers
     Clutch retainers
     Control arms
     Knuckles
     Brake calipers
     Master cylinders |  |  Induction heating
    and  melting systems
     Pipe threading  systems
     Industrial oven  systems
     Injection molded  rubber components
     Forging presses
|SELECTED INDUSTRIES SERVED |  |  Heavy-duty truck
     Electrical controls
     Automotive
     Other vehicle
     Industrial equipment
     Power sports  equipment
     Lawn and garden
     Semiconductor                                             |  |  Automotive
     Agricultural equipment
     Construction  equipment
     Heavy-duty truck                                             |  |  Steel
     Automotive
     Oil and gas
     Rail
     Aerospace and  defense                                                                                       



---



|    |                                                                                                                                                                                                             
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Results are for the year ended December 31, 2004 and
    exclude the results of operations related to the assets of the
    Amcast Components Group prior to the date of acquisition on
    August 23, 2004.

We have established leading market positions across a variety of
industries, and we believe we maintain a #1 or #2
market position in products and services that represent more
than 75% of our net sales. We benefit from long-term, entrenched
relationships with high-quality customers that include leading
OEMs, and we derive approximately 70% of our net sales from
sole-source arrangements.

Integrated Logistics Solutions

Our ILS business provides our customers with integrated supply
chain management services for a broad range of high-volume,
specialty production components. Our 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,

1



---



##### 





Products and Services. Supply chain management services,
which is ILSs primary focus for future growth, involves
offering customers comprehensive, on-site management for most of
their production component needs. Some production components are
characterized by low per unit supplier prices relative to the
indirect costs of supplier management, quality assurance,
inventory management and delivery to the production line. In
addition, ILS delivers an increasingly broad range of
higher-cost production components including valves, fittings,
steering components and many others. Applications-engineering
specialists and the direct sales force work closely with the
engineering staff of OEM customers to recommend the appropriate
production components for a new product or to suggest
alternative components that reduce overall production costs,
streamline assembly or enhance the appearance or performance of
the end product. As an additional service, ILS recently began
providing spare parts and aftermarket products to end users of
its customers products.

Supply chain management services are typically provided to
customers pursuant to sole-source arrangements. We believe our
services distinguish us from traditional buy/sell distributors,
as well as manufacturers who supply products directly to
customers, because we outsource our customers high-volume
production components supply chain management, providing
processes customized to each customers needs and replacing
numerous current suppliers with a sole-source relationship. Our
highly-developed, customized, information systems provide
transparency and flexibility through the complete supply chain.
This enables our customers to: (1) significantly reduce the
direct and indirect cost of production component processes by
outsourcing internal purchasing, quality assurance and inventory
fulfillment responsibilities; (2) reduce the amount of
working capital invested in inventory and floor space;
(3) reduce component costs through purchasing efficiencies,
including bulk buying and supplier consolidation; and
(4) receive technical expertise in production component
selection and design and engineering. Our sole-source
arrangements foster long-term, entrenched supply relationships
with our customers and, as a result, the average tenure of
service for our top 50 ILS clients exceeds twelve years.
ILSs remaining non-manufacturing sales are generated
through the wholesale supply of industrial products to other
manufacturers and distributors pursuant to master or authorized
distributor relationships.

ILS also engineers and manufactures precision cold formed and
cold extruded products, including locknuts, SPAC® nuts and
wheel hardware, that are principally used in applications where
controlled tightening is required due to high vibration. ILS
produces both standard items and specialty products to customer
specifications that are used in large volumes by customers in
the automotive, heavy-duty truck and rail industries.

Markets and Customers. For the year ended
December 31, 2004, approximately 79% of ILSs net
sales were to domestic customers. Remaining sales were primarily
to manufacturing facilities of large, multinational customers
located in Canada, Mexico and Europe. Supply chain management
services and production components are used extensively in a
variety of industries, and demand is generally related to the
state of the economy and to the overall level of manufacturing
activity.

ILS markets and sells its services to over 6,500 customers
domestically and internationally. The principal markets served
by ILS are heavy-duty truck, electrical controls, automotive,
other vehicle, industrial equipment, power sports equipment,
lawn and garden and semiconductor industries. The five largest
customers, within which ILS sells through sole-source contracts
to multiple operating divisions or locations, accounted for
approximately 32% and 38% of sales of ILS for 2003 and 2004,
respectively, with International Truck representing 15% and 19%,
respectively, of segment sales. Two of the five largest
customers are in the heavy-duty truck industry. The loss of the
International Truck account or any two of the remaining top five
customers could have a material adverse effect on this segment.

Competition. There are a limited number of companies who
compete with ILS for supply chain service contracts. ILS
competes mainly with domestic competitors primarily on the basis
of its value-added services, which includes sourcing,
engineering and delivery capabilities, geographic reach,
extensive product selection, price and reputation for high
service levels.

2



---



##### 



Aluminum Products

We believe that we are one of the few part suppliers that has
the capability to provide a wide range of high-volume,
high-quality products utilizing a broad range of processes,
including permanent mold, low-pressure, die-cast, sand-cast and
lost-foam, as well as a proprietary sub-liquidous process. Our
ability to offer our customers this comprehensive range of
capabilities at a low cost provides us with a competitive
advantage. We produce our aluminum components at six
manufacturing facilities in Ohio, Indiana and Wisconsin.

Products and Services. Our Aluminum Products business
casts and machines aluminum engine, transmission, brake,
suspension and other components for automotive, agricultural
equipment, heavy-duty truck and construction equipment OEMs,
primarily on a sole-source basis. Aluminum Products
principal products include transmission pump housings, intake
manifolds, planetary pinion carriers, oil filter adapters,
clutch retainers, bearing cups, brackets, oil pans and flywheel
spacers. In addition, we also provide value-added services such
as design engineering, machining and part assembly. Although
these parts are lightweight, they possess high durability and
integrity characteristics even under extreme pressure and
temperature conditions.

Demand by automotive OEMs for aluminum castings has increased in
recent years as they have sought lighter alternatives to steel
and iron, primarily to increase fuel efficiency without
compromising structural integrity. We believe that this
replacement trend will continue as end-users and the regulatory
environment require greater fuel efficiency. To capitalize on
this trend, in August 2004, we acquired substantially all of the
assets of the Amcast Components Group, a producer of aluminum
automotive components. This acquisition significantly increased
our production capacity and added attractive new customers,
product lines and production technologies. We believe that the
acquisition of the Amcast Components Group will significantly
increase the net sales of our Aluminum Products business. The
historical financial data contained throughout this annual
report on Form 10-K exclude the results of operations of
the Amcast Components Group other than for the period from
August 23, 2004 through December 31, 2004.

Markets and Customers. The five largest customers, of
which Aluminum Products sells to multiple operating divisions
through sole-source contracts, accounted for approximately 79%
of Aluminum Products sales for both 2003 and 2004, respectively.
The loss of any one of these customers could have a material
adverse effect on this segment.

Competition. The domestic aluminum castings industry is
highly competitive. Aluminum Products competes principally on
the basis of its ability to: (1) engineer and manufacture
high-quality, cost-effective, machined castings utilizing
multiple casting technologies in large volumes; (2) provide
timely delivery; and (3) retain the manufacturing
flexibility necessary to quickly adjust to the needs of its
customers. Although there are a number of smaller domestic
companies with aluminum casting capabilities, the
customers stringent quality and service standards enable
only large suppliers with the requisite quality certifications
to compete effectively. As one of these suppliers, Aluminum
Products is well-positioned to benefit as customers continue to
consolidate their supplier base.

Manufactured Products

Our Manufactured Products segment 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, rubber
products and forged and machined products. We manufacture these
products in eleven domestic facilities and eight international
facilities in Canada, Mexico, the United Kingdom, Belgium,
Germany, China and Japan.

Products and Services. Our induction heating and melting
business utilizes proprietary technology and specializes in the
engineering, construction, service and repair of induction
heating and melting systems, primarily for the steel, coatings,
forging, foundry, automotive and construction equipment
industries. Our induction heating and melting systems are
engineered and built to customer specifications and are used
primarily for melting, heating, and surface hardening of metals
and curing of coatings. Approximately 35%-40% of our induction
heating and melting systems revenues is derived from the
sale of replacement parts and provision of field service,
primarily for the installed base of our own products. We also
produce and provide services and spare parts for other capital
equipment such as pipe threading equipment for the oil and gas
industry, oven systems and mechanical forging presses,

3



---



##### 





We manufacture injection molded rubber and silicone products for
use in automotive and industrial applications. The rubber
products facilities manufacture products for customers in the
automotive, food processing and consumer appliance industries.
Their products include wire harnesses, shock and vibration
mounts, spark plug boots and nipples and general sealing
gaskets. During 2002, we reduced rubber products costs and
discontinued underperforming products by selling one business
unit and closing a manufacturing plant.

Markets and Customers. In our Manufactured Products
capital equipment business, approximately 38% of net sales for
the year ended December 31, 2004 was derived from
replacement parts and the provision of field service. In
addition, we manufacture forged and machined products produced
from closed-die metal forgings of up to 6,000 pounds. Aerospace
forgings are sold primarily to machining companies and
sub-assemblers who finish the products for sale to OEMs. We also
machine, induction harden and surface finish crankshafts and
camshafts used primarily in locomotives. In the fourth quarter
of 2003, we decided to shut down our locomotive crankshaft
forging plant and entered into a long-term supply contract to
purchase locomotive crankshaft forgings at a more favorable
price from a third-party supplier. Forged rail products are sold
primarily to railcar builders and maintenance providers. Forged
and machined products are sold to a wide variety of domestic and
international OEMs and other manufacturers, primarily in the
transportation industries.

Competition. Our capital equipment units compete with
small to medium-sized domestic and international equipment
manufacturers on the basis of service capability, ability to
meet customer specifications, delivery performance and
engineering expertise. Our rubber products operating units
compete primarily on the basis of price and product quality with
other domestic small- to medium-sized manufacturers of injection
molded rubber and silicone products. Our forged and machined
products business competes domestically and internationally with
other small- to medium-sized businesses on the basis of product
quality and precision.

Sales and Marketing

ILS markets its products and services in the United States,
Mexico, Canada and Europe, primarily through its direct sales
force, which is assisted by applications engineers who provide
the technical expertise necessary to assist the engineering
staff of OEM customers in designing new products and improving
existing products. Aluminum Products primarily markets and sells
its products in North America through internal sales personnel.
Manufactured Products primarily markets and sells its products
in North America through both internal sales personnel and
independent sales representatives. Induction heating and pipe
threading equipment is also marketed and sold in Europe, Asia,
Latin America and northern Africa through both internal sales
personnel and independent sales representatives. In some
instances, the internal engineering staff assists in the sales
and marketing effort through joint design and
applications-engineering efforts with major customers.

Raw Materials and Suppliers

ILS purchases substantially all of its production components
from third-party suppliers. Aluminum Products and Manufactured
Products purchase substantially all of their raw materials,
principally metals and certain component parts incorporated into
their products, from third-party suppliers and manufacturers.
Management believes that raw materials and component parts other
than certain specialty products are available from alternative
sources. ILS has multiple sources of supply for its products. An
increasing portion of ILSs delivered components are
purchased from suppliers in foreign countries, primarily Taiwan,
China, South Korea, India and Eastern Europe. We are dependent
upon the ability of such suppliers to meet stringent quality and
performance standards and to conform to delivery schedules. Most
raw materials required by Aluminum Products and Manufactured
Products are commodity products available from several domestic
suppliers.

4



---



##### 



Customer Dependence

We have thousands of customers who demand quality, delivery and
service. Numerous customers have recognized our performance by
awarding us with supplier quality awards. No customer accounted
for more than 10% of consolidated sales in any of the past three
years, except for International Truck in 2004 and 2003.

Backlog

Management believes that backlog is not a meaningful measure for
ILS, as a majority of ILSs customers require just-in-time
delivery of production components. Management believes that
Aluminum Products and Manufactured Products backlog
as of any particular date is not a meaningful measure of sales
for any future period as a significant portion of sales are on a
release or firm order basis.

Environmental, Health and Safety Regulations

We are subject to numerous federal, state and local laws and
regulations designed to protect public health and the
environment, particularly with regard to discharges and
emissions, as well as handling, storage, treatment and disposal,
of various substances and wastes. Our failure to comply with
applicable environmental laws and regulations and permit
requirements could result in civil and criminal fines or
penalties or enforcement actions, including regulatory or
judicial orders enjoining or curtailing operations or requiring
corrective measures. Pursuant to certain environmental laws,
owners or operators of facilities may be liable for the costs of
response or other corrective actions for contamination
identified at or emanating from current or former locations,
without regard to whether the owner or operator knew of, or was
responsible for, the presence of any such contamination, and for
related damages to natural resources. Additionally, persons who
arrange for the disposal or treatment of hazardous substances or
materials may be liable for costs of response at sites where
they are located, whether or not the site is owned or operated
by such person.

From time to time, we have incurred and are presently incurring
costs and obligations for correcting environmental noncompliance
and remediating environmental conditions at certain of our
properties. In general, we have not experienced difficulty in
complying with environmental laws in the past, and compliance
with environmental laws has not had a material adverse effect on
our financial condition, liquidity and results of operations.
Our capital expenditures on environmental control facilities
were not material during the past five years and such
expenditures are not expected to be material to us in the
foreseeable future.

We are currently, and may in the future, be required to incur
costs relating to the investigation or remediation of property,
including property where we have disposed of our waste, and for
addressing environmental conditions. For instance, we have been
identified as a potentially responsible party at third-party
sites under the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended, or
comparable state laws, which provide for strict and, under
certain circumstances, joint and several liability. We are
participating in the cost of certain clean-up efforts at several
of these sites. The availability of third-party payments or
insurance for environmental remediation activities is subject to
risks associated with the willingness and ability of the third
party to make payments. However, our share of such costs has not
been material and, based on available information, we do not
expect our exposure at any of these locations to have a material
adverse effect on our results of operations, liquidity or
financial condition.

Information as to Industry Segment Reporting and Geographic
Areas

The information contained under the heading of
Note LIndustry Segments of the notes to
the consolidated financial statements included herein, relating
to (i) net sales, income (loss) before income taxes and
change in accounting principles, identifiable assets and other
information by industry segment and (ii) net sales and
assets by geographic region for the years ended
December 31, 2004, 2003, and 2002 is incorporated herein by
reference.

Recent Developments

The information contained under the heading of
Note DAcquisitions of the notes to the
consolidated financial statements included herein, is
incorporated by reference.

5



---



##### 








|        |           
|------- | ----------
|Item 2. | Properties

As of December 31, 2004, our operations included numerous
manufacturing and supply chain logistics services facilities
located in 23 states in the United States, and in Puerto
Rico, as well as in Asia, Canada, Europe and Mexico.
Approximately 90% of the available square footage was located in
the United States. Approximately 49% of the available square
footage was owned. In 2004, approximately 35% of the available
domestic square footage was used by the ILS segment, 38% was
used by the Manufactured Products segment and 27% by the
Aluminum Products segment. Approximately 27% of the available
foreign square footage was used by the ILS segment and 73% was
used by the Manufactured Products segment. In the opinion of
management, our facilities are generally well maintained and are
suitable and adequate for their intended uses.

The following table provides information relative to our
principal facilities as of December 31, 2004.

|                 |  |                              |  |          |              |                |  |     |         |     |  |                            
|---------------- |  | ---------------------------- |  | -------- | ------------ | -------------- |  | --- | ------- | --- |  | ---------------------------
|Related Industry |  |                              |  | Owned or |              | Approximate    |  |    
|Segment          |  | Location                     |  | Leased   |              | Square Footage |  | Use
|                 |  |                              |  |          |              |                |  |    
|ILS(1)           |  | Cleveland, OH                |  |          | Leased       |                |  |     | 41,000  | (2) |  | ILS Corporate Office       
|                 |  | Dayton, OH                   |  |          | Leased       |                |  |     | 84,700  |     |  | Logistics                  
|                 |  | Lawrence, PA                 |  |          | Leased       |                |  |     | 116,000 |     |  | Logistics and Manufacturing
|                 |  | St. Paul, MN                 |  |          | Leased       |                |  |     | 74,425  |     |  | Logistics                  
|                 |  | Atlanta, GA                  |  |          | Leased       |                |  |     | 56,000  |     |  | Logistics                  
|                 |  | Dallas, TX                   |  |          | Leased       |                |  |     | 49,985  |     |  | Logistics                  
|                 |  | Nashville, TN                |  |          | Leased       |                |  |     | 44,900  |     |  | Logistics                  
|                 |  | Charlotte, NC                |  |          | Leased       |                |  |     | 36,800  |     |  | Logistics                  
|                 |  | Kent, OH                     |  |          | Leased       |                |  |     | 225,000 |     |  | Manufacturing              
|                 |  | Mississauga, Ontario, Canada |  |          | Leased       |                |  |     | 56,000  |     |  | Manufacturing              
|                 |  | Solon, OH                    |  |          | Leased       |                |  |     | 42,600  |     |  | Logistics                  
|                 |  | Cleveland, OH                |  |          | Leased       |                |  |     | 40,000  |     |  | Manufacturing              
|                 |  | Delaware, OH                 |  |          | Owned        |                |  |     | 45,000  |     |  | Manufacturing              
|                
|ALUMINUM         |  | Conneaut, OH(3)              |  |          | Leased/Owned |                |  |     | 283,800 |     |  | Manufacturing              
|PRODUCTS         |  | Huntington, IN               |  |          | Leased       |                |  |     | 132,000 |     |  | Manufacturing              
|                 |  | Fremont, IN                  |  |          | Owned        |                |  |     | 108,000 |     |  | Manufacturing              
|                 |  | Wapakoneta, OH               |  |          | Owned        |                |  |     | 185,000 |     |  | Manufacturing              
|                 |  | Richmond, IN                 |  |          | Leased/Owned |                |  |     | 140,000 |     |  | Manufacturing              
|                 |  | Cedarburg, WI                |  |          | Leased       |                |  |     | 130,000 |     |  | Manufacturing              
|                
|MANUFACTURED     |  | Cuyahoga Hts., OH            |  |          | Owned        |                |  |     | 427,000 |     |  | Manufacturing              
|PRODUCTS(4)      |  | Le Roeulx, Belgium           |  |          | Owned        |                |  |     | 120,000 |     |  | Manufacturing              
|                 |  | Euclid, OH                   |  |          | Owned        |                |  |     | 154,000 |     |  | Manufacturing              
|                 |  | Wickliffe, OH                |  |          | Owned        |                |  |     | 110,000 |     |  | Manufacturing              
|                 |  | Boaz, AL                     |  |          | Owned        |                |  |     | 100,000 |     |  | Manufacturing              
|                 |  | Warren, OH                   |  |          | Owned        |                |  |     | 195,000 |     |  | Manufacturing              
|                 |  | Oxted, England               |  |          | Owned        |                |  |     | 135,000 |     |  | Manufacturing              
|                 |  | Cicero, IL                   |  |          | Owned        |                |  |     | 450,000 |     |  | Manufacturing              
|                 |  | Cleveland, OH                |  |          | Leased       |                |  |     | 150,000 |     |  | Manufacturing              
|                 |  | Shanghai, China              |  |          | Leased       |                |  |     | 40,000  |     |  | Manufacturing              



---



|    |                                                                                                                                        
|--- | ---------------------------------------------------------------------------------------------------------------------------------------
|(1) | ILS has 31 other facilities, none of which is deemed to be a
    principal facility.                                                   
|   
|(2) | Includes 10,000 square feet used by Park-Ohio Corporate
    Office.                                                                    
|   
|(3) | Includes three leased properties with square footage of 82,300,
    64,000 and 45,700 and one owned property of 91,800 square
    feet.
|   
|(4) | Manufactured Products has 18 other owned and leased facilities,
    none of which is deemed to be a principal facility.                




Item 3. 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,

6



---



##### 








Item 4. Submission of Matters to a Vote of Security
Holders

Information required by this item has been omitted pursuant to
General Instruction I of Form 10-K.

7



---



##### 





Part II






|        |                                                                                                                     
|------- | --------------------------------------------------------------------------------------------------------------------
|Item 5. | Market for the Registrants Common Equity, Related
    Stockholder Matters and Issuer Purchases of Equity Securities

The registrant is a wholly-owned subsidiary of Park-Ohio
Holdings Corp. and has no equity securities that trade.



|        |                        
|------- | -----------------------
|Item 6. | Selected Financial Data

Information required by this item has been omitted pursuant to
General Instruction I of Form 10-K.



|        |                                                                                          
|------- | -----------------------------------------------------------------------------------------
|Item 7. | 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 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 due 2007, restructuring and
unusual charges in 2002 and 2003, a goodwill impairment charge
in 2002 to reflect the cumulative effect of an accounting
change, and acquisitions and divestitures during the three years
ended December 31, 2004.

Executive Overview

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

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

During 2004, we reinforced 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 agreement. In November 2004, we sold
$210.0 million of 8.375% Senior Subordinated Notes due
2014. We used the net proceeds to fund the tender and early
redemption of $199.9 million of our 9.25% Senior
Subordinated Notes due 2007. We incurred debt extinguishment
costs primarily related to premiums and other transaction costs
associated with the tender and early redemption and wrote off
deferred financing costs totaling $6.0 million associated
with the repurchased senior subordinated notes.

8



---



##### 



In December 2004, we amended our revolving credit agreement,
extending its maturity to six years so that it now expires in
December 2010, increasing the credit limit so that we may borrow
up to $200.0 million subject to an asset based formula, and
providing lower interest rate levels. Borrowings under the
credit agreement are secured by substantially all our assets. We
had approximately $53.9 million of unused borrowing
availability at December 31, 2004. Funds provided by
operations plus available borrowings under the revolving credit
agreement are expected to be adequate to meet our cash
requirements.

We acquired substantially all of the assets of the Amcast
Components Group on August 23, 2004 for $10.0 million
cash and the assumption of approximately $9.0 million of
operating liabilities. We sold substantially all the assets of
St. Louis Screw and Green Bearing in first quarter 2003,
for cash totaling approximately $7.3 million, and Castle
Rubber Company in second quarter 2002, for cash of approximately
$2.5 million. We purchased substantially all the assets of
Ajax Magnethermic Corp. in third quarter 2002, for cash of
approximately $5.5 million.

Accounting Changes and Goodwill

On January 1, 2002, we adopted Statement of Financial
Accounting Standards No. 142, Goodwill and Other
Intangible Assets (FAS 142). Under
FAS 142, we reviewed goodwill and other intangible assets
and recorded a non-cash goodwill impairment charge of
$48.8 million, which was recorded as the cumulative effect
of a change in accounting principle effective January 1,
2002. Circumstances which led to this goodwill impairment
included reduced sales, profitability and growth rates of the
units with goodwill (see Note C to the consolidated
financial statements), and reduced transaction prices for
comparable businesses, which were themselves results of the
downturn in the economy. The effects of these circumstances on
our operations, financial condition and liquidity are reflected
in 2002 and 2003 results. The goodwill impairment itself did not
have any effect on operations. Under FAS 142, goodwill was
not amortized, starting in 2002.

In accordance with FAS 142, goodwill is now reviewed
annually for potential impairment. This review was performed as
of October 1, 2004, 2003 and 2002, using forecasted
discounted cash flows, and it was determined that no further
impairment is required.

At December 31, 2004, the balance sheet reflected
$82.6 million of goodwill in the ILS and Aluminum Products
segments. In 2004, discount rates used ranged from 10.25% to
12.25%, and long-term revenue growth rates used ranged from 3.5%
to 4.0%.

In 2003, we changed our method of accounting for the 15% of
inventories utilizing the LIFO method to the FIFO method. As
required by accounting principles generally accepted in the
United States, the Company restated its balance sheet as of
December 31, 2002 and increased inventories by the recorded
LIFO reserve ($4.4 million), increased deferred tax
liabilities ($1.7 million), and increased
shareholders equity ($2.7 million). Previously
reported results of operations were not restated because the
impact of utilizing the LIFO method had an insignificant impact
on the Companys reported amounts for consolidated net
income (loss). See also Note B to the consolidated
financial statements.

Results of Operations



| |                 
| | ----------------
| | 2004 versus 2003



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

|                       |  |              |       |      |  |         |       |            |  |       |       |  |  |  |    |   |  |   |      |  
|---------------------- |  | ------------ | ----- | ---- |  | ------- | ----- | ---------- |  | ----- | ----- |  |  |  | -- | - |  | - | ---- | -
|                       |  |              |       |      |  |         |       |           
|                       |  | Year Ended   |       |      |  |         |       |           
|                       |  | December 31, |       |      |  |         |       | Acquired/ 
|                       |  |              |       |      |  | Percent |       | (Divested)
|                       |  | 2004         |       | 2003 |  | Change  |       | Change     |  | Sales
|                       |  |              |       |      |  |         |       |            |  |      
|ILS                    |  | $            | 453.2 |      |  | $       | 377.6 |            |  | $     | 75.6  |  |  |  | 20 | % |  | $ | (1.0 | )
|                      
|                      
|                      
|                      
|Aluminum Products      |  |              | 135.4 |      |  |         | 90.1  |            |  |       | 45.3  |  |  |  | 50 | % |  |   | 30.4 |  
|                      
|                      
|                      
|                      
|Manufactured Products  |  |              | 220.1 |      |  |         | 156.6 |            |  |       | 63.5  |  |  |  | 41 | % |  |   | 15.9 |  
|                       |  |              |       |      |  |         |       |            |  |       |       |  |  |  |    |   |  |   |      |  
|Consolidated net sales |  | $            | 808.7 |      |  | $       | 624.3 |            |  | $     | 184.4 |  |  |  | 30 | % |  | $ | 45.3 |  
|                       |  |              |       |      |  |         |       |            |  |       |       |  |  |  |    |   |  |   |      |  

Net sales increased by 30% in 2004, compared to 2003. ILS sales
increased due to general economic growth, in particular due to
significant growth in the heavy-duty truck and semiconductor
industries, the addition of new customers, and increases in
product range to existing customers. ILS growth was partially
offset by a $1.0 million sales decrease related to the 2003
sale of Green Bearing. Aluminum

9



---



##### 







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

|                                   |  |              |       |      |  |         |       |        |  |   |       |  |  |  |    |  
|---------------------------------- |  | ------------ | ----- | ---- |  | ------- | ----- | ------ |  | - | ----- |  |  |  | -- | -
|                                   |  |              |       |      |  |        
|                                   |  | Year Ended   |       |      |  |        
|                                   |  | December 31, |       |      |  |        
|                                   |  |              |       |      |  | Percent
|                                   |  | 2004         |       | 2003 |  | Change  |       | Change
|                                   |  |              |       |      |  |         |       |       
|Consolidated cost of products sold |  | $            | 682.6 |      |  | $       | 527.6 |        |  | $ | 155.0 |  |  |  | 29 | %
|                                  
|                                  
|                                  
|                                  
|Consolidated gross profit          |  | $            | 126.1 |      |  | $       | 96.7  |        |  | $ | 29.4  |  |  |  | 30 | %
|                                  
|                                  
|                                  
|                                  
|Gross margin                       |  |              | 15.6  | %    |  |         | 15.5  | %      |  |   |       |  |  |  |    |  

Cost of products sold increased 29% in 2004 compared to 2003,
while gross margin increased to 15.6% from 15.5% in 2003. ILS
gross margin decreased modestly, primarily due to steel price
increases and mix changes, and the negative impact of
$1.1 million resulting from the bankruptcy of a significant
customer, Murray, Inc. Aluminum Products gross margin decreased
due to a combination of the addition of lower-margin Amcast
business, product mix and pricing changes, and specific one-time
costs incurred in 2004 for product startup, scrap and reserves.
The $30.4 million of sales from the acquired Amcast
business generated significantly lower margins than the existing
Aluminum Products business. We expect margins at the acquired
plants to increase over time, as a result of post-acquisition
cost reductions, price increases and new business. Gross margin
in the Manufactured Products segment increased, primarily as a
result of increased sales and overhead efficiencies achieved in
the induction equipment, pipe threading equipment and forging
businesses. Gross margins in both the Aluminum Products and
Manufactured Products segments were negatively impacted by
rising natural gas costs.



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

|                           |  |              |      |      |  |         |      |        |  |   |      |  |  |  |    |  
|-------------------------- |  | ------------ | ---- | ---- |  | ------- | ---- | ------ |  | - | ---- |  |  |  | -- | -
|                           |  |              |      |      |  |        
|                           |  | Year Ended   |      |      |  |        
|                           |  | December 31, |      |      |  |        
|                           |  |              |      |      |  | Percent
|                           |  | 2004         |      | 2003 |  | Change  |      | Change
|                           |  |              |      |      |  |         |      |       
|Consolidated SG&A expenses |  | $            | 76.7 |      |  | $       | 62.4 |        |  | $ | 14.3 |  |  |  | 23 | %
|                          
|                          
|                          
|                          
|SG&A as a percent of sales |  |              | 9.5  | %    |  |         | 10.0 | %      |  |   |      |  |  |  |    |  

Consolidated SG&A expenses increased by 23% in 2004 compared
to 2003. Approximately $5.5 million of the SG&A
increase was due to acquisitions, primarily Jamco and Amcast
Components Group, and compliance costs associated with
Section 404 of the Sarbanes-Oxley Act, while the remainder
was primarily due to increased sales and production volumes.
Despite this increase, SG&A expenses as a percent of sales
decreased by 50 basis points due both to cost reductions
from restructuring and to the absorption of these expenses over
increased sales. SG&A expenses were reduced in 2004 compared
to 2003 by a $2.3 million increase in net pension credits
reflecting improved returns on pension plan assets.



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

|                                                           |  |              |       |      |  |         |       |        |  |                   |      |  |  |  |    |  
|---------------------------------------------------------- |  | ------------ | ----- | ---- |  | ------- | ----- | ------ |  | ----------------- | ---- |  |  |  | -- | -
|                                                           |  |              |       |      |  |        
|                                                           |  | Year Ended   |       |      |  |        
|                                                           |  | December 31, |       |      |  |        
|                                                           |  |              |       |      |  | Percent
|                                                           |  | 2004         |       | 2003 |  | Change  |       | Change
|                                                           |  |              |       |      |  |         |       |       
|Interest expense                                           |  | $            | 31.4  |      |  | $       | 26.2  |        |  |                   | $5.2 |  |  |  | 20 | %
|                                                          
|                                                          
|                                                          
|                                                          
|Debt extinguishment costs included in interest
    expense |  | $            | 6.0   |      |  |         |       |        |  |                   |      |  |  |  |    |  
|                                                          
|                                                          
|                                                          
|                                                          
|Average outstanding borrowings                             |  | $            | 328.9 |      |  | $       | 320.8 |        |  |                   | $8.1 |  |  |  | 3  | %
|                                                          
|                                                          
|                                                          
|                                                          
|Average borrowing rate                                     |  |              | 7.74  | %    |  |         | 8.15  | %      |  | (41) basis points |      |  |  | 

Interest expense increased in 2004 compared to 2003, primarily
due to the fourth quarter 2004 debt extinguishment costs. These
costs primarily related to premiums and other transaction costs
associated with the tender and early redemption and writeoff of
deferred financing costs associated with the 9.25% Senior
Subordinated Notes. Excluding these costs, interest decreased
due to lower average interest rates in 2004, partially offset by
higher average outstanding borrowings. The lower average

10



---



##### 







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

The effective income tax rate for 2004 was 19%. Primarily
foreign and certain state income taxes were provided for in both
years, because federal income taxes were not owed due to the
recognition of net operating loss carryforwards for which
valuation allowances had been provided. At December 31,
2004, our subsidiaries had $47.7 million of net operating
loss carryforwards for federal tax purposes. We have not
recognized any tax benefit for these loss carryforwards. In
accordance with the provision of Statement of Financial
Accounting Standards No. 109 (FAS 109),
Accounting for Income Taxes, we recorded no tax
benefit for the 2003 net loss because we had incurred three
years of cumulative losses. Income taxes of $.9 million
were provided in 2003, primarily for state and foreign taxes on
profitable operations.



| |                 
| | ----------------
| | 2003 versus 2002



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

|                       |  |              |       |      |  |         |       |        |  |   |       |   |  |  |     |  
|---------------------- |  | ------------ | ----- | ---- |  | ------- | ----- | ------ |  | - | ----- | - |  |  | --- | -
|                       |  |              |       |      |  |        
|                       |  | Year Ended   |       |      |  |        
|                       |  | December 31, |       |      |  |        
|                       |  |              |       |      |  | Percent
|                       |  | 2003         |       | 2002 |  | Change  |       | Change
|                       |  |              |       |      |  |         |       |       
|ILS                    |  | $            | 377.6 |      |  | $       | 398.1 |        |  | $ | (20.5 | ) |  |  | -5  | %
|                      
|                      
|                      
|                      
|Aluminum products      |  |              | 90.1  |      |  |         | 106.1 |        |  |   | (16.0 | ) |  |  | -15 | %
|                      
|                      
|                      
|                      
|Manufactured products  |  |              | 156.6 |      |  |         | 130.2 |        |  |   | 26.4  |   |  |  | 20  | %
|                       |  |              |       |      |  |         |       |        |  |   |       |   |  |  |     |  
|Consolidated net sales |  | $            | 624.3 |      |  | $       | 634.4 |        |  | $ | (10.1 | ) |  |  | -2  | %
|                       |  |              |       |      |  |         |       |        |  |   |       |   |  |  |     |  

Net sales declined by 2% in 2003. $10.4 million of the ILS
sales decline related to the sale of Green Bearing and the
termination of a high-margin pharmaceutical sales contract,
while the remainder reflected general economic weakness.
Aluminum Products net sales were lower primarily due to the
ending of $10.0 million of sales contracts, the majority of
which relate to the closure of the Tupelo and Hudson plants.
Manufactured Products net sales increased $26.4 million
primarily in the induction business. The acquisition of Ajax
Magnethermic increased 2003 net sales by $29.6 million
and the divestiture of Castle Rubber and St. Louis Screw
decreased 2003 net sales by $6.8 million.



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

|                                                                              |  |              |       |      |  |        |       |         |  |  |        |   |  |  |     | 
|----------------------------------------------------------------------------- |  | ------------ | ----- | ---- |  | ------ | ----- | ------- |  |  | ------ | - |  |  | --- | 
|                                                                              |  |              |       |      |  |       
|                                                                              |  | Year Ended   |       |      |  |       
|                                                                              |  | December 31, |       |      |  |       
|                                                                              |  |              |       |      |  |       
|                                                                              |  | 2003         |       | 2002 |  | Change |       | Percent
|                                                                              |  |              |       |      |  |        |       |        
|Consolidated cost of products sold                                            |  | $            | 527.6 |      |  | $      | 546.9 |         |  |  | $(19.3 | ) |  |  | -4% | 
|                                                                             
|                                                                             
|                                                                             
|                                                                             
|Inventory writedowns from restructuring included
    in Cost of Products Sold |  |              | 0.6   |      |  |        | 5.6   |         |  |  | (5.0   | ) |  |  |     | 
|                                                                             
|                                                                             
|                                                                             
|                                                                             
|Net gross profit impact of acquisition &
    divestitures                     |  |              | (4.4  | )    |  |        |       |         |  |  | (4.4   | ) |  |  |     | 
|                                                                             
|                                                                             
|                                                                             
|                                                                             
|Consolidated gross profit                                                     |  | $            | 96.7  |      |  | $      | 87.6  |         |  |  | $ 9.1  |   |  |  | 10% | 
|                                                                             
|                                                                             
|                                                                             
|                                                                             
|Gross margin                                                                  |  |              | 15.5  | %    |  |        | 13.8  | %       |  |  |        |   |  |  |     | 

Cost of products sold declined 4% in 2003, and gross profit
increased 10%, while gross margin increased to 15.5% in 2003,
from 13.8% in 2002. ILS gross margin decreased primarily due to
reduced absorption of fixed overhead over a smaller sales base
and the positive effect on 2002 of the early termination of a
high-margin pharmaceutical sales contract, partially offset by
lower inventory costs, facility costs and other cost reductions.
Aluminum Products gross margin increased significantly,
primarily as a result of restructuring and cost reductions and
higher margins on new contracts. Gross margin in the
Manufactured Products segment increased, primarily as a result
of increased sales and overhead efficiencies achieved in the
induction business.

11



---



##### 





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

|                                                          |  |              |      |      |  |         |      |        |  |         |      |         |  |  |   |   |  |  |       |  |  |  |     |  
|--------------------------------------------------------- |  | ------------ | ---- | ---- |  | ------- | ---- | ------ |  | ------- | ---- | ------- |  |  | - | - |  |  | ----- |  |  |  | --- | -
|                                                          |  |              |      |      |  |         |      |        |  |        
|                                                          |  | Year Ended   |      |      |  |         |      |        |  |        
|                                                          |  | December 31, |      |      |  |         |      | 2003   |  | 2002   
|                                                          |  |              |      |      |  | Percent |      | SG&A   |  | SG&A   
|                                                          |  | 2003         |      | 2002 |  | Change  |      | Change |  | Percent |      | Percent
|                                                          |  |              |      |      |  |         |      |        |  |         |      |        
|Consolidated SG&A expenses                                |  | $            | 62.4 |      |  | $       | 57.4 |        |  | $       | 5.0  |         |  |  | 9 | % |  |  | 10.0% |  |  |  | 9.1 | %
|                                                         
|                                                         
|                                                         
|                                                         
|Net SG&A expense impact of
    acquisition & divestitures |  |              | (3.9 | )    |  |         |      |        |  |         | (3.9 | )       |  |  |   |   |  |  |       |  |  |  |     |  

Consolidated SG&A expenses increased by 8% in 2003, while
SG&A expenses as a percentage of net sales increased to
10.0% for 2003 compared to 9.1% for 2002. This increase was due
primarily to the net impact of acquisitions and divestitures and
the $2.6 million reduction of net pension credits
reflecting less favorable returns on pension plan assets,
partially offset by reductions in other SG&A costs in all
three segments.



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

|                               |  |              |       |      |  |        |       |         |  |                   |        |   |  |  |     | 
|------------------------------ |  | ------------ | ----- | ---- |  | ------ | ----- | ------- |  | ----------------- | ------ | - |  |  | --- | 
|                               |  |              |       |      |  |       
|                               |  | Year Ended   |       |      |  |       
|                               |  | December 31, |       |      |  |       
|                               |  |              |       |      |  |       
|                               |  | 2003         |       | 2002 |  | Change |       | Percent
|                               |  |              |       |      |  |        |       |        
|Interest expense               |  | $            | 26.2  |      |  | $      | 27.6  |         |  |                   | $(1.4  | ) |  |  | -5% | 
|                              
|                              
|                              
|                              
|Average outstanding borrowings |  | $            | 320.8 |      |  | $      | 333.6 |         |  |                   | $(12.8 | ) |  |  | -4% | 
|                              
|                              
|                              
|                              
|Average borrowing rate         |  |              | 8.15  | %    |  |        | 8.28  | %       |  | (13) basis points |        |   |  | 

Interest expense decreased by 5% due to lower average debt
outstanding and lower average interest rates during 2003. The
decrease in average borrowings resulted primarily from the sale
of two manufacturing units and lower working capital
requirements. The lower average borrowing rate in 2003 was due
primarily to decreased rates on the Companys new revolving
credit agreement, beginning in August 2003.



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

In accordance with the provision of FAS 109, the Company
recorded no tax benefit for the 2003 or 2002 net losses,
because in both years it had incurred three years of cumulative
losses. Income taxes of $.9 million were provided in 2003
and 2002, primarily for state and foreign taxes on profitable
operations. At December 31, 2003, subsidiaries of the
Company had $35.7 million of net operating loss
carryforwards for federal tax purposes. The Company has not
recognized any tax benefit for these loss carryforwards.

Critical Accounting Policies

Preparation of financial statements in conformity with GAAP
requires management to make certain estimates and assumptions
which affect amounts reported in our consolidated financial
statements. Management has made their best estimates and
judgments of certain amounts included in the financial
statements, giving due consideration to materiality. We do not
believe that there is great likelihood that materially different
amounts would be reported under different conditions or using
different assumptions related to the accounting policies
described below. However, application of these accounting
policies involves the exercise of judgment and use of
assumptions as to future uncertainties and, as a result, actual
results could differ from these estimates.

Revenue Recognition: We recognize more than 93% of our
revenue when title is transferred to unaffiliated customers,
typically upon shipment. Our remaining revenue, from long-term
contracts, is recognized using the percentage of completion
method of accounting. Selling prices are fixed based on purchase
orders or contractual arrangements. Our revenue recognition
policies are in accordance with the SECs Staff Accounting
Bulletin (SAB) No. 101, Revenue
Recognition.

Allowance for Uncollectible Accounts Receivable: Accounts
receivable have been reduced by an allowance for amounts that
may become uncollectible in the future. Allowances are developed
by the individual operating units based on historical losses,
adjusting for economic conditions. Our policy is to identify and
reserve for specific collectibility concerns based on
customers financial condition and payment history. The
establishment of reserves requires the use of judgment and
assumptions regarding

12



---



##### 





Allowance for Obsolete and Slow Moving Inventory:
Inventories are stated at the lower of cost or market value and
have been reduced by an allowance for obsolete and slow-moving
inventories. The estimated allowance is based on
managements review of inventories on hand with minimal
sales activity, which is compared to estimated future usage and
sales. Inventories identified by management as slow-moving or
obsolete are reserved for based on estimated selling prices less
disposal costs. Though we consider these allowances adequate and
proper, changes in economic conditions in specific markets in
which we operate could have a material effect on reserve
allowances required.

Impairment of Long-Lived Assets: Long-lived assets are
reviewed by management for impairment whenever events or changes
in circumstances indicate the carrying amount may not be
recoverable. During 2003, 2002 and 2001, the Company decided to
exit certain under-performing product lines and to close or
consolidate certain operating facilities and, accordingly,
recorded restructuring and impairment charges as discussed above
and in Note N to the consolidated financial statements
included elsewhere herein.

Restructuring: We recognize costs in accordance with
Emerging Issues Task Force Issue No. 94-3, Liability
Recognition for Certain Employee Termination Benefits and Other
Costs to Exit an Activity (including Certain Costs incurred in a
Restructuring) (EITF 94-3), and SAB
No. 100, Restructuring and Impairment Charges
for charges prior to 2003. Detailed contemporaneous
documentation is maintained and updated on a quarterly basis to
ensure that accruals are properly supported. If management
determines that there is a change in the estimate, the accruals
are adjusted to reflect the changes.

In 2003, the Company adopted Statement of Financial Accounting
Standards No. 146, Accounting for Costs Associated
with Exit or Disposal Activities
(FAS 146), which nullified EITF 94-3 and
requires that a liability for a cost associated with an exit or
disposal activity be recognized and measured initially at the
fair value only when the liability is incurred. FAS 146 has
no effect on charges recorded for exit activities begun prior to
2002.

Goodwill: We adopted FAS 142 as of January 1,
2002. Under FAS 142, we are required to review goodwill for
impairment annually or more frequently if impairment indicators
arise.

We completed the transitional impairment review of goodwill
during the fourth quarter of 2002 and recorded a non-cash charge
of $48.8 million. The charge has been reported as a
cumulative effect of a change in accounting principle. We have
also completed the annual impairment test as of October 1,
2004, 2003 and 2002 and have determined that no additional
goodwill impairment existed as of those dates.

Deferred Income Tax Assets and Liabilities: We account
for income taxes under the liability method, whereby deferred
tax assets and liabilities are determined based on temporary
differences between the financial reporting and the tax bases of
assets and liabilities and are measured using the currently
enacted tax rates. In determining these amounts, management
determined the probability of realizing deferred tax assets,
taking into consideration factors including historical operating
results, expectations of future earnings and taxable income and
the extended period of time over which the postretirement
benefits will be paid.

At December 31, 2004, the Company had net operating loss
carryforwards for income tax purposes of approximately
$47.7 million, which will expire between 2021 and 2024. In
accordance with the provisions of FAS 109, the tax benefits
related to these carryforwards have been fully reserved as of
December 31, 2004 because the Company is in a three-year
cumulative loss position.

Pension and Other Postretirement Benefit Plans: We and
our subsidiaries have pension plans, principally noncontributory
defined benefit or noncontributory defined contribution plans
and postretirement benefit plans covering substantially all
employees. The measurement of liabilities related to these plans
is based on managements assumptions related to future
events, including interest rates, return on pension plan assets,
rate of compensation increases and health care cost trends.
Pension plan asset performance in the future will directly
impact our net income. We have evaluated our pension and other
postretirement benefit assumptions, considering current trends
in interest rates and market conditions and believe our
assumptions are appropriate.

13



---



##### 



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 Annual Report on Form 10-K 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
the Senior Subordinated Notes; increasingly stringent domestic
and foreign governmental regulations, including those affecting
the environment; inherent uncertainties involved in assessing
our potential liability for environmental remediation-related
activities; the outcome of pending and future litigation and
other claims; dependence on the automotive and heavy-duty truck
industries, which are highly cyclical; dependence on key
management; and dependence on information systems. Any
forward-looking statement speaks only as of the date on which
such statement is made, and we undertake no obligation to update
any forward-looking statement, whether as a result of new
information, future events or otherwise. In light of these and
other uncertainties, the inclusion of a forward-looking
statement herein should not be regarded as a representation by
us that our plans and objectives will be achieved.



|         |                                                          
|-------- | ---------------------------------------------------------
|Item 7A. | 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 our floating rate
revolving credit facility, which consisted of borrowings of
$120.6 million at December 31, 2004. A 100 basis
point increase in the interest rate would have resulted in an
increase in interest expense of approximately $1.2 million
for the year ended December 31, 2004.

Our foreign subsidiaries generally conduct business in local
currencies. During 2004, we recorded a favorable foreign
currency translation adjustment of $2.1 million related to
net assets located outside the United States. This foreign
currency translation adjustment resulted primarily from the
weakening of the United States dollar in relation to the
Canadian dollar, British pound and euro. 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.

Our largest exposures to commodity prices relate to steel and
natural gas price increases, which have increased significantly
in 2004. We do not have any commodity swap agreements or hedge
contracts for future increases in steel or natural gas prices.

14



---



##### 








|        |                                            
|------- | -------------------------------------------
|Item 8. | Financial Statements and Supplementary Data

Index to Consolidated Financial Statements

|                                                                                                         |  |      |    | 
|-------------------------------------------------------------------------------------------------------- |  | ---- | -- | 
|                                                                                                         |  | Page
|                                                                                                         |  |     
|Managements Annual Report on Internal
    Control Over Financial Reporting                              |  |      | 16 | 
|                                                                                                        
|                                                                                                        
|                                                                                                        
|                                                                                                        
|Report of Independent Registered Public
    Accounting Firm on Internal Control Over Financial Reporting |  |      | 17 | 
|                                                                                                        
|                                                                                                        
|                                                                                                        
|                                                                                                        
|Report of Independent Registered Public
    Accounting Firm                                              |  |      | 18 | 
|                                                                                                        
|                                                                                                        
|                                                                                                        
|                                                                                                        
|Consolidated Balance Sheets 
    December 31, 2004 and 2003                                             |  |      | 19 | 
|                                                                                                        
|                                                                                                        
|                                                                                                        
|                                                                                                        
|Consolidated Statements of Operations 
    Years Ended December 31, 2004, 2003 and 2002                 |  |      | 20 | 
|                                                                                                        
|                                                                                                        
|                                                                                                        
|                                                                                                        
|Consolidated Statements of Shareholders
    Equity  Years Ended December 31, 2004, 2003 and
    2002   |  |      | 21 | 
|                                                                                                        
|                                                                                                        
|                                                                                                        
|                                                                                                        
|Consolidated Statements of Cash Flows 
    Years Ended December 31, 2004, 2003 and 2002                 |  |      | 22 | 
|                                                                                                        
|                                                                                                        
|                                                                                                        
|                                                                                                        
|Notes to Consolidated Financial Statements                                                               |  |      | 23 | 

15



---



##### 



MANAGEMENTS ANNUAL REPORT ON INTERNAL CONTROL OVER
FINANCIAL REPORTING

The Companys management is responsible for establishing
and maintaining adequate internal control over financial
reporting, as such term is defined in Rule 15d-15(f) under
the Exchange Act. The Companys management carried out an
evaluation, with the participation of the Companys Chief
Executive Officer and Chief Financial Officer, of the
effectiveness of its internal control over financial reporting
as of the end of the last fiscal year. The framework on which
such evaluation was based is contained in the report entitled
Internal Control  Integrated Framework
issued by the Committee of Sponsoring Organizations of the
Treadway Commission (the COSO Report). Based upon
the evaluation described above under the framework contained in
the COSO Report, the Companys management concluded that
the Companys internal control over financial reporting was
effective as of December 31, 2004. Management has
identified no material weakness in internal control over
financial reporting.

Ernst & Young LLP, the Companys independent
registered public accounting firm, has issued an attestation
report on the Companys managements assessment of the
effectiveness of the Companys internal control over
financial reporting as of December 31, 2004. This
attestation report is included at page 17 of this Annual
Report on Form 10-K.

Park-Ohio Industries, Inc.



16



---



##### 



REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

The Board of Directors and Shareholder



We have audited managements assessment, included in the
accompanying Managements Annual Report on Internal Control
Over Financial Reporting, that Park-Ohio Industries, Inc.
maintained effective internal control over financial reporting
as of December 31, 2004, based on criteria established in
Internal Control  Integrated Framework issued by the
Committee of Sponsoring Organizations of the Treadway Commission
(the COSO criteria). Park-Ohio Industries, Inc. management is
responsible for maintaining effective internal control over
financial reporting and for its assessment of the effectiveness
of internal control over financial reporting. Our responsibility
is to express an opinion on managements assessment and an
opinion on the effectiveness of the companys internal
control over financial reporting based on our audit.

We conducted our audit in accordance with the standards of the
Public Company Accounting Oversight Board (United States). Those
standards require that we plan and perform the audit to obtain
reasonable assurance about whether effective internal control
over financial reporting was maintained in all material
respects. Our audit included obtaining an understanding of
internal control over financial reporting, evaluating
managements assessment, testing and evaluating the design
and operating effectiveness of internal control, and performing
such other procedures as we considered necessary in the
circumstances. We believe that our audit provides a reasonable
basis for our opinion.

A companys internal control over financial reporting is a
process designed to provide reasonable assurance regarding the
reliability of financial reporting and the preparation of
financial statements for external purposes in accordance with
generally accepted accounting principles. A companys
internal control over financial reporting includes those
policies and procedures that (1) pertain to the maintenance
of records that, in reasonable detail, accurately and fairly
reflect the transactions and dispositions of the assets of the
company; (2) provide reasonable assurance that transactions
are recorded as necessary to permit preparation of financial
statements in accordance with generally accepted accounting
principles, and that receipts and expenditures of the company
are being made only in accordance with authorizations of
management and directors of the company; and (3) provide
reasonable assurance regarding prevention or timely detection of
unauthorized acquisition, use, or disposition of the
companys assets that could have a material effect on the
financial statements.

Because of its inherent limitations, internal control over
financial reporting may not prevent or detect misstatements.
Also, projections of any evaluation of effectiveness to future
periods are subject to the risk that controls may become
inadequate because of changes in conditions, or that the degree
of compliance with the policies or procedures may deteriorate.

In our opinion, managements assessment that Park-Ohio
Industries, Inc. maintained effective internal control over
financial reporting as of December 31, 2004, is fairly
stated, in all material respects, based on the COSO criteria.
Also, in our opinion, Park-Ohio Industries, Inc. maintained, in
all material respects, effective internal control over financial
reporting as of December 31, 2004, based on the COSO
criteria.

We also have audited, in accordance with the standards of the
Public Company Accounting Oversight Board (United States), the
consolidated balance sheets of Park-Ohio Industries, Inc. as of
December 31, 2004 and 2003, and the related consolidated
statements of operations, shareholders equity and cash
flows for each of the three years in the period ended
December 31, 2004 and our report dated March 10, 2005
expressed an unqualified opinion thereon.



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

Cleveland, Ohio



17



---



##### 



REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

Board of Directors and Shareholder



We have audited the accompanying consolidated balance sheets of
Park-Ohio Industries, Inc. and subsidiaries as of
December 31, 2004 and 2003, and the related consolidated
statements of operations, shareholders equity and cash
flows for each of the three years in the period ended
December 31, 2004. These financial statements are the
responsibility of the Companys management. Our
responsibility is to express an opinion on these financial
statements based on our audits.

We conducted our audits in accordance with standards of the
Public Company Accounting Oversight Board (United States). Those
standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are
free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in
the financial statements. An audit also includes assessing the
accounting principles used and significant estimates made by
management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a
reasonable basis for our opinion.

In our opinion, the financial statements referred to above
present fairly, in all material respects, the consolidated
financial position of Park-Ohio Industries, Inc. and
subsidiaries at December 31, 2004 and 2003 and the
consolidated results of their operations and their cash flows
for each of the three years in the period ended
December 31, 2004 in conformity with U.S. generally
accepted accounting principles.

As discussed in Note B to the consolidated financial
statements, effective June 30, 2003, the Company changed
its method of accounting for inventories at certain
subsidiaries. As discussed in Note C to the consolidated
financial statements, in 2002 the Company changed its method of
accounting for goodwill.

We also have audited, in accordance with the standards of the
Public Company Accounting Oversight Board (United States), the
effectiveness of the Companys internal control over
financial reporting as of December 31, 2004, based on
criteria established in the Internal Control 
Integrated Framework issued by the Committee of Sponsoring
Organizations of the Treadway Commission and our report dated
March 10, 2005 expressed an unqualified opinion thereon.



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

Cleveland, Ohio



18



---



##### 



Park-Ohio Industries, Inc. and Subsidiaries

Consolidated Balance Sheets

|                                            |                                                                                                     |                                          |         |         |         |   |         |         |         | 
|------------------------------------------- | --------------------------------------------------------------------------------------------------- | ---------------------------------------- | ------- | ------- | ------- | - | ------- | ------- | ------- | 
|                                            |                                                                                                     |                                         
|                                            |                                                                                                     | December 31,                            
|                                            |                                                                                                     |                                         
|                                            |                                                                                                     | 2004                                     |         | 2003   
|                                            |                                                                                                     |                                          |         |        
|                                            |                                                                                                     |                                         
|                                            |                                                                                                     | (Dollars in thousands)                  
|                                           
|                                           
|                                           
|                                           
|ASSETS                                      |                                                                                                     |                                          |         |         |         |   |         |        
|Current Assets                              |                                                                                                     |                                          |         |         |         |   |         |        
|                                           
|                                           
|                                           
|                                           
|                                            | Cash and cash equivalents                                                                           |                                          | $       | 6,407   |         |   | $       | 2,191   |        
|                                           
|                                           
|                                           
|                                           
|                                            | Accounts receivable, less allowances for doubtful
    accounts of $3,976 in 2004 and $3,271 in 2003 |                                          |         | 145,475 |         |   |         | 100,938 |        
|                                           
|                                           
|                                           
|                                           
|                                            | Inventories                                                                                         |                                          |         | 177,294 |         |   |         | 149,075 |        
|                                           
|                                           
|                                           
|                                           
|                                            | Other current assets                                                                                |                                          |         | 20,655  |         |   |         | 16,155  |        
|                                            |                                                                                                     |                                          |         |         |         |   |         |        
|                                            |                                                                                                     | Total Current Assets                     |         |         | 349,831 |   |         |         | 268,359 | 
|Property, Plant and Equipment               |                                                                                                     |                                          |         |         |         |   |         |        
|                                           
|                                           
|                                           
|                                           
|                                            | Land and land improvements                                                                          |                                          |         | 6,788   |         |   |         | 6,059   |        
|                                           
|                                           
|                                           
|                                           
|                                            | Buildings                                                                                           |                                          |         | 36,217  |         |   |         | 37,606  |        
|                                           
|                                           
|                                           
|                                           
|                                            | Machinery and equipment                                                                             |                                          |         | 185,489 |         |   |         | 181,045 |        
|                                            |                                                                                                     |                                          |         |         |         |   |         |        
|                                            |                                                                                                     |                                          | 228,494 |         |         |   | 224,710 |        
|                                           
|                                           
|                                           
|                                           
|                                            | Less accumulated depreciation                                                                       |                                          |         | 118,613 |         |   |         | 129,434 |        
|                                            |                                                                                                     |                                          |         |         |         |   |         |        
|                                            |                                                                                                     |                                          | 109,881 |         |         |   | 95,276  |        
|Other Assets                                |                                                                                                     |                                          |         |         |         |   |         |        
|                                           
|                                           
|                                           
|                                           
|                                            | Goodwill                                                                                            |                                          |         | 82,565  |         |   |         | 82,278  |        
|                                           
|                                           
|                                           
|                                           
|                                            | Net assets held for sale                                                                            |                                          |         | 1,035   |         |   |         | 2,321   |        
|                                           
|                                           
|                                           
|                                           
|                                            | Other                                                                                               |                                          |         | 68,535  |         |   |         | 61,310  |        
|                                            |                                                                                                     |                                          |         |         |         |   |         |        
|                                            |                                                                                                     | $                                        | 611,847 |         |         | $ | 509,544 |        
|                                            |                                                                                                     |                                          |         |         |         |   |         |        
|                                           
|                                           
|                                           
|                                           
|                                           
|                                            |                                                                                                     | LIABILITIES AND SHAREHOLDERS
    EQUITY |         |         |         |   |         |         |         | 
|Current Liabilities                         |                                                                                                     |                                          |         |         |         |   |         |        
|                                           
|                                           
|                                           
|                                           
|                                            | Trade accounts payable                                                                              |                                          | $       | 108,862 |         |   | $       | 66,153  |        
|                                           
|                                           
|                                           
|                                           
|                                            | Accrued expenses                                                                                    |                                          |         | 59,745  |         |   |         | 46,384  |        
|                                           
|                                           
|                                           
|                                           
|                                            | Current portion of long-term liabilities                                                            |                                          |         | 5,812   |         |   |         | 2,811   |        
|                                            |                                                                                                     |                                          |         |         |         |   |         |        
|                                            |                                                                                                     | Total Current Liabilities                |         |         | 174,419 |   |         |         | 115,348 | 
|Long-Term Liabilities, less current portion |                                                                                                     |                                          |         |         |         |   |         |        
|                                           
|                                           
|                                           
|                                           
|                                            | 8.375% Senior Subordinated Notes due 2014                                                           |                                          |         | 210,000 |         |   |         | -0-     |        
|                                           
|                                           
|                                           
|                                           
|                                            | 9.25% Senior Subordinated Notes due 2007                                                            |                                          |         | -0-     |         |   |         | 199,930 |        
|                                           
|                                           
|                                           
|                                           
|                                            | Revolving credit                                                                                    |                                          |         | 120,600 |         |   |         | 101,000 |        
|                                           
|                                           
|                                           
|                                           
|                                            | Other long-term debt                                                                                |                                          |         | 4,776   |         |   |         | 8,234   |        
|                                           
|                                           
|                                           
|                                           
|                                            | Other postretirement benefits and other long-term
    liabilities                                   |                                          |         | 27,570  |         |   |         | 26,671  |        
|                                            |                                                                                                     |                                          |         |         |         |   |         |        
|                                            |                                                                                                     |                                          | 362,946 |         |         |   | 335,835 |        
|Shareholders Equity                        |                                                                                                     |                                          |         |         |         |   |         |        
|                                           
|                                           
|                                           
|                                           
|                                            | Common stock, par value $1 a share                                                                  |                                          |         | -0-     |         |   |         | -0-     |        
|                                           
|                                           
|                                           
|                                           
|                                            | Additional paid-in capital                                                                          |                                          |         | 64,844  |         |   |         | 64,844  |        
|                                           
|                                           
|                                           
|                                           
|                                            | Retained earnings                                                                                   |                                          |         | 11,314  |         |   |         | (3,219  | )      
|                                           
|                                           
|                                           
|                                           
|                                            | Accumulated other comprehensive loss                                                                |                                          |         | (1,676  | )       |   |         | (3,264  | )      
|                                            |                                                                                                     |                                          |         |         |         |   |         |        
|                                            |                                                                                                     |                                          | 74,482  |         |         |   | 58,361  |        
|                                            |                                                                                                     |                                          |         |         |         |   |         |        
|                                            |                                                                                                     | $                                        | 611,847 |         |         | $ | 509,544 |        
|                                            |                                                                                                     |                                          |         |         |         |   |         |        

See notes to consolidated financial statements.

19



---



##### 



Park-Ohio Industries, Inc. and Subsidiaries

Consolidated Statements of Operations

|                                             |                  |                                                                                  |         |         |        |      |         |        |         |   |         |        |         |  
|-------------------------------------------- | ---------------- | -------------------------------------------------------------------------------- | ------- | ------- | ------ | ---- | ------- | ------ | ------- | - | ------- | ------ | ------- | -
|                                             |                  |                                                                                 
|                                             |                  | Year Ended December 31,                                                         
|                                             |                  |                                                                                 
|                                             |                  | 2004                                                                             |         | 2003    |        | 2002
|                                             |                  |                                                                                  |         |         |        |     
|                                             |                  |                                                                                 
|                                             |                  | (Dollars in thousands)                                                          
|                                            
|                                            
|                                            
|                                            
|Net sales                                    |                  | $                                                                                | 808,718 |         |        | $    | 624,295 |        |         | $ | 634,455 |       
|                                            
|                                            
|                                            
|                                            
|Cost of products sold                        |                  |                                                                                  | 682,658 |         |        |      | 527,586 |        |         |   | 546,857 |       
|                                             |                  |                                                                                  |         |         |        |      |         |        |         |   |         |       
|                                             | Gross profit     |                                                                                  |         | 126,060 |        |      |         | 96,709 |         |   |         | 87,598 |        
|                                            
|                                            
|                                            
|                                            
|Selling, general and administrative expenses |                  |                                                                                  | 76,714  |         |        |      | 62,369  |        |         |   | 57,418  |       
|                                            
|                                            
|                                            
|                                            
|Restructuring and impairment charges         |                  |                                                                                  | -0-     |         |        |      | 18,808  |        |         |   | 13,601  |       
|                                             |                  |                                                                                  |         |         |        |      |         |        |         |   |         |       
|                                             | Operating income |                                                                                  |         | 49,346  |        |      |         | 15,532 |         |   |         | 16,579 |        
|                                            
|                                            
|                                            
|                                            
|Interest expense                             |                  |                                                                                  | 31,413  |         |        |      | 26,151  |        |         |   | 27,623  |       
|                                             |                  |                                                                                  |         |         |        |      |         |        |         |   |         |       
|                                             |                  | Income (loss) before income taxes and cumulative
    effect of accounting change |         |         | 17,933 |      |         |        | (10,619 | ) |         |        | (11,044 | )
|                                            
|                                            
|                                            
|                                            
|Income taxes                                 |                  |                                                                                  | 3,400   |         |        |      | 904     |        |         |   | 897     |       
|                                             |                  |                                                                                  |         |         |        |      |         |        |         |   |         |       
|                                             |                  | Income (loss) before cumulative effect of
    accounting change                  |         |         | 14,533 |      |         |        | (11,523 | ) |         |        | (11,941 | )
|                                            
|                                            
|                                            
|                                            
|Cumulative effect of accounting change       |                  |                                                                                  | -0-     |         |        |      | -0-     |        |         |   | (48,799 | )     
|                                             |                  |                                                                                  |         |         |        |      |         |        |         |   |         |       
|                                             |                  | Net income (loss)                                                                |         | $       | 14,533 |      |         | $      | (11,523 | ) |         | $      | (60,740 | )
|                                             |                  |                                                                                  |         |         |        |      |         |        |         |   |         |       

See notes to consolidated financial statements.

20



---



##### 



Park-Ohio Industries, Inc. and Subsidiaries

Consolidated Statements of Shareholders Equity

|                             |                                         |                        |     |            |  |          |        |               |  |       |        |         |   |   |        |        |   |   |         |         |  
|---------------------------- | --------------------------------------- | ---------------------- | --- | ---------- |  | -------- | ------ | ------------- |  | ----- | ------ | ------- | - | - | ------ | ------ | - | - | ------- | ------- | -
|                             |                                         |                        |     |            |  |          |        | Accumulated   |  |      
|                             |                                         |                        |     | Additional |  |          |        | Other         |  |      
|                             |                                         | Common                 |     | Paid-In    |  | Retained |        | Comprehensive |  |      
|                             |                                         | Stock                  |     | Capital    |  | Earnings |        | Income (Loss) |  | Total
|                             |                                         |                        |     |            |  |          |        |               |  |      
|                             |                                         |                       
|                             |                                         | (Dollars in thousands)
|                            
|                            
|                            
|                            
|Balance at January 1, 2002   |                                         | $                      | -0- |            |  | $        | 64,844 |               |  | $     | 69,044 |         |   | $ | (4,252 | )      |   | $ | 129,636 |        
|                            
|                            
|                            
|                            
|Comprehensive (loss):        |                                         |                        |     |            |  |          |        |               |  |       |        |         |   |   |        |        |   |   |         |        
|                            
|                            
|                            
|                            
|                             | Net loss                                |                        |     |            |  |          |        |               |  |       |        | (60,740 | ) |   |        |        |   |   |         | (60,740 | )
|                            
|                            
|                            
|                            
|                             | Foreign currency translation adjustment |                        |     |            |  |          |        |               |  |       |        |         |   |   |        | 1,711  |   |   |         | 1,711   |  
|                            
|                            
|                            
|                            
|                             | Minimum pension liability               |                        |     |            |  |          |        |               |  |       |        |         |   |   |        | (5,555 | ) |   |         | (5,555  | )
|                             |                                         |                        |     |            |  |          |        |               |  |       |        |         |   |   |        |        |   |   |         |        
|                             | Comprehensive (loss)                    |                        |     |            |  |          |        |               |  |       |        |         |   |   |        |        |   |   |         | (64,584 | )
|                             |                                         |                        |     |            |  |          |        |               |  |       |        |         |   |   |        |        |   |   |         |        
|Balance at December 31, 2002 |                                         |                        | -0- |            |  |          | 64,844 |               |  |       | 8,304  |         |   |   | (8,096 | )      |   |   | 65,052  |        
|                            
|                            
|                            
|                            
|Comprehensive (loss):        |                                         |                        |     |            |  |          |        |               |  |       |        |         |   |   |        |        |   |   |         |        
|                            
|                            
|                            
|                            
|                             | Net Loss                                |                        |     |            |  |          |        |               |  |       |        | (11,523 | ) |   |        |        |   |   |         | (11,523 | )
|                            
|                            
|                            
|                            
|                             | Foreign currency translation adjustment |                        |     |            |  |          |        |               |  |       |        |         |   |   |        | 3,632  |   |   |         | 3,632   |  
|                            
|                            
|                            
|                            
|                             | Minimum pension liability               |                        |     |            |  |          |        |               |  |       |        |         |   |   |        | 1,200  |   |   |         | 1,200   |  
|                             |                                         |                        |     |            |  |          |        |               |  |       |        |         |   |   |        |        |   |   |         |        
|                             | Comprehensive (loss)                    |                        |     |            |  |          |        |               |  |       |        |         |   |   |        |        |   |   |         | (6,691  | )
|                             |                                         |                        |     |            |  |          |        |               |  |       |        |         |   |   |        |        |   |   |         |        
|Balance at December 31, 2003 |                                         |                        | -0- |            |  |          | 64,844 |               |  |       | (3,219 | )       |   |   | (3,264 | )      |   |   | 58,361  |        
|                            
|                            
|                            
|                            
|Comprehensive income (loss): |                                         |                        |     |            |  |          |        |               |  |       |        |         |   |   |        |        |   |   |         |        
|                            
|                            
|                            
|                            
|                             | Net income                              |                        |     |            |  |          |        |               |  |       |        | 14,533  |   |   |        |        |   |   |         | 14,533  |  
|                            
|                            
|                            
|                            
|                             | Foreign currency translation adjustment |                        |     |            |  |          |        |               |  |       |        |         |   |   |        | 2,071  |   |   |         | 2,071   |  
|                            
|                            
|                            
|                            
|                             | Minimum pension liability               |                        |     |            |  |          |        |               |  |       |        |         |   |   |        | (483   | ) |   |         | (483    | )
|                             |                                         |                        |     |            |  |          |        |               |  |       |        |         |   |   |        |        |   |   |         |        
|                             | Comprehensive income                    |                        |     |            |  |          |        |               |  |       |        |         |   |   |        |        |   |   |         | 16,121  |  
|                             |                                         |                        |     |            |  |          |        |               |  |       |        |         |   |   |        |        |   |   |         |        
|Balance at December 31, 2004 |                                         | $                      | -0- |            |  | $        | 64,844 |               |  | $     | 11,314 |         |   | $ | (1,676 | )      |   | $ | 74,482  |        
|                             |                                         |                        |     |            |  |          |        |               |  |       |        |         |   |   |        |        |   |   |         |        

See notes to consolidated financial statements.

21



---



##### 



Park-Ohio Industries, Inc. and Subsidiaries

Consolidated Statements of Cash Flows

|                                                                                      |                                       |                                                  |          |         |         |      |          |        |         |   |         |         |         |  
|------------------------------------------------------------------------------------- | ------------------------------------- | ------------------------------------------------ | -------- | ------- | ------- | ---- | -------- | ------ | ------- | - | ------- | ------- | ------- | -
|                                                                                      |                                       |                                                 
|                                                                                      |                                       | Year Ended December 31,                         
|                                                                                      |                                       |                                                 
|                                                                                      |                                       | 2004                                             |          | 2003    |         | 2002
|                                                                                      |                                       |                                                  |          |         |         |     
|                                                                                      |                                       |                                                 
|                                                                                      |                                       | (Dollars in thousands)                          
|OPERATING ACTIVITIES                                                                  |                                       |                                                  |          |         |         |      |          |        |         |   |         |        
|                                                                                     
|                                                                                     
|                                                                                     
|                                                                                     
|Net income (loss)                                                                     |                                       | $                                                | 14,533   |         |         | $    | (11,523  | )      |         | $ | (60,740 | )      
|                                                                                     
|                                                                                     
|                                                                                     
|                                                                                     
|Adjustments to reconcile net loss to net cash
    provided by operations:             |                                       |                                                  |          |         |         |      |          |        |         |   |         |        
|                                                                                     
|                                                                                     
|                                                                                     
|                                                                                     
|                                                                                      |                                       | Cumulative effect of accounting change           |          |         | -0-     |      |          |        | -0-     |   |         |         | 48,799  |  
|                                                                                     
|                                                                                     
|                                                                                     
|                                                                                     
|                                                                                      |                                       | Depreciation and amortization                    |          |         | 15,385  |      |          |        | 15,479  |   |         |         | 16,265  |  
|                                                                                     
|                                                                                     
|                                                                                     
|                                                                                     
|                                                                                      |                                       | Restructuring and impairment charges             |          |         | -0-     |      |          |        | 18,641  |   |         |         | 10,399  |  
|                                                                                     
|                                                                                     
|                                                                                     
|                                                                                     
|                                                                                      |                                       | Deferred income taxes                            |          |         | -0-     |      |          |        | -0-     |   |         |         | 1,951   |  
|                                                                                     
|                                                                                     
|                                                                                     
|                                                                                     
|Changes in operating assets and liabilities
    excluding acquisitions of businesses: |                                       |                                                  |          |         |         |      |          |        |         |   |         |        
|                                                                                     
|                                                                                     
|                                                                                     
|                                                                                     
|                                                                                      |                                       | Accounts receivable                              |          |         | (35,606 | )    |          |        | 539     |   |         |         | 4,652   |  
|                                                                                     
|                                                                                     
|                                                                                     
|                                                                                     
|                                                                                      |                                       | Inventories                                      |          |         | (26,541 | )    |          |        | 6,991   |   |         |         | 4,682   |  
|                                                                                     
|                                                                                     
|                                                                                     
|                                                                                     
|                                                                                      |                                       | Accounts payable and accrued expenses            |          |         | 39,400  |      |          |        | (12,160 | ) |         |         | 15,856  |  
|                                                                                     
|                                                                                     
|                                                                                     
|                                                                                     
|                                                                                      |                                       | Other                                            |          |         | (6,257  | )    |          |        | (6,149  | ) |         |         | (12,770 | )
|                                                                                      |                                       |                                                  |          |         |         |      |          |        |         |   |         |        
|                                                                                      |                                       | Net cash provided by operating activities        |          |         | 914     |      |          |        | 11,818  |   |         |         | 29,094  |  
|INVESTING ACTIVITIES                                                                  |                                       |                                                  |          |         |         |      |          |        |         |   |         |        
|                                                                                     
|                                                                                     
|                                                                                     
|                                                                                     
|Purchases of property, plant and equipment, net                                       |                                       |                                                  | (9,963   | )       |         |      | (10,869  | )      |         |   | (13,731 | )      
|                                                                                     
|                                                                                     
|                                                                                     
|                                                                                     
|Costs of acquisitions, net of cash acquired                                           |                                       |                                                  | (9,997   | )       |         |      | -0-      |        |         |   | (5,748  | )      
|                                                                                     
|                                                                                     
|                                                                                     
|                                                                                     
|Proceeds from the sale of business units                                              |                                       |                                                  | -0-      |         |         |      | 7,340    |        |         |   | 2,486   |        
|                                                                                      |                                       |                                                  |          |         |         |      |          |        |         |   |         |        
|                                                                                      | Net cash used by investing activities |                                                  |          | (19,960 | )       |      |          | (3,529 | )       |   |         | (16,993 | )      
|FINANCING ACTIVITIES                                                                  |                                       |                                                  |          |         |         |      |          |        |         |   |         |        
|                                                                                     
|                                                                                     
|                                                                                     
|                                                                                     
|Proceeds from bank arrangements, net                                                  |                                       |                                                  | 18,013   |         |         |      | 112,000  |        |         |   | 6,749   |        
|                                                                                     
|                                                                                     
|                                                                                     
|                                                                                     
|Payments on long-term debt                                                            |                                       |                                                  | (199,930 | )       |         |      | (126,898 | )      |         |   | (12,394 | )      
|                                                                                     
|                                                                                     
|                                                                                     
|                                                                                     
|Issuance of 8.375% Senior Subordinated
    Notes, net of deferred financing costs     |                                       |                                                  | 205,179  |         |         |      | -0-      |        |         |   | -0-     |        
|                                                                                      |                                       |                                                  |          |         |         |      |          |        |         |   |         |        
|                                                                                      |                                       | Net cash provided (used) by financing activities |          |         | 23,262  |      |          |        | (14,898 | ) |         |         | (5,645  | )
|                                                                                     
|                                                                                     
|                                                                                     
|                                                                                     
|                                                                                      |                                       | Increase (decrease) in cash and cash equivalents |          |         | 4,216   |      |          |        | (6,609  | ) |         |         | 6,456   |  
|                                                                                     
|                                                                                     
|                                                                                     
|                                                                                     
|                                                                                      |                                       | Cash and cash equivalents at beginning of year   |          |         | 2,191   |      |          |        | 8,800   |   |         |         | 2,344   |  
|                                                                                      |                                       |                                                  |          |         |         |      |          |        |         |   |         |        
|                                                                                      |                                       | Cash and cash equivalents at end of year         |          | $       | 6,407   |      |          | $      | 2,191   |   |         | $       | 8,800   |  
|                                                                                      |                                       |                                                  |          |         |         |      |          |        |         |   |         |        
|Income taxes paid (refunded)                                                          |                                       | $                                                | 3,370    |         |         | $    | (1,038   | )      |         | $ | (4,817  | )      
|                                                                                     
|                                                                                     
|                                                                                     
|                                                                                     
|Interest paid                                                                         |                                       |                                                  | 28,891   |         |         |      | 25,213   |        |         |   | 25,880  |        

See notes to consolidated financial statements.

22



---



##### 



PARK-OHIO INDUSTRIES, INC. AND SUBSIDIARIES



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


December 31, 2004, 2003 and 2002

(Dollars in thousands)


NOTE A  Summary of Significant Accounting
Policies

Consolidation: The consolidated financial statements
include the accounts of the Company and all of its subsidiaries.
All significant intercompany accounts and transactions have been
eliminated upon consolidation.

Accounting Estimates: The preparation of financial
statements in conformity with accounting principles generally
accepted in the United States requires management to make
estimates and assumptions that affect the reported amounts of
assets and liabilities and disclosure of contingent assets and
liabilities at the date of the financial statements and the
reported amounts of revenues and expenses during the reporting
period. Actual results could differ from those estimates.

Cash Equivalents: The Company considers all highly liquid
investments with a maturity of three months or less when
purchased to be cash equivalents.

Inventories: Inventories are stated at the lower of
first-in, first-out (FIFO) cost or market value (See
Note B). Inventory reserves were $18,500 and $18,817 at
December 31, 2004 and 2003, respectively.

Major Classes of Inventories

|                              |  |              |         |      |  |   |         | 
|----------------------------- |  | ------------ | ------- | ---- |  | - | ------- | 
|                              |  |             
|                              |  | December 31,
|                              |  |             
|                              |  | 2004         |         | 2003
|                              |  |              |         |     
|In-process and finished goods |  | $            | 151,759 |      |  | $ | 121,154 | 
|                             
|                             
|                             
|                             
|Raw materials and supplies    |  |              | 25,535  |      |  |   | 27,921  | 
|                              |  |              |         |      |  |   |         | 
|                              |  | $            | 177,294 |      |  | $ | 149,075 | 
|                              |  |              |         |      |  |   |         | 

Property, Plant and Equipment: Property, plant and
equipment are carried at cost. Major additions and associated
interest costs are capitalized and betterments are charged to
accumulated depreciation; expenditures for repairs and
maintenance are charged to operations. Depreciation of fixed
assets is computed principally by the straight-line method based
on the estimated useful lives of the assets ranging from
25-60 years for buildings, and 3-16 years for
machinery and equipment. The Company reviews long-lived assets
for impairment when events or changes in business conditions
indicate that their full carrying value may not be recoverable
(See Note N).

Goodwill: As discussed in Note C, the Company
adopted Statement of Financial Accounting Standards No. 142
(FAS 142), Goodwill and Other Intangible
Assets, as of January 1, 2002. Under FAS 142,
goodwill is no longer amortized but is subject to impairment
testing at least annually on October 1. Prior to 2002,
goodwill was amortized primarily over 40 years using the
straight-line method.

Pensions and Other Postretirement Benefits: The Company
and its subsidiaries have pension plans, principally
noncontributory defined benefit or noncontributory defined
contribution plans, covering substantially all employees. In
addition, the Company has two unfunded postretirement benefit
plans. For the defined benefit plans, benefits are based on the
employees years of service and the Companys policy
is to fund that amount recommended by its independent actuaries.
For the defined contribution plans, the costs charged to
operations and the amount funded are based upon a percentage of
the covered employees compensation.

Income Taxes: The Company accounts for income taxes under
the liability method, whereby deferred tax assets and
liabilities are determined based on temporary differences
between the financial reporting and the tax bases of assets and
liabilities and are measured using the current enacted tax
rates. In determining these amounts, management determined the
probability of realizing deferred tax

23



---



##### 



PARK-OHIO INDUSTRIES, INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  Continued

assets, taking into consideration factors including historical
operating results, expectations of future earnings and taxable
income and the extended period of time over which the
postretirement benefits will be paid and accordingly records
valuation allowances when necessary (See Note H).

Revenue Recognition: The Company recognizes revenue,
other than from long-term contracts, when title is transferred
to the customer, typically upon shipment. Revenue from long-term
contracts (less than 7% of consolidated revenue) is accounted
for under the percentage of completion method, and recognized on
the basis of the percentage each contracts cost to date
bears to the total estimated contract cost. Revenue earned on
contracts in process in excess of billings is classified in
other current assets in the accompanying consolidated balance
sheet. The Companys revenue recognition policies are in
accordance with the SECs Staff Accounting Bulletin
(SAB) No. 101, Revenue Recognition.

Accounts Receivable: Accounts receivable are recorded at
selling price which is fixed based on a purchase order or
contractual arrangement. Accounts receivable are reduced by an
allowance for amounts that may become uncollectible in the
future. The Companys policy is to identify and reserve for
specific collectibility concerns based on customers
financial condition and payment history.

Concentration of Credit Risk: The Company sells its
products to customers in diversified industries. The Company
performs ongoing credit evaluations of its customers
financial condition but does not require collateral to support
customer receivables. The Company establishes an allowance for
doubtful accounts based upon factors surrounding the credit risk
of specific customers, historical trends and other information.
Write-offs of accounts receivable have historically been low. As
of December 31, 2004, the Company had uncollateralized
receivables with six customers in the automotive and heavy-duty
truck industries, each with several locations, aggregating
$44,522, which represented approximately 31% of the
Companys trade accounts receivable. During 2004, sales to
these customers amounted to approximately $240,787, which
represented approximately 30% of the Companys net sales.

Shipping and Handling Costs: All shipping and handling
costs are included in cost of products sold in the Consolidated
Statements of Operations.

Environmental: The Company accrues environmental costs
related to existing conditions resulting from past or current
operations and from which no current or future benefit is
discernible. Costs that extend the life of the related property
or mitigate or prevent future environmental contamination are
capitalized. The Company records a liability when environmental
assessments and/or remedial efforts are probable and can be
reasonably estimated. The estimated liability of the Company is
not discounted or reduced for possible recoveries from insurance
carriers.

Foreign Currency Translation: The functional currency for
all subsidiaries outside the United States is the local
currency. Financial statements for these subsidiaries are
translated into United States dollars at year-end exchange rates
as to assets and liabilities and weighted-average exchange rates
as to revenues and expenses. The resulting translation
adjustments are recorded in shareholders equity.

Impact of Other Recently Issued Accounting
Pronouncements: In January 2003, the FASB issued
Interpretation No. 46 (FIN 46),
Consolidation of Variable Interest Entities, which
clarifies the application of Accounting Research Bulletin
(ARB) No. 51, Consolidated Financial
Statements, relating to consolidation of certain entities.
First, FIN 46 will require identification of the
Companys participation in variable interest entities
(VIEs), which are defined as entities with a level
of invested equity that is not sufficient to fund future
activities to permit them to operate on a stand alone basis, or
whose equity holders lack certain characteristics of a
controlling financial interest. Then, for entities identified as
VIEs, FIN 46 sets forth a model to evaluate potential
consolidation based on an assessment of which party to the VIE,
if any, bears a majority of the exposure to its expected losses,
or stands to gain from a majority of its expected returns.
FIN 46 also sets forth certain disclosures regarding

24



---



##### 



PARK-OHIO INDUSTRIES, INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  Continued

interests in VIEs that are deemed significant, even if
consolidation is not required. The Companys adoption of
FIN 46 had no effect on its financial position, results of
operations and cash flows.

In April 2003, the FASB issued Statement of Financial
Accounting Standards No. 149, Amendment of
Statement 133 on Derivative Instruments and Hedging
Activities (FAS 149). FAS 149 amends and
clarifies the accounting for derivative instruments, including
certain derivative instruments embedded in other contracts, and
for hedging activities under FAS 133, Accounting for
Derivative Instruments and Hedging Activities.
FAS 149 is generally effective for contracts entered into
or modified after June 30, 2003 and for hedging
relationships designated after June 30, 2003. The
Companys adoption of FAS 149 had no effect on its
financial position, results of operations and cash flows.

In May 2003, the FASB issued Statement of Financial
Accounting Standards No. 150, Accounting for Certain
Financial Instruments with Characteristics of both Liabilities
and Equity (FAS 150). FAS 150 requires
that certain financial instruments, which under previous
guidance were accounted for as equity, must now be accounted for
as liabilities. The financial instruments affected include
mandatorily redeemable stock, certain financial instruments that
require or may require the issuer to buy back some of its shares
in exchange for cash or other assets and certain obligations
that can be settled with shares of stock. FAS 150 is
effective for all financial instruments entered into or modified
after May 31, 2003 and must be applied to the
Companys existing financial instruments effective
July 1, 2003, the beginning of the first fiscal period
after June 15, 2003. The Company adopted FAS 150 on
June 1, 2003. The adoption of this statement had no effect
on the Companys financial position, results of operations
or cash flows.

In December 2003, the Medicare Prescription Drug,
Improvement and Modernization Act of 2003 (the Medicare
Act) was enacted in the United States. The Medicare Act,
among other things, expanded existing Medicare healthcare
benefits to include an outpatient prescription drug benefit to
Medicare eligible residents of the
U.S. (Part D) beginning in 2006.
Prescription drug coverage will be available to eligible
individuals who voluntarily enroll under a Part D plan. As
an alternative, employers may provide drug coverage at least
actuarially equivalent to standard coverage and
receive a tax-free federal subsidy equal to 28% of a portion of
a Medicare beneficiarys drug costs. However, if covered
retirees enroll in a Part D plan, the employer would not
receive the subsidy.

The FASB has issued Staff Position (FSP)
FAS No. 106-2, Accounting and Disclosure
Requirements Related to the Medicare Prescription Drug,
Improvement and Modernization Act of 2003, to provide
guidance on accounting for effects of this healthcare benefit
legislation. The FSP treats the effect of the employer subsidy
on the accumulated postretirement benefit obligation
(APBO) as an actuarial gain. The effect of the
subsidy would also be reflected in the estimate of service cost
in measuring the cost of benefits attributable to current
service. The effects of plan amendments adopted subsequent to
the adoption of the Medicare Act to qualify plans as actuarially
equivalent would be treated as actuarial gains if the net effect
of the amendments reduces the APBO. The net effect on the APBO
of any plan amendments that (a) reduce benefits under the
plan and thus disqualify the benefits as actuarially equivalent
and (b) eliminate the subsidy would be accounted for as
prior service cost.

The Company has completed its assessment of the provisions of
the Medicare Act on its postretirement healthcare plans. The
effect of the Medicare Act is a reduction to the APBO of $2,350.
The effect of the Medicare Act reduced the net periodic
postretirement benefit cost by $310 in 2004.

In the fourth quarter of 2004, the FASB issued Statement of
Financial Accounting Standards No. 151, Inventory
Costs (FAS 151), an amendment of
Accounting Research Bulletin No. 43, Chapter 4.
The amendments made by FAS No. 151 clarify that abnormal
amounts of idle facility expense, freight, handling costs and
wasted materials (spoilage) are to be recognized as
current-period charges and will require the allocation of fixed
production overheads to inventory based on the normal capacity

25



---



##### 



PARK-OHIO INDUSTRIES, INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  Continued

of the production facilities. The guidance is effective for
inventory costs incurred during fiscal years beginning after
June 15, 2005. Earlier application is permitted for
inventory costs incurred during fiscal years beginning after
November 23, 2004. The Company expects the adoption of
FAS 151 to have little impact on its consolidated financial
position, results of operations, or cash flows.

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

Reclassification: Certain amounts in the prior
years financial statements have been reclassified to
conform to the current year presentation.

NOTE B  Accounting Change

Effective June 30, 2003, the Company changed the method of
accounting for the 15% of its inventories utilizing the LIFO
method to the FIFO method. The Company believes that this change
is preferable for the following reasons: 1) the change
conforms all of its inventories to one method of determining
cost, which is the FIFO method; 2) the costs of the
Companys inventories have remained fairly level during the
past several years, which has substantially negated the benefits
of the LIFO method (a better matching of current costs with
current revenue in periods of rising costs); 3) the impact
of utilizing the LIFO method has had an insignificant impact on
the Companys consolidated net income (loss) during the
past several years; and 4) the FIFO method results in the
valuation of inventories at current costs on the consolidated
balance sheet, which provides a more meaningful presentation for
investors and financial institutions.

As required under accounting principles generally accepted in
the United States, the Company has restated the consolidated
balance sheet as of December 31, 2002 to increase
inventories by the recorded LIFO reserve $4,400, increase
deferred tax liabilities ($1,700), and increase
shareholders equity $2,700. Previously reported results of
operations have not been restated because the impact of
utilizing the LIFO method had an insignificant impact on the
Companys reported amounts for consolidated net income
(loss).

NOTE C  Adoption of FAS 142, Goodwill
and Other Intangible Assets

Effective January 1, 2002, the Company adopted
FAS 142, Goodwill and Other Intangible Assets.
Under this standard, goodwill is no longer amortized, but is
subject to an impairment test at least annually. The Company has
selected October 1 as its annual testing date. In the year
of adoption, FAS 142 also requires the Company to perform a
transitional test to determine whether goodwill was impaired as
of the beginning of the year. Under FAS 142, the initial
step in testing for goodwill impairment is to compare the fair
value of each reporting unit to its book value. To the extent
the fair value of any reporting unit is less than its book
value, which would indicate that potential impairment of
goodwill exists, a second test is required to determine the
amount of impairment.

The Company, with assistance of an outside consultant, completed
the transitional impairment review of goodwill using a
discounted cash flow approach to determine the fair value of
each reporting unit. Based upon the results of these
calculations, the Company recorded a non-cash charge for

26



---



##### 



PARK-OHIO INDUSTRIES, INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  Continued

goodwill impairment which aggregated $48,799. In accordance with
the provisions of FAS 142, the charge has been accounted
for as a cumulative effect of a change in accounting principle,
effective January 1, 2002. The Company also completed the
annual impairment tests as of October 1, 2004, 2003 and
2002, and has determined that no additional impairment of
goodwill existed as of those dates.

The following table summarizes the transitional goodwill
impairment charge by reporting segment as well as the carrying
amount of goodwill for the years ended December 31, 2003
and December 31, 2004.

|                      |  |                    |        |                   |  |                   |        |  |  |   |        | 
|--------------------- |  | ------------------ | ------ | ----------------- |  | ----------------- | ------ |  |  | - | ------ | 
|                      |  | Impairment Charge  |        |                   |  |                  
|Reporting             |  | recorded effective |        | Goodwill at       |  | Goodwill at      
|Segment               |  | January 1, 2002    |        | December 31, 2003 |  | December 31, 2004
|                      |  |                    |        |                   |  |                  
|ILS                   |  | $                  | 32,239 |                   |  | $                 | 65,763 |  |  | $ | 66,050 | 
|                     
|                     
|                     
|                     
|Aluminum Products     |  |                    | 9,700  |                   |  |                   | 16,515 |  |  |   | 16,515 | 
|                     
|                     
|                     
|                     
|Manufactured Products |  |                    | 6,860  |                   |  |                   | -0-    |  |  |   | -0-    | 
|                      |  |                    |        |                   |  |                   |        |  |  |   |        | 
|                      |  | $                  | 48,799 |                   |  | $                 | 82,278 |  |  | $ | 82,565 | 
|                      |  |                    |        |                   |  |                   |        |  |  |   |        | 

The increase in the goodwill in the ILS segment during 2003 and
2004 results from foreign currency fluctuations.

NOTE D  Acquisitions

On August 23, 2004, the Company acquired substantially all
of the assets of the Automotive Components Group (Amcast
Components Group) of Amcast Industrial Corporation. The
purchase price was approximately $10,000 in cash and the
assumption of approximately $9,000 of operating liabilities. The
acquisition was funded with borrowings under the Companys
revolving credit facility. The purchase price and the results of
operations of Amcast Components Group prior to its date of
acquisition were not deemed significant as defined in
Regulation S-X. The results of operations for Amcast
Components Group have been included since August 23, 2004.

The tentative allocation of the purchase price has been
performed based on the assignment of fair values to assets
acquired and liabilities assumed. Final fair values will be
based primarily on appraisals from an independent appraisal firm.

The tentative allocation of the purchase price is as follows:

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

The Company has a plan for integration activities and plant
rationalization. In accordance with FASB EITF Issue
No. 95-3, Recognition of Liabilities in Connection
with a Purchase Business Combina-

27



---



##### 



PARK-OHIO INDUSTRIES, INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  Continued

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

|                             |  |           |       |      |  |            |     |       |  |   |     |  |  |   |       | 
|---------------------------- |  | --------- | ----- | ---- |  | ---------- | --- | ----- |  | - | --- |  |  | - | ----- | 
|                             |  | Severance |       | Exit |  | Relocation |     | Total
|                             |  |           |       |      |  |            |     |      
|Balance at June 30, 2004     |  | $         | -0-   |      |  | $          | -0- |       |  | $ | -0- |  |  | $ | -0-   | 
|                            
|                            
|                            
|                            
|Add: Accruals                |  |           | 1,916 |      |  |            | 100 |       |  |   | 265 |  |  |   | 2,281 | 
|                            
|                            
|                            
|                            
|Less: Payments               |  |           | 295   |      |  |            | -0- |       |  |   | 2   |  |  |   | 297   | 
|                             |  |           |       |      |  |            |     |       |  |   |     |  |  |   |       | 
|Balance at December 31, 2004 |  | $         | 1,621 |      |  | $          | 100 |       |  | $ | 263 |  |  | $ | 1,984 | 
|                             |  |           |       |      |  |            |     |       |  |   |     |  |  |   |       | 

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

NOTE E  Other Assets

Other assets consists of the following:

|                           |        |              |        |        |  |   |        |        | 
|-------------------------- | ------ | ------------ | ------ | ------ |  | - | ------ | ------ | 
|                           |        |             
|                           |        | December 31,
|                           |        |             
|                           |        | 2004         |        | 2003  
|                           |        |              |        |       
|Pension assets             |        | $            | 41,295 |        |  | $ | 36,186 |       
|                          
|                          
|                          
|                          
|Idle assets                |        |              | 6,040  |        |  |   | 6,516  |       
|                          
|                          
|                          
|                          
|Deferred financing costs   |        |              | 7,846  |        |  |   | 5,774  |       
|                          
|                          
|                          
|                          
|Tooling                    |        |              | 3,570  |        |  |   | 4,222  |       
|                          
|                          
|                          
|                          
|Software development costs |        |              | 3,390  |        |  |   | 3,947  |       
|                          
|                          
|                          
|                          
|Other                      |        |              | 6,394  |        |  |   | 4,665  |       
|                           |        |              |        |        |  |   |        |       
|                           | Totals |              | $      | 68,535 |  |   | $      | 61,310 | 
|                           |        |              |        |        |  |   |        |       

NOTE F  Accrued Expenses

Accrued expenses include the following:

|                                            |        |              |        |        |  |   |        |        | 
|------------------------------------------- | ------ | ------------ | ------ | ------ |  | - | ------ | ------ | 
|                                            |        |             
|                                            |        | December 31,
|                                            |        |             
|                                            |        | 2004         |        | 2003  
|                                            |        |              |        |       
|Accrued salaries, wages and benefits        |        | $            | 14,098 |        |  | $ | 9,484  |       
|                                           
|                                           
|                                           
|                                           
|Advance billings                            |        |              | 10,059 |        |  |   | 8,496  |       
|                                           
|                                           
|                                           
|                                           
|Warranty, project and installation accruals |        |              | 5,660  |        |  |   | 6,762  |       
|                                           
|                                           
|                                           
|                                           
|Severance and exit costs                    |        |              | 2,175  |        |  |   | 2,535  |       
|                                           
|                                           
|                                           
|                                           
|Interest payable                            |        |              | 2,022  |        |  |   | 2,055  |       
|                                           
|                                           
|                                           
|                                           
|State and local taxes                       |        |              | 4,553  |        |  |   | 3,809  |       
|                                           
|                                           
|                                           
|                                           
|Sundry                                      |        |              | 21,178 |        |  |   | 13,243 |       
|                                            |        |              |        |        |  |   |        |       
|                                            | Totals |              | $      | 59,745 |  |   | $      | 46,384 | 
|                                            |        |              |        |        |  |   |        |       

Substantially all advance billings and warranty, project and
installation accruals relate to the Companys capital
equipment businesses.

28



---



##### 



PARK-OHIO INDUSTRIES, INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  Continued

The changes in the aggregate product warranty liability are as
follows for the year ended December 31, 2004 and 2003:

|                                         |  |              |        |      |  |   |        |  
|---------------------------------------- |  | ------------ | ------ | ---- |  | - | ------ | -
|                                         |  |             
|                                         |  | December 31,
|                                         |  |             
|                                         |  | 2004         |        | 2003
|                                         |  |              |        |     
|Balance at beginning of year             |  | $            | 5,614  |      |  | $ | 6,506  |  
|                                        
|                                        
|                                        
|                                        
|Claims paid during the year              |  |              | (4,708 | )    |  |   | (2,399 | )
|                                        
|                                        
|                                        
|                                        
|Additional warranties issued during year |  |              | 2,874  |      |  |   | 1,139  |  
|                                        
|                                        
|                                        
|                                        
|Acquired warranty liabilities            |  |              | 501    |      |  |   | -0-    |  
|                                        
|                                        
|                                        
|                                        
|Other                                    |  |              | -0-    |      |  |   | 368    |  
|                                         |  |              |        |      |  |   |        |  
|Balance at end of year                   |  | $            | 4,281  |      |  | $ | 5,614  |  
|                                         |  |              |        |      |  |   |        |  

The acquired warranty liability during 2004 reflects the
warranty liability of Jamco, which was acquired in April 2004.

NOTE G  Financing Arrangements

Long-term debt consists of the following:

|                                                                                                |       |              |         |         |  |   |         |         | 
|----------------------------------------------------------------------------------------------- | ----- | ------------ | ------- | ------- |  | - | ------- | ------- | 
|                                                                                                |       |             
|                                                                                                |       | December 31,
|                                                                                                |       |             
|                                                                                                |       | 2004         |         | 2003   
|                                                                                                |       |              |         |        
|8.375% Senior Subordinated Notes due 2014                                                       |       | $            | 210,000 |         |  | $ | -0-     |        
|                                                                                               
|                                                                                               
|                                                                                               
|                                                                                               
|9.25% Senior Subordinated Notes due 2007                                                        |       |              | -0-     |         |  |   | 199,930 |        
|                                                                                               
|                                                                                               
|                                                                                               
|                                                                                               
|Revolving credit maturing on December 31,
    2010                                              |       |              | 120,600 |         |  |   | 101,000 |        
|                                                                                               
|                                                                                               
|                                                                                               
|                                                                                               
|Industrial Development Revenue Bonds maturing in
    2012 at interest rates from 2.00% to 4.15% |       |              | 4,041   |         |  |   | 4,478   |        
|                                                                                               
|                                                                                               
|                                                                                               
|                                                                                               
|Other                                                                                           |       |              | 3,666   |         |  |   | 4,817   |        
|                                                                                                |       |              |         |         |  |   |         |        
|                                                                                                |       |              | 338,307 |         |  |   | 310,225 |        
|                                                                                               
|                                                                                               
|                                                                                               
|                                                                                               
|Less current maturities                                                                         |       |              | 2,931   |         |  |   | 1,061   |        
|                                                                                                |       |              |         |         |  |   |         |        
|                                                                                                | Total |              | $       | 335,376 |  |   | $       | 309,164 | 
|                                                                                                |       |              |         |         |  |   |         |        

Maturities of long-term debt during each of the five years
following December 31, 2004 are approximately $2,931 in
2005, $821 in 2006, $836 in 2007, $674 in 2008 and $689 in 2009.

In November 2004, the Company issued $210,000 of
8.375% Senior Subordinated Notes due November 15, 2014
(8.375% Notes). The net proceeds from this debt
issuance were approximately $205,178 net of underwriting and
other debt offering fees. Proceeds from the 8.375% Notes
were used to fund the tender and early redemption of the
Companys 9.25% Senior Subordinated Notes due 2007.
The Company incurred debt extinguishment costs related primarily
to premiums and other transaction costs associated with the
tender and early redemption and wrote off deferred financing
costs associated with the 9.25% Senior Subordinated Notes
totaling $5,963 or $.53 per share on a diluted basis.

The Company is a party to a credit and security agreement dated
November  5, 2003, as amended (Credit
Agreement), with a group of banks, under which it may
borrow or issue standby letters of credit or commercial letters
of credit up to $200,000. During 2004, the Credit Agreement was
amended to extend the maturity to December 31, 2010 and increase
the credit line from $165,000 at December 31, 2003 to $200,000
at December 31, 2004. The amended credit agreement provides
lower interest rate brackets and modified certain covenants to
provide greater flexibility. The Credit Agreement currently
contains a detailed borrowing base formula that provides
borrowing capacity to the Company based on

29



---



##### 



PARK-OHIO INDUSTRIES, INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  Continued

negotiated percentages of eligible accounts receivable,
inventory and fixed assets. At December 31, 2004, the
Company had approximately $53,941 of unused borrowing capacity
available under the Credit Agreement. Interest is payable
quarterly at either the banks prime lending rate (5.25% at
December 31, 2004) or, at the Companys election, at
LIBOR plus .75%-2.25%. The Companys ability to elect
LIBOR-based interest as well as the overall interest rate are
dependent on the Companys Debt Service Coverage Ratio, as
defined in the Credit Agreement. Up to $20,000 in standby
letters of credit and commercial letters of credit may be issued
under the Credit Agreement. As of December 31, 2004, in
addition to amounts borrowed under the Credit Agreement, there
was $9,133 outstanding primarily for standby letters of credit.
A fee of .25% is imposed by the bank on the unused portion of
available borrowings. The Credit Agreement expires on
December 31, 2010 and borrowings are secured by
substantially all of the Companys assets.

A foreign subsidiary of the Company had outstanding standby
letters of credit of $1,485 at December 31, 2004 under its
credit arrangement.

The 8.375% Notes are general unsecured senior obligations of the
Company and are fully and unconditionally guaranteed on a joint
and several basis, by all domestic subsidiaries of the Company.
Provisions of the indenture governing the 8.375% Notes and the
Credit Agreement contain restrictions on the Companys
ability to incur additional indebtedness, to create liens or
other encumbrances, to make certain payments, investments, loans
and guarantees and to sell or otherwise dispose of a substantial
portion of assets or to merge or consolidate with an
unaffiliated entity. At December 31, 2004, the Company was
in compliance with all financial covenants of the Credit
Agreement.

The weighted average interest rate on all debt was 6.84% at
December 31, 2004.

The carrying value of cash and cash equivalents, accounts
receivable, accounts payable, borrowings under the credit
agreement and the senior subordinated notes approximate fair
value at December 31, 2004 and 2003.

NOTE H  Income Taxes

Income taxes consisted of the following:

|                              |         |                         |       |       |   |      |     |     |  |   |        |        |  
|----------------------------- | ------- | ----------------------- | ----- | ----- | - | ---- | --- | --- |  | - | ------ | ------ | -
|                              |         |                        
|                              |         | Year Ended December 31,
|                              |         |                        
|                              |         | 2004                    |       | 2003  |   | 2002
|                              |         |                         |       |       |   |     
|Current payable (refundable): |         |                         |       |       |   |      |     |     |  |   |        |       
|                             
|                             
|                             
|                             
|                              | Federal |                         | $     | (426  | ) |      | $   | -0- |  |   | $      | (2,210 | )
|                             
|                             
|                             
|                             
|                              | State   |                         |       | 23    |   |      |     | 16  |  |   |        | 387    |  
|                             
|                             
|                             
|                             
|                              | Foreign |                         |       | 3,245 |   |      |     | 888 |  |   |        | 769    |  
|                              |         |                         |       |       |   |      |     |     |  |   |        |       
|                              |         |                         | 2,842 |       |   |      | 904 |     |  |   | (1,054 | )     
|                             
|                             
|                             
|                             
|Deferred:                     |         |                         |       |       |   |      |     |     |  |   |        |       
|                             
|                             
|                             
|                             
|                              | Federal |                         |       | -0-   |   |      |     | -0- |  |   |        | 1,951  |  
|                             
|                             
|                             
|                             
|                              | State   |                         |       | -0-   |   |      |     | -0- |  |   |        | -0-    |  
|                             
|                             
|                             
|                             
|                              | Foreign |                         |       | 558   |   |      |     | -0- |  |   |        | -0-    |  
|                              |         |                         |       |       |   |      |     |     |  |   |        |       
|                              |         |                         | 558   |       |   |      | -0- |     |  |   | 1,951  |       
|                              |         |                         |       |       |   |      |     |     |  |   |        |       
|Income taxes                  |         | $                       | 3,400 |       |   | $    | 904 |     |  | $ | 897    |       
|                              |         |                         |       |       |   |      |     |     |  |   |        |       

30



---



##### 



PARK-OHIO INDUSTRIES, INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  Continued

The reasons for the difference between income tax expense and
the amount computed by applying the statutory Federal income tax
rate to income before income taxes are as follows:

|                             |  |                         |        |      |  |      |        |   |  |   |        |  
|---------------------------- |  | ----------------------- | ------ | ---- |  | ---- | ------ | - |  | - | ------ | -
|                             |  |                        
|                             |  | Year Ended December 31,
|                             |  |                        
|                             |  | 2004                    |        | 2003 |  | 2002
|                             |  |                         |        |      |  |     
|Computed statutory amount    |  | $                       | 5,984  |      |  | $    | (3,712 | ) |  | $ | (3,895 | )
|                            
|                            
|                            
|                            
|Effect of state income taxes |  |                         | 16     |      |  |      | 11     |   |  |   | 411    |  
|                            
|                            
|                            
|                            
|Foreign rate differences     |  |                         | 661    |      |  |      | 815    |   |  |   | 599    |  
|                            
|                            
|                            
|                            
|Valuation allowance          |  |                         | (3,042 | )    |  |      | 3,695  |   |  |   | 3,475  |  
|                            
|                            
|                            
|                            
|Other, net                   |  |                         | (219   | )    |  |      | 95     |   |  |   | 307    |  
|                             |  |                         |        |      |  |      |        |   |  |   |        |  
|Income taxes (benefit)       |  | $                       | 3,400  |      |  | $    | 904    |   |  | $ | 897    |  
|                             |  |                         |        |      |  |      |        |   |  |   |        |  

Significant components of the Companys net deferred tax
assets and liabilities are as follows:

|                           |                                                 |                                |         |        |        |   |         |        |        | 
|-------------------------- | ----------------------------------------------- | ------------------------------ | ------- | ------ | ------ | - | ------- | ------ | ------ | 
|                           |                                                 |                               
|                           |                                                 | December 31,                  
|                           |                                                 |                               
|                           |                                                 | 2004                           |         | 2003  
|                           |                                                 |                                |         |       
|Deferred tax assets:       |                                                 |                                |         |        |        |   |         |       
|                          
|                          
|                          
|                          
|                           | Postretirement benefit obligation               |                                | $       | 7,933  |        |   | $       | 7,600  |       
|                          
|                          
|                          
|                          
|                           | Inventory                                       |                                |         | 11,277 |        |   |         | 8,400  |       
|                          
|                          
|                          
|                          
|                           | Net operating loss and tax credit carryforwards |                                |         | 20,384 |        |   |         | 14,300 |       
|                          
|                          
|                          
|                          
|                           | Othernet                                       |                                |         | 11,867 |        |   |         | 15,200 |       
|                           |                                                 |                                |         |        |        |   |         |       
|                           |                                                 | Total deferred tax assets      |         |        | 51,461 |   |         |        | 45,500 | 
|                          
|                          
|                          
|                          
|Deferred tax liabilities:  |                                                 |                                |         |        |        |   |         |       
|                          
|                          
|                          
|                          
|                           | Tax over book depreciation                      |                                |         | 15,492 |        |   |         | 13,900 |       
|                          
|                          
|                          
|                          
|                           | Pension                                         |                                |         | 16,725 |        |   |         | 11,400 |       
|                          
|                          
|                          
|                          
|                           | Deductible goodwill                             |                                |         | 1,087  |        |   |         | -0-    |       
|                           |                                                 |                                |         |        |        |   |         |       
|                           |                                                 | Total deferred tax liabilities |         |        | 33,304 |   |         |        | 25,300 | 
|                           |                                                 |                                |         |        |        |   |         |       
|                           |                                                 |                                | 18,157  |        |        |   | 20,200  |       
|                          
|                          
|                          
|                          
|Valuation reserves         |                                                 |                                | (19,231 | )      |        |   | (20,200 | )     
|                           |                                                 |                                |         |        |        |   |         |       
|Net deferred tax liability |                                                 | $                              | (1,074  | )      |        | $ | -0-     |       
|                           |                                                 |                                |         |        |        |   |         |       

At December 31, 2004, the Company has net operating loss
carryforwards for income tax purposes of approximately $47,700,
which will expire between 2021 and 2024. In accordance with the
provisions of FAS 109 Accounting for Income
Taxes, the tax benefits related to these carryforwards
have been fully reserved as of December 31, 2004 because
the Company is in a three year cumulative loss position.

At December 31, 2004 the Company has research and developmental
credit carryforwards of approximately $1,691 which will expire
between 2010 and 2023. The Company also has an alternative
minimum tax credit carryforward in the amount of approximately
$1,020 which has an indefinite carryforward life.

NOTE I  Legal Proceedings

The Company is 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

31



---



##### 



PARK-OHIO INDUSTRIES, INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  Continued

threatened litigation will not have a material adverse effect on
the Companys financial condition, liquidity and results of
operations.

NOTE J  Pensions and Postretirement Benefits

The following tables set forth the change in benefit obligation,
plan assets, funded status and amounts recognized in the
consolidated balance sheet for the defined benefit pension and
postretirement benefit plans as of December 31, 2004 and
2003:

|                                                 |  |         |         |                |  |      |        |      |  |   |         |   |  |   |         |  
|------------------------------------------------ |  | ------- | ------- | -------------- |  | ---- | ------ | ---- |  | - | ------- | - |  | - | ------- | -
|                                                 |  |         |         |                |  |     
|                                                 |  |         |         | Postretirement
|                                                 |  | Pension |         | Benefits      
|                                                 |  |         |         |               
|                                                 |  | 2004    |         | 2003           |  | 2004 |        | 2003
|                                                 |  |         |         |                |  |      |        |     
|Change in benefit obligation                     |  |         |         |                |  |      |        |      |  |   |         |   |  |   |         |  
|                                                
|                                                
|                                                
|                                                
|Benefit obligation at beginning of year          |  | $       | 53,075  |                |  | $    | 52,481 |      |  | $ | 27,366  |   |  | $ | 24,869  |  
|                                                
|                                                
|                                                
|                                                
|Service cost                                     |  |         | 291     |                |  |      | 545    |      |  |   | 136     |   |  |   | 147     |  
|                                                
|                                                
|                                                
|                                                
|Curtailment and settlement                       |  |         | -0-     |                |  |      | (208   | )    |  |   | -0-     |   |  |   | -0-     |  
|                                                
|                                                
|                                                
|                                                
|Interest cost                                    |  |         | 3,320   |                |  |      | 3,498  |      |  |   | 1,532   |   |  |   | 1,701   |  
|                                                
|                                                
|                                                
|                                                
|Amendments                                       |  |         | 566     |                |  |      | -0-    |      |  |   | -0-     |   |  |   | -0-     |  
|                                                
|                                                
|                                                
|                                                
|Actuarial losses (gains)                         |  |         | 2,799   |                |  |      | 1,800  |      |  |   | (637    | ) |  |   | 3,758   |  
|                                                
|                                                
|                                                
|                                                
|Benefits and expenses paid, net of contributions |  |         | (4,748  | )              |  |      | (5,041 | )    |  |   | (3,717  | ) |  |   | (3,109  | )
|                                                 |  |         |         |                |  |      |        |      |  |   |         |   |  |   |         |  
|Benefit obligation at end of year                |  | $       | 55,303  |                |  | $    | 53,075 |      |  | $ | 24,680  |   |  | $ | 27,366  |  
|                                                 |  |         |         |                |  |      |        |      |  |   |         |   |  |   |         |  
|Change in plan assets                            |  |         |         |                |  |      |        |      |  |   |         |   |  |   |         |  
|                                                
|                                                
|                                                
|                                                
|Fair value of plan assets at beginning of year   |  | $       | 97,603  |                |  | $    | 85,401 |      |  | $ | -0-     |   |  | $ | -0-     |  
|                                                
|                                                
|                                                
|                                                
|Actual return on plan assets                     |  |         | 11,093  |                |  |      | 17,243 |      |  |   | -0-     |   |  |   | -0-     |  
|                                                
|                                                
|                                                
|                                                
|Company contributions                            |  |         | -0-     |                |  |      | -0-    |      |  |   | 3,717   |   |  |   | 3,109   |  
|                                                
|                                                
|                                                
|                                                
|Benefits and expenses paid, net of contributions |  |         | (4,748  | )              |  |      | (5,041 | )    |  |   | (3,717  | ) |  |   | (3,109  | )
|                                                 |  |         |         |                |  |      |        |      |  |   |         |   |  |   |         |  
|Fair value of plan assets at end of year         |  | $       | 103,948 |                |  | $    | 97,603 |      |  | $ | -0-     |   |  | $ | -0-     |  
|                                                 |  |         |         |                |  |      |        |      |  |   |         |   |  |   |         |  
|Funded (underfunded) status of the plan          |  | $       | 48,645  |                |  | $    | 44,528 |      |  | $ | (24,680 | ) |  | $ | (27,366 | )
|                                                
|                                                
|                                                
|                                                
|Unrecognized net transition obligation           |  |         | (439    | )              |  |      | (487   | )    |  |   | -0-     |   |  |   | -0-     |  
|                                                
|                                                
|                                                
|                                                
|Unrecognized net actuarial (gain) loss           |  |         | (6,929  | )              |  |      | (7,235 | )    |  |   | 4,639   |   |  |   | 5,375   |  
|                                                
|                                                
|                                                
|                                                
|Unrecognized prior service cost (benefit)        |  |         | 1,210   |                |  |      | 773    |      |  |   | (247    | ) |  |   | (327    | )
|                                                 |  |         |         |                |  |      |        |      |  |   |         |   |  |   |         |  
|Net amount recognized at year end                |  | $       | 42,487  |                |  | $    | 37,579 |      |  | $ | (20,288 | ) |  | $ | (22,318 | )
|                                                 |  |         |         |                |  |      |        |      |  |   |         |   |  |   |         |  

Amounts recognized in the consolidated balance sheets consists
of:

|                                     |                                          |      |        |        |  |   |        |        | 
|------------------------------------ | ---------------------------------------- | ---- | ------ | ------ |  | - | ------ | ------ | 
|                                     |                                          | 2004 |        | 2003  
|                                     |                                          |      |        |       
|Prepaid pension cost                 |                                          | $    | 41,295 |        |  | $ | 36,186 |       
|                                    
|                                    
|                                    
|                                    
|Accrued pension cost                 |                                          |      | (4,211 | )      |  |   | (2,962 | )     
|                                    
|                                    
|                                    
|                                    
|Intangible asset                     |                                          |      | 565    |        |  |   | -0-    |       
|                                    
|                                    
|                                    
|                                    
|Accumulated other comprehensive loss |                                          |      | 4,838  |        |  |   | 4,355  |       
|                                     |                                          |      |        |        |  |   |        |       
|                                     | Net amount recognized at the end of year |      | $      | 42,487 |  |   | $      | 37,579 | 
|                                     |                                          |      |        |        |  |   |        |       

32



---



##### 



PARK-OHIO INDUSTRIES, INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  Continued

The pension plan weighted-average asset allocation at year ended
2004 and 2003 and target allocation for 2004 are as follows:

|                  |  |             |       |             |  |      |      |   |  |  |      |  
|----------------- |  | ----------- | ----- | ----------- |  | ---- | ---- | - |  |  | ---- | -
|                  |  |             |       |            
|                  |  |             |       | Plan Assets
|                  |  |             |       |            
|                  |  | Target 2005 |       | 2004        |  | 2003
|                  |  |             |       |             |  |     
|Asset Category    |  |             |       |             |  |      |      |   |  |  |      |  
|                 
|                 
|                 
|                 
|Equity securities |  |             | 60-70 | %           |  |      | 66.7 | % |  |  | 64.8 | %
|                 
|                 
|                 
|                 
|Debt securities   |  |             | 20-30 |             |  |      | 20.5 |   |  |  | 26.0 |  
|                 
|                 
|                 
|                 
|Other             |  |             | 7-15  |             |  |      | 12.8 |   |  |  | 9.2  |  
|                  |  |             |       |             |  |      |      |   |  |  |      |  
|                  |  |             | 100   | %           |  |      | 100  | % |  |  | 100  | %
|                  |  |             |       |             |  |      |      |   |  |  |      |  

The Company recorded a minimum pension liability of $4,838 at
December 31, 2004 and $4,355 at December 31, 2003, as
required by Financial Accounting Standards Board Statement
No. 87. The adjustment is reflected in other comprehensive
income and long-term liabilities. The adjustment relates to two
of the Companys defined benefit plans, for which the
accumulated benefit obligations of $17,458 at December 31,
2004 ($16,336 at December 31, 2003), exceed the fair value
of the underlying pension assets of $13,247 at December 31,
2004 ($13,374 at December 31, 2003). Amounts were as
follows:

|                               |  |      |        |      |  |   |        | 
|------------------------------ |  | ---- | ------ | ---- |  | - | ------ | 
|                               |  | 2004 |        | 2003
|                               |  |      |        |     
|Projected benefit obligation   |  | $    | 17,458 |      |  | $ | 16,336 | 
|                               |  |      |        |      |  |   |        | 
|Accumulated benefit obligation |  | $    | 17,458 |      |  | $ | 16,336 | 
|                               |  |      |        |      |  |   |        | 
|Fair value of plan assets      |  | $    | 13,247 |      |  | $ | 13,374 | 
|                               |  |      |        |      |  |   |        | 

The following tables summarize the assumptions used by the
consulting actuary and the related cost information.

|                                                   |  |         |      |                |  |      |      |      |  |      |      |      |  |  |      |   |  |  |      |   |  |  |      |  
|-------------------------------------------------- |  | ------- | ---- | -------------- |  | ---- | ---- | ---- |  | ---- | ---- | ---- |  |  | ---- | - |  |  | ---- | - |  |  | ---- | -
|                                                   |  |         |      |                |  |      |      |     
|                                                   |  |         |      | Postretirement
|                                                   |  | Pension |      | Benefits      
|                                                   |  |         |      |               
|                                                   |  | 2004    |      | 2003           |  | 2002 |      | 2004 |  | 2003 |      | 2002
|                                                   |  |         |      |                |  |      |      |      |  |      |      |     
|Weighted-Average assumptions as of
    December 31 |  |         |      |                |  |      |      |      |  |      |      |      |  |  |      |   |  |  |      |   |  |  |      |  
|                                                  
|                                                  
|                                                  
|                                                  
|Discount rate                                      |  |         | 6.00 | %              |  |      | 6.50 | %    |  |      | 7.00 | %    |  |  | 6.00 | % |  |  | 6.50 | % |  |  | 7.00 | %
|                                                  
|                                                  
|                                                  
|                                                  
|Expected return on plan assets                     |  |         | 8.75 | %              |  |      | 8.75 | %    |  |      | 8.75 | %    |  |  | N/A  |   |  |  | N/A  |   |  |  | N/A  |  
|                                                  
|                                                  
|                                                  
|                                                  
|Rate of compensation increase                      |  |         | N/A  |                |  |      | 2.00 | %    |  |      | 2.00 | %    |  |  | N/A  |   |  |  | N/A  |   |  |  | N/A  |  

In determining its expected return on plan assets assumption for
the year ended December 31, 2004, the Company considered
historical experience, its asset allocation, expected future
long-term rates of return for each major asset class, and an
assumed long-term inflation rate. Based on these factors, the
Company derived an expected return on plan assets for the year
ended December 31, 2004 of 8.75%. This assumption was
supported by the asset return generation model used by the
Companys independent actuaries, which projected future
asset returns using simulation and asset class correlation.

33



---



##### 



PARK-OHIO INDUSTRIES, INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  Continued

For measurement purposes, a 10% percent annual rate of increase
in the per capita cost of covered health care benefits was
assumed for 2004. The rate was assumed to decrease gradually to
5% for 2009 and remain at that level thereafter.

|                                            |  |                  |        |                |  |      |        |      |  |      |        |      |  |   |       |   |  |   |       |   |  |   |       |  
|------------------------------------------- |  | ---------------- | ------ | -------------- |  | ---- | ------ | ---- |  | ---- | ------ | ---- |  | - | ----- | - |  | - | ----- | - |  | - | ----- | -
|                                            |  |                  |        |               
|                                            |  | Pension Benefits |        | Other Benefits
|                                            |  |                  |        |               
|                                            |  | 2004             |        | 2003           |  | 2002 |        | 2004 |  | 2003 |        | 2002
|                                            |  |                  |        |                |  |      |        |      |  |      |        |     
|Components of net periodic benefit
    cost |  |                  |        |                |  |      |        |      |  |      |        |      |  |   |       |   |  |   |       |   |  |   |       |  
|                                           
|                                           
|                                           
|                                           
|Service costs                               |  | $                | 291    |                |  | $    | 545    |      |  | $    | 399    |      |  | $ | 136   |   |  | $ | 147   |   |  | $ | 204   |  
|                                           
|                                           
|                                           
|                                           
|Interest costs                              |  |                  | 3,320  |                |  |      | 3,498  |      |  |      | 3,556  |      |  |   | 1,532 |   |  |   | 1,701 |   |  |   | 1,712 |  
|                                           
|                                           
|                                           
|                                           
|Expected return on plan assets              |  |                  | (8,313 | )              |  |      | (7,229 | )    |  |      | (8,394 | )    |  |   | -0-   |   |  |   | -0-   |   |  |   | -0-   |  
|                                           
|                                           
|                                           
|                                           
|Transition obligation                       |  |                  | (49    | )              |  |      | (49    | )    |  |      | (49    | )    |  |   | -0-   |   |  |   | -0-   |   |  |   | -0-   |  
|                                           
|                                           
|                                           
|                                           
|Amortization of prior service cost          |  |                  | 129    |                |  |      | 257    |      |  |      | 319    |      |  |   | (80   | ) |  |   | (80   | ) |  |   | (79   | )
|                                           
|                                           
|                                           
|                                           
|Recognized net actuarial (gain) loss        |  |                  | (286   | )              |  |      | 361    |      |  |      | (1,055 | )    |  |   | 99    |   |  |   | 43    |   |  |   | 11    |  
|                                            |  |                  |        |                |  |      |        |      |  |      |        |      |  |   |       |   |  |   |       |   |  |   |       |  
|Benefit (income) costs                      |  | $                | (4,908 | )              |  | $    | (2,617 | )    |  | $    | (5,224 | )    |  | $ | 1,687 |   |  | $ | 1,811 |   |  | $ | 1,848 |  
|                                            |  |                  |        |                |  |      |        |      |  |      |        |      |  |   |       |   |  |   |       |   |  |   |       |  

Below is a table summarizing the Companys expected future
benefit payments and the expected payments due to the Medicare
subsidy over the next ten years:

|             |  |          |        |          |  |                  |       |  |  |   |       | 
|------------ |  | -------- | ------ | -------- |  | ---------------- | ----- |  |  | - | ----- | 
|             |  | Pension  |        | Other    |  | Payments due to 
|             |  | Benefits |        | Benefits |  | Medicare Subsidy
|             |  |          |        |          |  |                 
|2005         |  | $        | 4,512  |          |  | $                | 2,881 |  |  | $ | -0-   | 
|            
|            
|            
|            
|2006         |  |          | 4,386  |          |  |                  | 2,568 |  |  |   | 288   | 
|            
|            
|            
|            
|2007         |  |          | 4,303  |          |  |                  | 2,482 |  |  |   | 290   | 
|            
|            
|            
|            
|2008         |  |          | 4,254  |          |  |                  | 2,413 |  |  |   | 285   | 
|            
|            
|            
|            
|2009         |  |          | 4,285  |          |  |                  | 2,319 |  |  |   | 278   | 
|            
|            
|            
|            
|2010 to 2014 |  |          | 20,567 |          |  |                  | 9,875 |  |  |   | 1,199 | 

The Company recorded $167 of non-cash pension curtailment
charges in 2003 and $2,700 in 2002 related to the disposal or
closure of three manufacturing facilities. These were classified
as restructuring charges in each year.

The Company has two postretirement benefit plans. Under both of
these plans, health care benefits are provided on both a
contributory and noncontributory basis. The assumed health care
cost trend rate has a significant effect on the amounts
reported. A one-percentage-point change in the assumed health
care cost trend rate would have the following effects:

|                                                                         |  |              |       |              |  |   |       | 
|------------------------------------------------------------------------ |  | ------------ | ----- | ------------ |  | - | ----- | 
|                                                                         |  | 1-Percentage |       | 1-Percentage
|                                                                         |  | Point        |       | Point       
|                                                                         |  | Increase     |       | Decrease    
|                                                                         |  |              |       |             
|Effect on total of service and interest cost
    components in 2004      |  | $            | 129   |              |  | $ | 110   | 
|                                                                        
|                                                                        
|                                                                        
|                                                                        
|Effect on post retirement benefit obligation as
    of December 31, 2004 |  | $            | 1,797 |              |  | $ | 1,558 | 

The total contribution charged to pension expense for the
Companys defined contribution plans was $1,446 in 2004,
$1,331 in 2003 and $1,273 in 2002. The Company expects to have
no contributions to its defined benefit plans in 2005.

34



---



##### 



PARK-OHIO INDUSTRIES, INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  Continued

NOTE K  Leases

Rental expense for 2004, 2003 and 2002 was $10,588, $10,263 and
$10,749, respectively. Future minimum lease commitments during
each of the five years following December 31, 2004 are as
follows: $9,820 in 2005, $7,632 in 2006, $5,030 in 2007, $3,993
in 2008, $3,094 in 2009 and $3,858 thereafter.

NOTE L  Industry Segments

The Company operates through three segments: Integrated
Logistics Solutions (ILS), Aluminum Products and
Manufactured Products. ILS is a leading supply chain logistics
provider of production components to large, multinational
manufacturing companies, other manufacturers and distributors.
In connection with the supply of such production components, ILS
provides a variety of value-added, cost-effective supply chain
management services. The principal customers of ILS are in the
semiconductor equipment, heavy-duty truck, industrial equipment,
aerospace and defense, electrical controls, HVAC, vehicle parts
and accessories, appliances, and lawn and garden equipment
industries. Aluminum Products manufactures cast aluminum
components for automotive, agricultural equipment, heavy-duty
truck and construction equipment. Aluminum Products also
provides value-added services such as design and engineering,
machining and assembly. Manufactured Products operates a diverse
group of niche manufacturing businesses that design and
manufacture a broad range of high quality products engineered
for specific customer applications. The principal customers of
Manufactured Products are original equipment manufacturers and
end-users in the aerospace, automotive, railroad, truck and oil
industries.

The Companys sales are made through its own sales
organization, distributors and representatives. Intersegment
sales are immaterial and eliminated in consolidation and are not
included in the figures presented. Intersegment sales are
accounted for at values based on market prices. Income allocated
to segments excludes certain corporate expenses and interest
expense. Identifiable assets by industry segment include assets
directly identified with those operations.

Corporate assets generally consist of cash and cash equivalents,
deferred tax assets, property and equipment, and other assets.

|                                                                          |                       |                         |         |         |   |      |         |         |   |   |         |         |  
|------------------------------------------------------------------------- | --------------------- | ----------------------- | ------- | ------- | - | ---- | ------- | ------- | - | - | ------- | ------- | -
|                                                                          |                       |                        
|                                                                          |                       | Year Ended December 31,
|                                                                          |                       |                        
|                                                                          |                       | 2004                    |         | 2003    |   | 2002
|                                                                          |                       |                         |         |         |   |     
|Net sales:                                                                |                       |                         |         |         |   |      |         |         |   |   |         |        
|                                                                         
|                                                                         
|                                                                         
|                                                                         
|                                                                          | ILS                   |                         | $       | 453,223 |   |      | $       | 377,645 |   |   | $       | 398,141 |  
|                                                                         
|                                                                         
|                                                                         
|                                                                         
|                                                                          | Aluminum products     |                         |         | 135,402 |   |      |         | 90,080  |   |   |         | 106,148 |  
|                                                                         
|                                                                         
|                                                                         
|                                                                         
|                                                                          | Manufactured products |                         |         | 220,093 |   |      |         | 156,570 |   |   |         | 130,166 |  
|                                                                          |                       |                         |         |         |   |      |         |         |   |   |         |        
|                                                                          |                       | $                       | 808,718 |         |   | $    | 624,295 |         |   | $ | 634,455 |        
|                                                                          |                       |                         |         |         |   |      |         |         |   |   |         |        
|Income (loss) before income taxes and change in
    accounting principle: |                       |                         |         |         |   |      |         |         |   |   |         |        
|                                                                         
|                                                                         
|                                                                         
|                                                                         
|                                                                          | ILS                   |                         | $       | 29,191  |   |      | $       | 24,893  |   |   | $       | 17,467  |  
|                                                                         
|                                                                         
|                                                                         
|                                                                         
|                                                                          | Aluminum products     |                         |         | 9,021   |   |      |         | 10,201  |   |   |         | 4,739   |  
|                                                                         
|                                                                         
|                                                                         
|                                                                         
|                                                                          | Manufactured products |                         |         | 18,890  |   |      |         | (13,759 | ) |   |         | (1,342  | )
|                                                                          |                       |                         |         |         |   |      |         |         |   |   |         |        
|                                                                          |                       |                         | 57,102  |         |   |      | 21,335  |         |   |   | 20,864  |        
|                                                                         
|                                                                         
|                                                                         
|                                                                         
|                                                                          | Corporate costs       |                         |         | (7,756  | ) |      |         | (5,803  | ) |   |         | (4,285  | )
|                                                                         
|                                                                         
|                                                                         
|                                                                         
|                                                                          | Interest expense      |                         |         | (31,413 | ) |      |         | (26,151 | ) |   |         | (27,623 | )
|                                                                          |                       |                         |         |         |   |      |         |         |   |   |         |        
|                                                                          |                       | $                       | 17,933  |         |   | $    | (10,619 | )       |   | $ | (11,044 | )      
|                                                                          |                       |                         |         |         |   |      |         |         |   |   |         |        

35



---



##### 



PARK-OHIO INDUSTRIES, INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  Continued

|                                       |                       |                         |         |         |  |      |         |         |  |   |         |         | 
|-------------------------------------- | --------------------- | ----------------------- | ------- | ------- |  | ---- | ------- | ------- |  | - | ------- | ------- | 
|                                       |                       |                        
|                                       |                       | Year Ended December 31,
|                                       |                       |                        
|                                       |                       | 2004                    |         | 2003    |  | 2002
|                                       |                       |                         |         |         |  |     
|Identifiable assets:                   |                       |                         |         |         |  |      |         |         |  |   |         |        
|                                      
|                                      
|                                      
|                                      
|                                       | ILS                   |                         | $       | 297,002 |  |      | $       | 267,361 |  |   | $       | 273,442 | 
|                                      
|                                      
|                                      
|                                      
|                                       | Aluminum products     |                         |         | 105,535 |  |      |         | 88,031  |  |   |         | 79,797  | 
|                                      
|                                      
|                                      
|                                      
|                                       | Manufactured products |                         |         | 163,230 |  |      |         | 121,331 |  |   |         | 151,880 | 
|                                      
|                                      
|                                      
|                                      
|                                       | General corporate     |                         |         | 46,080  |  |      |         | 32,821  |  |   |         | 37,824  | 
|                                       |                       |                         |         |         |  |      |         |         |  |   |         |        
|                                       |                       | $                       | 611,847 |         |  | $    | 509,544 |         |  | $ | 542,943 |        
|                                       |                       |                         |         |         |  |      |         |         |  |   |         |        
|Depreciation and amortization expense: |                       |                         |         |         |  |      |         |         |  |   |         |        
|                                      
|                                      
|                                      
|                                      
|                                       | ILS                   |                         | $       | 4,608   |  |      | $       | 4,868   |  |   | $       | 5,206   | 
|                                      
|                                      
|                                      
|                                      
|                                       | Aluminum products     |                         |         | 5,858   |  |      |         | 5,342   |  |   |         | 6,432   | 
|                                      
|                                      
|                                      
|                                      
|                                       | Manufactured products |                         |         | 4,728   |  |      |         | 5,050   |  |   |         | 4,307   | 
|                                      
|                                      
|                                      
|                                      
|                                       | General corporate     |                         |         | 191     |  |      |         | 219     |  |   |         | 320     | 
|                                       |                       |                         |         |         |  |      |         |         |  |   |         |        
|                                       |                       | $                       | 15,385  |         |  | $    | 15,479  |         |  | $ | 16,265  |        
|                                       |                       |                         |         |         |  |      |         |         |  |   |         |        
|Capital expenditures:                  |                       |                         |         |         |  |      |         |         |  |   |         |        
|                                      
|                                      
|                                      
|                                      
|                                       | ILS                   |                         | $       | 3,691   |  |      | $       | 3,017   |  |   | $       | 1,603   | 
|                                      
|                                      
|                                      
|                                      
|                                       | Aluminum products     |                         |         | 5,497   |  |      |         | 1,878   |  |   |         | 5,927   | 
|                                      
|                                      
|                                      
|                                      
|                                       | Manufactured products |                         |         | 720     |  |      |         | 5,867   |  |   |         | 6,201   | 
|                                      
|                                      
|                                      
|                                      
|                                       | General corporate     |                         |         | 55      |  |      |         | 107     |  |   |         | -0-     | 
|                                       |                       |                         |         |         |  |      |         |         |  |   |         |        
|                                       |                       | $                       | 9,963   |         |  | $    | 10,869  |         |  | $ | 13,731  |        
|                                       |                       |                         |         |         |  |      |         |         |  |   |         |        

The Company had sales of $95,610 in 2004 and $68,238 in 2003 to
International Truck, which represented approximately 12% and 11%
of consolidated net sales for each respective year. For 2002,
sales to no single customer were greater than 10% of
consolidated net sales.

The Companys approximate percentage of net sales by
geographic region were as follows:

|              |  |              |     |      |  |      |     |   |  |  |     |  
|------------- |  | ------------ | --- | ---- |  | ---- | --- | - |  |  | --- | -
|              |  |             
|              |  | Year Ended  
|              |  | December 31,
|              |  |             
|              |  | 2004         |     | 2003 |  | 2002
|              |  |              |     |      |  |     
|United States |  |              | 74  | %    |  |      | 83  | % |  |  | 80  | %
|             
|             
|             
|             
|Canada        |  |              | 9   | %    |  |      | 8   | % |  |  | 13  | %
|             
|             
|             
|             
|Other         |  |              | 17  | %    |  |      | 9   | % |  |  | 7   | %
|              |  |              |     |      |  |      |     |   |  |  |     |  
|              |  |              | 100 | %    |  |      | 100 | % |  |  | 100 | %
|              |  |              |     |      |  |      |     |   |  |  |     |  

At December 31, 2004, approximately 86% of the
Companys assets are maintained in the United States.

36



---



##### 



PARK-OHIO INDUSTRIES, INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  Continued

NOTE M  Accumulated Comprehensive Loss

The components of accumulated comprehensive loss at
December 31, 2004 and 2003 are as follows:

|                                        |       |              |        |       |  |   |        |       | 
|--------------------------------------- | ----- | ------------ | ------ | ----- |  | - | ------ | ----- | 
|                                        |       |             
|                                        |       | December 31,
|                                        |       |             
|                                        |       | 2004         |        | 2003 
|                                        |       |              |        |      
|Foreign currency translation adjustment |       | $            | (3,162 | )     |  | $ | (1,091 | )    
|                                       
|                                       
|                                       
|                                       
|Minimum pension liability               |       |              | 4,838  |       |  |   | 4,355  |      
|                                        |       |              |        |       |  |   |        |      
|                                        | Total |              | $      | 1,676 |  |   | $      | 3,264 | 
|                                        |       |              |        |       |  |   |        |      

NOTE N  Restructuring and Unusual Charges

Since 2001, the Company has responded to the economic downturn
by reducing costs in a variety of ways, including restructuring
businesses and selling non-core manufacturing assets. These
activities generated restructuring and asset impairment charges
in 2001, 2002 and 2003, as the Companys restructuring
efforts continued and evolved.

During 2001, the Company recorded restructuring and asset
impairment charges aggregating $28,462, primarily related to
managements decision to exit certain under-performing
product lines and to close or consolidate certain operating
facilities in 2002. The Companys actions included
1) selling or discontinuing the businesses of Castle Rubber
and Ajax Manufacturing, 2) closing the Cicero Flexible
Products manufacturing facility and discontinue certain
product lines, 3) inventory write-downs and other
restructuring activities at St. Louis Screw & Bolt
and Tocco, 4) closing twenty ILS supply chain logistics
facilities and two ILS manufacturing plants, 5) closing an
Aluminum Products machining facility, and 6) write-down of
certain Corporate assets to current value. The charges were
composed of $11,280 for the impairment of property and equipment
and other long-term assets; $10,299 of cost of goods sold,
primarily to write down inventory of discontinued businesses and
product lines to current market value; and $6,883 for severance
(525 employees) and exit costs. Below is a summary of these
charges by segment.

|                      |  |          |        |            |  |               |        |       |  |   |       |  |  |   |        | 
|--------------------- |  | -------- | ------ | ---------- |  | ------------- | ------ | ----- |  | - | ----- |  |  | - | ------ | 
|                      |  | Cost of  |        |            |  |               |        |      
|                      |  | Products |        | Asset      |  | Restructuring |        |      
|                      |  | Sold     |        | Impairment |  | & Severance   |        | Total
|                      |  |          |        |            |  |               |        |      
|Manufactured Products |  | $        | 8,599  |            |  | $             | 10,080 |       |  | $ | 2,030 |  |  | $ | 20,709 | 
|                     
|                     
|                     
|                     
|ILS                   |  |          | 1,700  |            |  |               | 600    |       |  |   | 4,070 |  |  |   | 6,370  | 
|                     
|                     
|                     
|                     
|Aluminum Products     |  |          | -0-    |            |  |               | -0-    |       |  |   | 783   |  |  |   | 783    | 
|                     
|                     
|                     
|                     
|Corporate             |  |          | -0-    |            |  |               | 600    |       |  |   | -0-   |  |  |   | 600    | 
|                      |  |          |        |            |  |               |        |       |  |   |       |  |  |   |        | 
|                      |  | $        | 10,299 |            |  | $             | 11,280 |       |  | $ | 6,883 |  |  | $ | 28,462 | 
|                      |  |          |        |            |  |               |        |       |  |   |       |  |  |   |        | 

During 2002, the Company recorded further restructuring and
asset impairment charges aggregating $19,190, primarily related
to management decisions to exit additional product lines and
consolidate additional facilities. The Companys planned
actions included 1) selling or discontinuing the businesses
of St. Louis Screw and Bolt and Green Bearing,
2) closing five additional supply chain logistics
facilities and 3) closing or selling two Aluminum Products
manufacturing plants (one of which was closed as of
December 31, 2002). The charges were composed of $5,599 for
severance (490 employees) and exit costs, $2,700 for pension
curtailment costs; $5,628 of costs of goods sold, primarily to
write down inventory of discontinued businesses and product
lines to current market value; and $5,263 for impair-

37



---



##### 



PARK-OHIO INDUSTRIES, INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  Continued

ment of property and equipment and other long-term assets. Below
is a summary of these charges by segment.

|                      |  |          |       |            |  |               |       |             |  |       |       |  |  |   |       |  |  |   |        | 
|--------------------- |  | -------- | ----- | ---------- |  | ------------- | ----- | ----------- |  | ----- | ----- |  |  | - | ----- |  |  | - | ------ | 
|                      |  | Cost of  |       |            |  |               |       |             |  |      
|                      |  | Products |       | Asset      |  | Restructuring |       | Pension     |  |      
|                      |  | Sold     |       | Impairment |  | & Severance   |       | Curtailment |  | Total
|                      |  |          |       |            |  |               |       |             |  |      
|ILS                   |  | $        | 4,500 |            |  | $             | -0-   |             |  | $     | 2,534 |  |  | $ | 2,000 |  |  | $ | 9,034  | 
|                     
|                     
|                     
|                     
|Manufactured Products |  |          | 1,128 |            |  |               | 2,103 |             |  |       | 2,628 |  |  |   | 700   |  |  |   | 6,559  | 
|                     
|                     
|                     
|                     
|Aluminum Products     |  |          | -0-   |            |  |               | 3,160 |             |  |       | 437   |  |  |   | -0-   |  |  |   | 3,597  | 
|                      |  |          |       |            |  |               |       |             |  |       |       |  |  |   |       |  |  |   |        | 
|                      |  | $        | 5,628 |            |  | $             | 5,263 |             |  | $     | 5,599 |  |  | $ | 2,700 |  |  | $ | 19,190 | 
|                      |  |          |       |            |  |               |       |             |  |       |       |  |  |   |       |  |  |   |        | 

During the fourth quarter of 2003, the Company continued its
multi-year efforts to position the Company for renewed, more
profitable growth and recorded restructuring and asset
impairment charges aggregating $19,446. The action primarily
related to restructuring at the Companys Forge Group
resulting from a decision to shut down its locomotive crankshaft
forging plant after entering into a long-term supply contract to
purchase these forgings from a third party. The charges were
composed of $990 for exit costs; $638 of cost of goods sold
primarily to write down inventory of discontinued product lines
to current market value; $1,767 for pension curtailment and
multi-employer pension plan withdrawal costs resulting primarily
from the termination of union representation at the locomotive
crankshaft forging plant and another Manufactured Products
manufacturing facility and the closure of an Aluminum Products
manufacturing plant; and $16,051 for impairment of property and
equipment and other long-term assets. Below is a summary of
these charges by segment.

|                      |  |          |     |            |  |               |        |             |  |       |     |  |  |   |       |  |  |   |        | 
|--------------------- |  | -------- | --- | ---------- |  | ------------- | ------ | ----------- |  | ----- | --- |  |  | - | ----- |  |  | - | ------ | 
|                      |  | Cost of  |     |            |  |               |        |             |  |      
|                      |  | Products |     | Asset      |  | Restructuring |        | Pension     |  |      
|                      |  | Sold     |     | Impairment |  | & Severance   |        | Curtailment |  | Total
|                      |  |          |     |            |  |               |        |             |  |      
|Manufactured Products |  | $        | 638 |            |  | $             | 16,051 |             |  | $     | 990 |  |  | $ | 1,600 |  |  | $ | 19,279 | 
|                     
|                     
|                     
|                     
|Aluminum Products     |  |          | -0- |            |  |               | -0-    |             |  |       | -0- |  |  |   | 167   |  |  |   | 167    | 
|                      |  |          |     |            |  |               |        |             |  |       |     |  |  |   |       |  |  |   |        | 
|                      |  | $        | 638 |            |  | $             | 16,051 |             |  | $     | 990 |  |  | $ | 1,767 |  |  | $ | 19,446 | 
|                      |  |          |     |            |  |               |        |             |  |       |     |  |  |   |       |  |  |   |        | 

The accrued liability for severance and exit costs and related
cash payments consisted of:

|                                            |  |   |        |  
|------------------------------------------- |  | - | ------ | -
|                                           
|                                           
|                                           
|                                           
|Severance and exit charges recorded in 2001 |  | $ | 6,883  |  
|                                           
|                                           
|                                           
|                                           
|Cash payments made in 2001                  |  |   | (2,731 | )
|                                            |  |   |        |  
|Balance at December 31, 2001                |  |   | 4,152  |  
|                                           
|                                           
|                                           
|                                           
|Severance and exit charges recorded in 2002 |  |   | 5,599  |  
|                                           
|                                           
|                                           
|                                           
|Cash payments made in 2002                  |  |   | (5,706 | )
|                                            |  |   |        |  
|Balance at December 31, 2002                |  |   | 4,045  |  
|                                           
|                                           
|                                           
|                                           
|Severance and exit charges recorded in 2003 |  |   | 990    |  
|                                           
|                                           
|                                           
|                                           
|Cash payments made in 2003                  |  |   | (2,500 | )
|                                            |  |   |        |  
|Balance at December 31, 2004                |  |   | 2,535  |  
|                                           
|                                           
|                                           
|                                           
|Severance and exit charges recorded in 2004 |  |   | -0-    |  
|                                           
|                                           
|                                           
|                                           
|Cash payments made in 2004                  |  |   | (2,073 | )
|                                            |  |   |        |  
|Balance at December 31, 2004                |  | $ | 462    |  
|                                            |  |   |        |  

As of December 31, 2004, all of the 525 employees
identified in 2001 and all of the 490 employees identified
in 2002 had been terminated. The workforce reductions under the
restructuring plan consisted of hourly and salaried employees at
various operating facilities due to either closure or
consolidation.

38



---



##### 



PARK-OHIO INDUSTRIES, INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  Continued

As of December 31, 2004, the Company had an accrued
liability of $462 for future estimated employee severance and
plant closing payments.

Idle fixed assets of $6,040 were included in other assets as of
December 31, 2004. These consisted primarily of property,
plant and equipment of two idled aluminum casting plants, for
which the Company is evaluating new products and technologies.
These assets may either be reclassified to property, plant and
equipment if placed in service, or sold. They are currently
carried at estimated fair value.

At December 31, 2004, the Companys balance sheet
reflected assets held for sale at their estimated current value
of $3,027 for inventory, property, plant and equipment and other
long-term assets. Net sales for the businesses that were
included in net assets held for sale were $ -0- in 2004, $1,139
in 2003, and $19,159 in 2002. Operating income (loss), excluding
restructuring and unusual charges for these entities were $ -0-
in 2004, $(32) in 2003, and $(334) in 2002.

NOTE O  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 second quarter of 2004, the Company entered into
forward contracts, for the purpose of hedging exposure to
changes in the value of accounts receivable in Euros against the
US dollar, for a notional amount of $5,075, of which $500 was
outstanding at December 31, 2004. These transactions are
considered cash flow hedges and, therefore, the fair market
value at December 31, 2004 of a $75 loss, 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. The $75
of loss on the fair value of the hedges is classified in current
accrued liabilities. The Company recognized $169 of foreign
currency losses upon settlement of the forward contracts.

39



---



##### 








|        |                                                                                         
|------- | ----------------------------------------------------------------------------------------
|Item 9. | Changes in and Disagreements With Accountants on Accounting
    and Financial Disclosure

There were no changes in nor disagreements with the
Companys independent auditors on accounting and financial
disclosure matters within the two-year period ended
December 31, 2004.






|         |                        
|-------- | -----------------------
|Item 9A. | Controls and Procedures

Evaluation of disclosure controls and procedures

As of December 31, 2004, management, including our Chief
Executive Officer and Chief Financial Officer, evaluated the
effectiveness of the design and operation of the Companys
disclosure controls and procedures. Based upon, and as of the
date of, that evaluation, our Chief Executive Officer and Chief
Financial Officer concluded that the disclosure controls and
procedures were effective, in all material respects, to ensure
that information required to be disclosed in the reports we file
and submit under the Exchange Act is recorded, processed,
summarized and reported as and when required.

Changes in internal controls

There have been no changes in the Companys internal
control over financial reporting that occurred during the fourth
quarter of 2004 that has materially affected, or is reasonably
likely to materially affect, the Companys internal control
over financial reporting.

Managements Assessment of the Effectiveness of the
Companys Internal Control over Financial Reporting

Management of the Company is responsible for establishing and
maintaining adequate internal control over financial reporting,
as such term is defined in Rule 15d-15(f) under the
Exchange Act. Management carried out an evaluation, with
participation of the Companys Chief Executive Officer and
Chief Financial Officer, of the effectiveness of its internal
control over financial reporting as of December 31, 2004.
The framework on which such evaluation was based is contained in
the report entitled Internal Control 
Integrated Framework issued by the Committee of Sponsoring
Organizations of the Treadway Commission (the COSO
Report). Management has identified no material weakness in
internal control over financial reporting. The Companys
management has assessed the effectiveness of the Companys
internal control over financial reporting as of
December 31, 2004 based on the framework contained in the
COSO Report, and has prepared Managements Annual Report on
Internal Control Over Financial Reporting included at
page 16 of this Annual Report on Form 10-K.

Ernst & Young LLP, the Companys independent
registered public accounting firm, have issued an attestation
report on the Companys managements assessment of the
effectiveness of the Companys internal control over
financial reporting as of December 31, 2004. This
attestation report is included at page 17 of this
Form 10-K.




Item 9B. Other Information.

None.

40



---



##### 






Part III






|         |                                                   
|-------- | --------------------------------------------------
|Item 10. | Directors and Executive Officers of the Registrant

Information required by this item has been omitted pursuant to
General Instruction I of Form 10-K.






|         |                       
|-------- | ----------------------
|Item 11. | Executive Compensation

Information required by this item has been omitted pursuant to
General Instruction I of Form 10-K.






|         |                                                                                                   
|-------- | --------------------------------------------------------------------------------------------------
|Item 12. | Security Ownership of Certain Beneficial Owners and
    Management and Related Stockholder Matters

Information required by this item has been omitted pursuant to
General Instruction I of Form 10-K.



|         |                                               
|-------- | ----------------------------------------------
|Item 13. | Certain Relationships and Related Transactions

Information required by this item has been omitted pursuant to
General Instruction I of Form 10-K.






|         |                                       
|-------- | --------------------------------------
|Item 14. | Principal Accountant Fees and Services

The following table presents fees for professional audit
services rendered by Ernst & Young LLP for the audit of the
Companys and its parents annual financial statements
for the years ended December 31, 2004 and 2003:

|                   |  |      |           |      |  |   |         | 
|------------------ |  | ---- | --------- | ---- |  | - | ------- | 
|                   |  | 2004 |           | 2003
|                   |  |      |           |     
|Audit fees         |  | $    | 1,264,000 |      |  | $ | 568,500 | 
|                  
|                  
|                  
|                  
|Audit-related fees |  |      | 58,000    |      |  |   | 48,000  | 
|                  
|                  
|                  
|                  
|Tax fees           |  |      | 65,000    |      |  |   | 67,250  | 

Fees for audit services include fees associated with the annual
audit, the reviews of the Companys quarterly reports on
Form 10-Q, statutory audits required internationally,
services associated with the Companys issuance of the
8.375% Senior Subordinated Notes due 2014 and the audit of
managements assessment of internal control under Section
404 of the Sarbanes-Oxley Act of 2002. Audit-related fees
principally included fees in connection with pension plan audits
and accounting consultation. Tax fees include tax compliance and
tax planning. Park-Ohio is a wholly-owned subsidiary of Holdings
and does not have a separate audit committee. Holdings
audit committee has adopted a pre-approval policy for audit and
non-audit related services. For a description of Holdings
pre-approval policies for audit and non-audit related services
and the percentage of audit-related, tax and all other services
that were not pre-approved by Holdings audit committee
pursuant to the de minimis exception, see Holdings proxy
statement for the 2005 annual meeting of Holdings
shareholders to be filed with the Securities and Exchange
Commission pursuant to Regulation 14A not later than
120 days after the end of Holdings fiscal year.

41



---



##### 



Part IV



|         |                                           
|-------- | ------------------------------------------
|Item 15. | Exhibits and Financial Statement Schedules

(a)(1) The following financial statements are included in
Part II, Item 8:

|                                                                                                         |  |      |    | 
|-------------------------------------------------------------------------------------------------------- |  | ---- | -- | 
|                                                                                                         |  | Page
|                                                                                                         |  |     
|Managements Annual Report on Internal
    Control Over Financial Reporting                              |  |      | 16 | 
|                                                                                                        
|                                                                                                        
|                                                                                                        
|                                                                                                        
|Report of Independent Registered Public
    Accounting Firm on Internal Control Over Financial Reporting |  |      | 17 | 
|                                                                                                        
|                                                                                                        
|                                                                                                        
|                                                                                                        
|Report of Independent Registered Public
    Accounting Firm                                              |  |      | 18 | 
|                                                                                                        
|                                                                                                        
|                                                                                                        
|                                                                                                        
|Consolidated Balance Sheets 
    December 31, 2004 and 2003                                             |  |      | 19 | 
|                                                                                                        
|                                                                                                        
|                                                                                                        
|                                                                                                        
|Consolidated Statements of Operations 
    Years Ended December 31, 2004, 2003 and 2002                 |  |      | 20 | 
|                                                                                                        
|                                                                                                        
|                                                                                                        
|                                                                                                        
|Consolidated Statements of Shareholders
    Equity  Years Ended December 31, 2004, 2003 and
    2002   |  |      | 21 | 
|                                                                                                        
|                                                                                                        
|                                                                                                        
|                                                                                                        
|Consolidated Statements of Cash Flows 
    Years Ended December 31, 2004, 2003 and 2002                 |  |      | 22 | 
|                                                                                                        
|                                                                                                        
|                                                                                                        
|                                                                                                        
|Notes to Consolidated Financial Statements                                                               |  |      | 23 | 

(2) Financial Statement Schedules



| |                                                                                                                                                                                                                                                  
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | All schedules for which provision is made in the applicable
    accounting regulations of the Securities and Exchange Commission
    are not required under the related instructions or are not
    applicable and, therefore, have been omitted.

(3) Exhibits:



| |                                                                                                                                                                   
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | The exhibits filed as part of this Form 10-K are listed on
    the Exhibit Index immediately preceding such exhibits and
    are incorporated herein by reference.
|
| | No annual report or proxy statement covering the Companys
    last fiscal year has been or will be circulated to security
    holders.                           

42



---



##### 






SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of
the Securities Exchange Act of 1934, the registrant has duly
caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.



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



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

| |                                   
| | ----------------------------------
| |                                   
| | Richard P. Elliott, Vice President
| | and Chief Financial Officer       

Date:     March 21, 2005

Pursuant to the requirements of the Securities Exchange Act
of 1934, this report has been signed by the following persons in
the capacities and on the dates indicated.

|                      |  |                                                                                               |  |               
|--------------------- |  | --------------------------------------------------------------------------------------------- |  | --------------
|                     
|*Edward F. Crawford   |  | Chairman, Chief Executive Officer and Director                                                |  |               
|                     
|*Richard P. Elliott   |  | Vice President  and Chief Financial
    Officer (Principal Financial and Accounting Officer) |  |               
|*Matthew V. Crawford  |  | President and Director                                                                        |  |               
|*Patrick V. Auletta   |  | Director                                                                                      |  |               
|*Kevin R. Greene      |  | Director                                                                                      |  |               
|* Lewis E. Hatch, Jr. |  | Director                                                                                      |  | March 21, 2005
|*Dan T. Moore         |  | Director                                                                                      |  |               
|*Lawrence O. Selhorst |  | Director                                                                                      |  |               
|*Ronna Romney         |  | Director                                                                                      |  |               
|*James W. Wert        |  | Director                                                                                      |  |               



|  |                                                                                                                                                                                                                                                                                                                                        
|- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|* | The undersigned, pursuant to a Power of Attorney executed by
    each of the Directors and officers identified above and filed
    with the Securities and Exchange Commission, by signing his name
    hereto, does hereby sign and execute this report on behalf of
    each of the persons noted above, in the capacities indicated.

March 21, 2005

| |     |                      
| | --- | ---------------------
| | By: | /s/ ROBERT D. VILSACK

| |                                    
| | -----------------------------------
| |                                    
| | Robert D. Vilsack, Attorney-in-Fact

43



---



##### 



ANNUAL REPORT ON FORM 10-K

PARK-OHIO INDUSTRIES, INC.


For the Year Ended December 31, 2004

EXHIBIT INDEX

|        |    |    |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|------- | -- | -- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |    |   
|        |    |   
|        | 3  | .1 |  | Amended and Restated Articles of Incorporation of
    Park-Ohio Industries, Inc. (filed as Exhibit 3.1 to the
    Form 10-K of Park-Ohio Industries, Inc. for the year ended
    December 31, 1998, SEC File No. 333-43005 and incorporated
    by reference and made a part hereof)                                                                                                                                                                                                                     
|        | 3  | .2 |  | Code of Regulations of Park-Ohio Holdings Corp.
    (filed as Exhibit 3.2 to the Form 10-K of Park-Ohio
    Industries, Inc. for the year ended December 31, 1998, SEC
    File No. 333-43005 and incorporated by reference and made a
    part hereof)                                                                                                                                                                                                                                                  
|        | 4  | .1 |  | Amended and Restated Credit Agreement, dated
    November 5, 2003, among Park-Ohio Industries, Inc., the
    other loan parties party thereto, the lenders party thereto,
    Bank One, NA and Banc One Capital Markets Inc. (filed as
    Exhibit 4 to the Form 10-Q of Park-Ohio Holdings Corp.
    for the quarter ended September 30, 2003, SEC File
    No. 000-03134 and incorporated by reference and made a part
    hereof)                                                                     
|        | 4  | .2 |  | First Amendment, dated September 30, 2004,
    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, Bank One,
    NA and Bank One Capital Markets, Inc. (filed as Exhibit 4.1
    to the Form 8-K of Park-Ohio Holdings Corp. on
    October 1, 2004, SEC File No. 000-03134 and
    incorporated herein by reference and made a part hereof)                                      
|        | 4  | .3 |  | Second Amendment, dated December 29, 2004,
    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, NA (successor by merger to Bank
    One, NA), as agent (filed as Exhibit 4.1 to the
    Form 8-K of Park-Ohio Holdings Corp. filed on
    January 5, 2005, SEC File No. 000-03134 and
    incorporated herein by reference and made a part hereof)
|        | 4  | .4 |  | Indenture, dated as of November 30, 2004,
    among Park-Ohio Industries, Inc., the Guarantors (as defined
    therein) and Wells Fargo Bank, NA, as trustee (filed as
    Exhibit 4.1 to the Form 8-K of Park-Ohio Holdings
    Corp. filed on December 6, 2004, SEC File
    No. 000-03134 and incorporated herein by reference and made
    a part hereof)                                                                                                                                            
|        | 10 | .1 |  | Form of Indemnification Agreement entered into
    between Park-Ohio Industries, Inc. and each of its directors and
    certain officers (filed as Exhibit 10.1 to the
    Form 10-K of Park-Ohio Holdings Corp. for the year ended
    December 31, 1998, SEC File No. 333-43005 and
    incorporated by reference and made a part hereof)                                                                                                                                                              
|        | 10 | .2 |  | Registration Rights Agreement, dated
    November 30, 2004, among Park-Ohio Industries, Inc., the
    Guarantors (as defined therein) and the initial purchasers that
    are party thereto (filed as Exhibit 10.1 to Form 8-K
    of Park-Ohio Holdings Corp. filed on December 6, 2004, SEC
    File No. 000-03134 and incorporated herein by reference and
    made a part hereof)                                                                                                                    
|        | 12 | .1 |  | Computation of Ratio of Earnings to Fixed Charges                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|        | 21 | .1 |  | List of Subsidiaries of Park-Ohio Industries, Inc.                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|        | 24 | .1 |  | Power of Attorney                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|        | 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 | .1 |  | Certification requirement under Section 906
    of the Sarbanes-Oxley Act of 2002                                                                                                                                                                                                                                                                                                                                                                                                                        

44