<PAGE>

                       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, 2001

                                       OR

     [ ]      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 0-3134

                           PARK-OHIO INDUSTRIES, INC.
             (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

<Table>
<S>                                                         <C>
                        OHIO                                                     34-6520107
-----------------------------------------------------       -----------------------------------------------------
           (STATE OR OTHER JURISDICTION OF                          (I.R.S. EMPLOYER IDENTIFICATION NO.)
           INCORPORATION OR ORGANIZATION)

                 23000 EUCLID AVENUE
                   CLEVELAND, OHIO                                                  44117
-----------------------------------------------------       -----------------------------------------------------
      (ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)                                   (ZIP CODE)
</Table>

       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
             ------------------------------------------------------
                                (TITLE OF CLASS)

     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 I1(a)
and (b) of Form 10-K and is therefore filing this form with the 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 [ ]

     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]

     All of the outstanding stock of the registrant is held by Park-Ohio
Holdings Corp. As of March 28, 2002, 100 shares of the registrant's common
stock, $1 par value, were outstanding.

                   DOCUMENTS INCORPORATED BY REFERENCE: NONE
<PAGE>

                                     PART I

ITEM 1. BUSINESS

THE COMPANY

     Park-Ohio Industries Inc. ("Park-Ohio"), a wholly-owned subsidiary of
Park-Ohio Holdings Corp. ("Holdings"), was incorporated as an Ohio corporation
in January, 1985. Park-Ohio, primarily through its subsidiaries is a leading
provider of logistics services and a manufacturer of highly engineered products.
Reference herein to the "Company" includes, where applicable, Holdings,
Park-Ohio and its direct and indirect subsidiaries and its predecessor
companies, which have operated for more than 150 years.

     The Company operates through three segments, Integrated Logistics Solutions
("ILS"), Aluminum Products and Manufactured Products. ILS is a leading 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, technology, industrial equipment, aerospace
and defense, electrical controls, heating, ventilating and air-conditioning
("HVAC"), heavy-duty truck, vehicle parts and accessories, appliances and
motors, and lawn and garden equipment industries. Aluminum Products manufactures
cast aluminum components for automotive, agricultural equipment, heavy duty
truck and construction equipment manufacturers. 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 ("OEMs") and end-users in the
aerospace, automotive, railroad, truck and oil industries. As of December 31,
2001, the Company employed approximately 3,200 persons.

OPERATIONS

     The following chart highlights the Company's three business segments, the
primary industries they serve and the key products they sell.

<Table>
<Caption>
                                                                                     NET SALES
                                                                                      FOR THE
                                                                                     YEAR ENDED
                                                                                      DEC. 31,
       SEGMENT          PRIMARY INDUSTRIES SERVED       SELECTED PRODUCTS/SERVICES      2001
       -------          -------------------------       --------------------------   ----------
                                                                                     (MILLIONS)
<S>                    <C>                             <C>                           <C>
INTEGRATED LOGISTICS   Semiconductor equipment,        Cross-industry supply chain     $417.0
  SOLUTIONS            technology, industrial          management services;
                       equipment, aerospace and        planning, implementing and
                       defense, electrical             managing the physical flow
                       controls, HVAC, heavy duty      of production components to
                       truck, vehicle parts and        large multi-national
                       accessories, appliances and     manufacturing companies
                       motors, lawn and garden
                       equipment
ALUMINUM PRODUCTS      Automotive, agricultural        Engineering and                 $ 84.8
                       equipment, heavy duty truck     manufacturing of aluminum
                       and construction equipment      castings
</Table>

                                        1
<PAGE>

<Table>
<Caption>
                                                                                     NET SALES
                                                                                      FOR THE
                                                                                     YEAR ENDED
                                                                                      DEC. 31,
       SEGMENT          PRIMARY INDUSTRIES SERVED       SELECTED PRODUCTS/SERVICES      2001
       -------          -------------------------       --------------------------   ----------
                                                                                     (MILLIONS)
<S>                    <C>                             <C>                           <C>
MANUFACTURED PRODUCTS  Aerospace, automotive,          Engineering and                 $134.6
                       railroad, truck and oil         manufacturing of the
                                                       following: forged and
                                                       machined products such as
                                                       aircraft landing gears,
                                                       locomotive crankshafts and
                                                       camshafts; induction heating
                                                       systems; industrial rubber
                                                       products; and oil pipe
                                                       threading systems
</Table>

INTEGRATED LOGISTICS SOLUTIONS

     ILS is a leading provider of cross-industry supply chain management
services and specializes in the process of planning, implementing, and managing
the physical flow of production components to large multinational manufacturing
companies from the point of manufacturing to the point of use. ILS generated net
sales of $417.0 million, or 66% of the Company's net sales for the year ended
December 31, 2001. ILS operates out of branches, or logistics services
warehouses, located throughout the United States, Canada, Puerto Rico, Mexico
and England, and has a central distribution center located in Dayton, Ohio. ILS
continues to consolidate its network of branches to reduce costs and serve its
customers more efficiently, including planned closure of twenty branches and two
manufacturing plants (of which eleven branches and one plant were closed as of
December 31, 2001). ILS recorded restructuring and impairment charges related to
these closures in the third and fourth quarters of 2001.

     Large, multinational manufacturing companies continue to make it a priority
to reduce their total cost of production components. Administrative and overhead
costs to source, plan, purchase, quality assure, inventory and handle production
components comprise a large portion of total cost. ILS has the size, experience,
information systems and focus to reduce these costs substantially while
providing reliable just-in-time delivery. ILS also provides a wide array of
value-added services which are increasingly demanded by manufacturers.

     Products and Services. Supply chain management, which is ILS' primary focus
for future growth, involves offering customers supply chain management services
and 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. Supply chain
management customers receive various value-added services, such as part usage
and cost analysis, supplier selection, quality assurance, bar coding, product
packaging and tracking, just-in-time delivery, electronic billing services and
ongoing technical support. ILS also provides engineering and design services to
its customers. 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.

     Supply chain management services are typically provided to customers
pursuant to sole-source supply chain services contracts. These agreements enable
ILS' customers to both reduce procurement costs and better focus on their core
manufacturing competencies by: (i) significantly reducing the cost of production
component procurement by outsourcing many internal purchasing, quality assurance
and inventory fulfillment responsibilities; (ii) reducing the amount of working
capital invested in inventory;

                                        2
<PAGE>

(iii) achieving purchasing efficiencies and cost reductions as a result of
supplier consolidation; and (iv) receiving technical expertise in the selection
of production components for certain manufacturing processes. Although supply
chain services are often inventory intensive, the Company believes that such
agreements foster longer-lasting supply relationships with customers, who
increasingly rely on ILS for their production component needs, as compared to
traditional buy/sell distribution relationships. Sales pursuant to sole-source
supply chain service contracts have increased significantly in recent years and
represented over 68% of ILS' total supply chain management sales in 2001. ILS'
remaining 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(R) nuts and wheel hardware, which 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, which are used in large volumes by customers in the
automotive, truck and railroad industries.

     Markets and Customers. In 2001, approximately 88% of ILS' net sales were to
domestic customers. Remaining sales were primarily to manufacturing facilities
of large, multinational customers located in Canada, Mexico and the United
Kingdom. 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 15,000 customers domestically
and internationally. The principal markets served by ILS are semiconductor
equipment, technology, industrial equipment, aerospace and defense, electrical
controls, HVAC, heavy duty truck, vehicle parts and accessories, appliances and
motors, and lawn and garden equipment industries. The five largest customers,
within which ILS sells through sole-source contracts to multiple operating
divisions or locations, accounted for approximately 26% of sales of ILS in 2001.
Three of the five largest customers are in the heavy-duty truck industry. The
loss of any one of these customers would have a material adverse effect on this
segment.

     Competition. There are numerous competitors in the supply chain services
industry. Management believes that substantially all of ILS' competitors operate
on a regional basis and do not provide customers with the wide array of supply
chain management services offered by ILS. ILS competes primarily on the basis of
its value-added services, delivery capabilities, geographic reach, extensive
product selection, price and reputation for high service levels with primarily
domestic competitors who are capable of providing inventory management programs.

ALUMINUM PRODUCTS

     The Aluminum Products segment generated net sales of $84.8 million, or 13%
of the Company's net sales for the year ended December 31, 2001. Management
believes Aluminum Products is one of the few part suppliers that has the
capabilities of providing high volume, high quality permanent mold, sand-cast,
die-cast and lost-foam products. Aluminum Products casts and machines these
products at multiple locations in four states. In 2001, Aluminum Products closed
a casting plant, and consolidated the operations of a machining plant into
another existing plant and recorded related restructuring and impairment charges
in the fourth quarter of 2001.

     Aluminum Products' cast aluminum parts are manufactured for automotive,
agricultural equipment, heavy duty truck and construction equipment OEMs
primarily located in North America. 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. Aluminum Products also provides value-added services
such as machining, drilling, tapping and part assembly. Although these parts are
lightweight, they possess high durability and integrity characteristics even
under extreme pressure and temperature conditions. Demand by OEMs for aluminum
castings has increased in recent years as OEMs have sought lighter alternatives
to heavier steel and iron components. Lighter aluminum cast components increase
an automobile's fuel efficiency without decreasing
                                        3
<PAGE>

structural integrity. Management believes this replacement trend will continue
as end-users and government standards regarding automotive fuel efficiency
become increasingly stringent. The three largest customers, of which Aluminum
Products sells to multiple operating divisions through sole source contracts,
accounted for approximately 86% of Aluminum Products sales in 2001. The loss of
any one of these customers would have a material adverse effect on this segment.
The domestic aluminum castings industry is highly competitive. Aluminum Products
competes principally on the basis of its ability to: (i) engineer and
manufacture high quality, cost effective, machined castings utilizing multiple
casting technologies in large volumes; (ii) provide timely delivery; and (iii)
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
structured to benefit as customers continue to consolidate their supplier base.

MANUFACTURED PRODUCTS

     The Manufactured Products segment includes forged and machined products,
capital equipment, and industrial rubber products. Manufactured Products
generated net sales of $134.6 million, or 21% of the Company's net sales for the
year ended December 31, 2001. The five largest customers, within which
Manufactured Products sells primarily through sole source contracts to multiple
operating divisions, accounted for approximately 22% of Manufactured Products
sales in 2001. The loss of business from any one of these customers would have
an adverse effect on this segment.

     The Company's forged and machined products business is carried out
primarily at two operating units consisting of Park Drop Forge and Ohio
Crankshaft. The forging process enables metal to be shaped while generally
retaining higher structural integrity than metal shaped through other processes.
Park Drop Forge manufactures closed-die metal forgings of up to 6,000 pounds,
including crankshafts and aircraft landing gears. Park Drop Forge's products are
sold primarily to machining companies, including Ohio Crankshaft and
sub-assemblers who finish the products for sale to OEMs in the railroad and
aerospace industries. Ohio Crankshaft machines, induction hardens and surface
finishes crankshafts and camshafts used primarily in locomotives. Forged and
machined products are sold to a wide variety of domestic and international OEMs
and other manufacturers in the transportation, and construction industries. The
Company's forged and machined products business competes domestically and
internationally with other small to medium-sized businesses on the basis of
product quality and precision.

     The Company manufactures large industrial equipment through its operating
units consisting of Tocco, Feco, PMC-Colinet and Ajax. Tocco specializes in the
engineering and construction of induction heating systems primarily for the
automotive and truck industries. Tocco's induction heating systems are
engineered and built to customer specifications and are used primarily by OEMs
for surface hardening. Feco produces complete oven systems that combine heat
processing and curing technologies with material handling and conveying methods.
Feco's principal products include industrial drying and curing ovens for
automotive components, metal can curing ovens, specialized conveyor and
automation systems for lightweight containers, and plastic and glass bottle
coating and finishing systems. PMC-Colinet produces tube threading machines and
related parts for the oil drilling industry. Ajax engineers, manufactures and
services mechanical forging presses ranging in size from 500 to 8,000 tons that
are used worldwide in the automotive and truck manufacturing industries. In
December 2001, the Company finalized plans to discontinue the operations of Ajax
and dispose of existing working capital and fixed assets. The Company wrote
these assets down to expected realizable value as part of the restructuring and
impairment charges recorded in the fourth quarter of 2001. The Company's capital
equipment units compete with large domestic and international equipment
manufacturers on the basis of service capability, ability to meet customer
specifications, delivery performance and engineering expertise.

     The Company manufactures injection and transfer molded products, lathe-cut
goods, roll coverings and various items requiring rubber to metal bonding for
use in industrial applications through three
                                        4
<PAGE>

operating units consisting of Geneva Rubber, Cicero Flexible Products and Castle
Rubber. Geneva Rubber manufactures injection molded rubber products for
customers in the automotive, telecommunications and heavy truck industries. Its
products include primary wire harnesses, transoceanic cable boots and shock and
vibration mounts. Cicero Flexible Products develops and manufactures injection
molded silicone rubber products for customers in the automotive, food processing
and consumer appliance industries, such as wire harnesses, spark plug boots and
nipples and general sealing gaskets. The Company has closed the Chicago-area
plant of Cicero Flexible Products. Castle Rubber manufactures valve seals, power
and conveyor rolls and slitter rings. In December 2001, the Company finalized
plans to discontinue operations of Castle Rubber and dispose of existing working
capital and fixed assets. The Company wrote down assets to expected realizable
values and recorded restructuring and impairment charges in the fourth quarter
of 2001 relating to both Cicero and Castle. The industrial rubber products
operating units compete primarily on the basis of price and product quality with
other domestic small to medium-sized manufacturers of rubber products.

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. ILS often obtains new customers as a result of referrals from
existing customers. Aluminum Products and Manufactured Products primarily market
and sell their products in North America 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 fasteners are available from alternative sources. ILS has
multiple sources of supply for standard products, but has limited supply sources
for certain specialty products. Approximately 25% of ILS' delivered components
are purchased from suppliers in foreign countries, primarily Canada, Taiwan,
Japan and Korea. The Company is 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.

CUSTOMER DEPENDENCE

     The Company has thousands of customers who demand quality, delivery and
service. Numerous customers have recognized our performance by awarding the
Company with supplier quality awards. Ford is the only customer accounting for
more than 10% of our consolidated sales within the past three years (only in the
year 2000).

BACKLOG

     Management believes that backlog is not a meaningful measure for ILS, as a
majority of ILS' 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.

                                        5
<PAGE>

ENVIRONMENTAL REGULATIONS

     The Company is subject to numerous federal, state and local laws and
regulations designed to protect public health and the environment
("Environmental Laws"), particularly with regard to discharges and emissions, as
well as handling, storage, treatment and disposal, of various substances and
wastes. 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.

     In general, the Company has not experienced difficulty in complying with
Environmental Laws in the past, and compliance with Environmental Laws has not
had a material adverse effect on the Company's financial condition, liquidity
and results of operations. The Company's capital expenditures on environmental
control facilities were not material during the past five years and such
expenditures are not expected to be material to the Company in the foreseeable
future.

     The Company has 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. The
Company is 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, the
Company's share of such costs has not been material and based on available
information, the Company does not expect its exposure at any of these locations
to have a material adverse effect on its results of operations, liquidity or
financial condition.

INFORMATION AS TO INDUSTRY SEGMENT REPORTING AND GEOGRAPHIC AREAS

     The information contained under the heading of "Note I--Industry Segments"
of notes to consolidated financial statements included herein, relating to net
sales, income before income taxes, identifiable assets and other information by
industry segment for the years ended December 31, 2001, 2000, and 1999 is
incorporated herein by reference.

RECENT DEVELOPMENTS

     The information contained under the heading of "Note B--Acquisitions and
Dispositions" and "Note K--Restructuring and Impairment Charges" of notes to
consolidated financial statements included herein, is incorporated by reference.

ITEM 2. PROPERTIES

     The Company's operations include numerous manufacturing and warehousing
facilities located in twenty-four states in the United States, and in Puerto
Rico, as well as in Belgium, Canada, England and Mexico. Approximately 94% of
the available square footage is located in the United States. Approximately 48%
of the available square footage is owned. In 2001, approximately 42% of the
available domestic square footage was used by the ILS segment; 42% was used by
the Manufactured Products segment and 16% by the Aluminum Products segment.
Approximately 49% of the available foreign square footage was used by the ILS
segment and 51% was used by the Manufactured Products segment. In the opinion of
management, Park-Ohio's facilities are generally well maintained and are
suitable and adequate for their intended uses.

                                        6
<PAGE>

     The following table provides information relative to the principal
facilities of Park-Ohio and its subsidiaries.

<Table>
<Caption>
RELATED INDUSTRY                                     OWNED OR   APPROXIMATE
    SEGMENT                   LOCATION                LEASED   SQUARE FOOTAGE        USE
----------------              --------               --------  --------------        ---
<S>               <C>                                <C>       <C>              <C>
ILS SEGMENT       Cleveland, OH                      Leased        41,000*      ILS Corporate
                                                                                  Office
                  Dayton, OH                         Leased       155,480       Warehouse
                  Lawrence, PA                       Leased       116,000       Warehouse and
                                                                                Manufacturing
                  St. Paul, MN                       Leased        74,425       Warehouse
                  Atlanta, GA                        Leased        56,000       Warehouse
                  Dallas, TX                         Leased        49,985       Warehouse
                  Nashville, TN                      Leased        44,900       Warehouse
                  Wallaceburg, Ontario, Canada       Leased        43,200       Warehouse
                  Solon, OH                          Leased        42,563       Warehouse
                  Charlotte, NC                      Leased        39,800       Warehouse
                  Kent, OH                           Leased       225,000       Manufacturing
                  Mississauga, Ontario, Canada       Leased        56,000       Manufacturing
                  Cleveland, OH                      Owned         50,000       Manufacturing
                  Delaware, OH                       Owned         45,000       Manufacturing
                  The ILS Segment has approximately forty other leased facilities, none of
                  which is deemed to be a principal facility of the Company.

ALUMINUM          Conneaut, OH                       Leased        82,300       Manufacturing
PRODUCTS          Conneaut, OH                       Leased        64,000       Manufacturing
SEGMENT           Conneaut, OH                       Leased        45,700       Manufacturing
                  Conneaut, OH                       Owned         91,780       Manufacturing
                  Hudson, MI                         Owned         90,000       Manufacturing
                  Hudson, MI                         Owned         58,000       Manufacturing
                  Hudson, MI                         Owned         57,000       Manufacturing
                  Fremont, IN                        Owned        108,000       Manufacturing
                  Tupelo, MS                         Owned        110,000       Manufacturing

MANUFACTURED      Cuyahoga Hts, OH                   Owned        427,000       Manufacturing
PRODUCTS          Cleveland, OH                      Owned        391,000       Manufacturing
SEGMENT           Le Roeulx, Belgium                 Owned        120,000       Manufacturing
                  Cleveland, OH                      Owned        116,000       Manufacturing
                  Wickliffe, OH                      Owned        110,000       Manufacturing
                  Boaz, AL                           Owned        100,000       Manufacturing
                  Geneva, OH                         Leased        80,000       Manufacturing
                  The Manufactured Products Segment has twelve other owned and leased
                  facilities, none of which is deemed to be a principal facility of the
                  Company.
             *    Includes 10,000 square feet used by Park-Ohio Corporate Office.
</Table>

ITEM 3. 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 threatened
litigation will not have a material adverse effect on the Company's financial
condition, liquidity or results of operations. You can find more information
about our legal proceedings under Management's Discussion and Analysis of
Financial Condition and Results of Operations.

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
<PAGE>

                                    PART II

ITEM 5. MARKET FOR THE REGISTRANT'S COMMON STOCK AND RELATED SECURITY HOLDER
        MATTERS

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

ITEM 6. SELECTED CONSOLIDATED 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

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

     The consolidated financial statements of the Company include the accounts
of Park-Ohio Holdings Corp. 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
acquisitions in 1999, the divestiture of Kay Home Products in 2000, a fire at
one of the Company's rubber plants in 2000, and restructuring and impairment
charges taken in 2001.

OVERVIEW

     The Company operates through three segments: Integrated Logistics Solutions
("ILS"), Aluminum Products and Manufactured Products. ILS is a leading logistics
provider of production components to original equipment manufacturers ("OEMs"),
other manufacturers and distributors. In connection with the supply of such
industrial products, ILS provides a variety of value-added, cost-effective
supply chain management services to major OEMs. The principal customers of ILS
are semiconductor equipment, technology, industrial equipment, aerospace and
defense, electrical controls, HVAC, heavy duty truck, vehicle parts and
accessories, appliances and motors, lawn and garden equipment industries.
Aluminum Products manufactures cast aluminum components primarily for automotive
OEMs. 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 OEMs and end-users in the
automotive, railroad, truck, oil and aerospace industries.

     Between 1993 and 1999, the Company grew significantly, through both
internal growth and acquisitions. Over this period, the Company's net sales
increased at a 40% compounded annual growth, from $94.5 million to $717.2
million. Over the same period, income before income taxes increased from $3.9
million to $28.6 million.

     Growth continued through the first half of 2000, but the Company's sales
volume and profitability dropped substantially in the second half. First half
2000 net sales totaled $410.9 million, but dropped 16% to $343.8 million in the
second half. This decline was primarily due to rapid contraction in the
heavy-duty truck industry (the Company's largest customer segment) starting in
the third quarter, and fourth quarter contraction in the automotive industry
(the Company's second largest customer segment).

     The Company's sales volumes and profitability continued to decline during
2001, due to overall weakness in the manufacturing economy, and particularly to
continued contraction in the heavy-duty truck and automotive industries. Despite
these sales declines, the Company believes it has retained or gained market
share in most major markets served. In 2001, the Company incurred a net loss of

                                        8
<PAGE>

$25.4 million ($5.1 million excluding $20.3 million after-tax restructuring and
impairment charges and non-operating items).

     The Company responded to this downturn by reducing costs, increasing
specific prices, restructuring businesses and selling non-core manufacturing
assets. Cost reductions included supplier price reductions, headcount reductions
due to layoffs and attrition of approximately 600 (15%) during 2001 and
operational efficiencies. Despite customer pricing pressures, the Company
negotiated significantly increased prices for several, particularly low-margin
product lines in the Aluminum Products and Manufactured Products segments. The
Company restructured many of its businesses, including planned closure of twenty
logistics warehouses and closure or sale of eight manufacturing plants (of which
eleven warehouses and three plants were closed as of December 31, 2001). With
regard to these actions, in 2001 the Company recorded restructuring and
impairment charges of $28.5 million before tax consisting of $6.9 million for
severance and exit costs, $10.3 million recorded in cost of products sold,
primarily to write down inventory of discontinued businesses and other product
lines to fair value, and $11.3 million for the impairment of property and
equipment and other long-term assets. The Company continued to work toward the
sale of non-core manufacturing assets, including the December, 2001 sale of
substantially all the assets of Cleveland City Forge for cash of $6.1 million,
which resulted in a pretax gain of approximately $.1 million. Management's
actions are intended to position the Company for profitability when the
manufacturing economy stabilizes and returns to growth.

     In June 2000, the Company's Cicero Flexible Products plant was destroyed in
a fire. During 2000, the Company received interim insurance payments, primarily
reflecting the replacement cost of fixed assets, and recognized related net
gains of $5.2 million. In 2001, the Company expensed $1.9 million of
non-recurring business interruption costs which were not covered by insurance.

     On June 30, 2000, the Company sold substantially all the assets of Kay Home
Products, for cash of approximately $9.2 million and recorded a pretax loss of
approximately $15.3 million.

     In June 2001, the Financial Accounting Standards Board ("FASB") issued
Statement of Financial Accounting Standards No. 142 "Goodwill and Other
Intangible Assets" ("FAS 142"). Under FAS 142, goodwill and intangible assets
with indefinite lives are no longer amortized, but are reviewed for impairment
annually, or more frequently if impairment indicators arise. Separable
intangible assets that are not deemed to have indefinite lives will continue to
be amortized over their useful lives (but with no maximum life). The Company is
required to adopt FAS 142 effective on January 1, 2002, and finish evaluating
potential impairment of existing goodwill by June 30, 2002. If goodwill is
determined to be impaired, the charge would be accounted for as a cumulative
effect adjustment as a result of a change in accounting principle.

RESULTS OF OPERATIONS

  2001 versus 2000

     Net sales declined by $118.3 million, or 16%, from $754.7 million in 2000
to $636.4 million in 2001. Sales declined 14%, or $105.5 million, excluding the
$12.8 million from the divestiture of Kay Home Products. ILS net sales declined
14%, or $65.3 million, due primarily to the shrinkage in heavy truck and other
customer industries. Aluminum Products net sales decreased 24%, or $26.5
million. This included a $12.5 million decrease relating to the ending of
certain sales contracts which were anticipated, and $3.7 million relating to the
Company's decision to discontinue production of low-volume products, while the
remainder, $10.3 million, resulted from reductions in production releases for
ongoing automotive contracts. Manufactured Products net sales declined 16%, or
$26.4 million, of which $12.8 million related to the sale of Kay Home Products,
while the remainder, $13.6 million, reflected reduced customer demand.

     Excluding $10.3 million of restructuring and impairment charges included in
cost of products sold, primarily related to discontinued product lines, gross
profit declined by $33.1 million, or 26%, from 2000 and gross margin declined to
approximately 15.1% in 2001, from 17.2% in 2000, reflecting decreased

                                        9
<PAGE>

margins in all three segments. The decline in ILS gross margin related to
reduced volumes resulting in the absorption of fixed operational overheads over
a smaller sales base. For Aluminum Products, the decrease in gross margins
related to the absorption of fixed manufacturing overheads over a smaller
production base. The decrease in margins in the Manufactured Products segment
resulted from decreased production levels which absorbed fixed overhead costs
over a smaller production base, and from cost overruns on several large capital
equipment systems.

     Selling, general and administrative expenses ("SG&A") decreased by 11% or
$8.7 million, from $76.7 million in 2000 to $68.0 million for 2001. This
decrease was due to cost reductions in all three segments, plus $2.1 million
from the divestiture of Kay Home Products. During 2001, selling, general and
administrative expenses were negatively affected by a decrease in net pension
credits of $.8 million, reflecting less favorable investment returns on pension
plan assets. Consolidated SG&A expenses as a percentage of net sales were 10.7%
during 2001 as compared to 10.2% for 2000.

     Interest expense increased by $.3 million from $30.8 million in 2000 to
$31.1 million in 2001 due to higher average debt outstanding, partially offset
by lower average interest rates during 2001. For the year ended December 31,
2001, the Company averaged outstanding borrowings of $353.8 million as compared
to $342.4 million for the prior year. The $11.4 million increase related
primarily to higher working capital levels in the first half of the year. The
average borrowing rate of 8.80% for the year ended December 31, 2001 was 20
basis points lower than the average rate of 9.00% for 2000, primarily due to
decreased rates on the Company's revolving credit facility.

     The effective income tax rate for 2001 was 30%, compared to 41% in 2000,
before considering the tax effect of the divestiture of Kay Home Products. This
decrease resulted from the tax-rate impact of permanent tax items such as
goodwill amortization given the pretax loss during 2001, as compared to a pretax
profit in 2000. At December 31, 2001, subsidiaries of the Company had $14.3
million of net operating loss carry forwards for federal tax purposes.

  2000 versus 1999

     Net sales increased by $37.5 million, or 5%, from $717.2 million in 1999 to
$754.7 million in 2000. Of this sales increase, $9.9 million represented
internal growth. Net sales grew $27.6 million from acquisitions made in the
second half of 1999 and in 2000 partially offset by the divestiture in 2000. For
ILS, net sales increased 9%, or $39.2 million, of which $16.1 million related to
internal growth and $23.1 million related to acquisitions made in July 1999 and
September 2000. For Manufactured Products, sales increased 10%, or $14.0
million, of which $9.5 million related to internal growth and $4.5 million
growth resulted from acquisitions net of divestiture. For Aluminum Products, net
sales decreased 12%, or $15.7 million, primarily due to the ending of certain
sales contracts at Metalloy, which was expected at the time of its purchase in
1999, partially offset by internal growth. During the second half of 2000, sales
volumes to heavy truck customers (primarily in the ILS segment) dropped
significantly while sales volumes to automotive customers (primarily in the
Aluminum Products segment) weakened in the fourth quarter.

     Gross profit increased by $3.7 million, or 3%, from $125.8 million in 1999
to $129.5 million in 2000 and is primarily related to acquisitions made in 1999
and 2000. The Company's consolidated gross margin was approximately 17.2% in
2000 and 17.5% in 1999. Margin declined in 2000 partially due to the effects of
a strike at Park Drop Forge which was settled in December.

     Selling, general and administrative costs increased by 12% to $76.7 million
for 2000 from $68.6 million for 1999. The increase was primarily related to
recent acquisitions. During 2000, selling, general and administrative expenses
benefited from an increase in net pension credits of $2.8 million, reflecting
favorable investment returns on pension plan assets. Consolidated selling,
general and administrative expenses as a percentage of net sales were 10.2%
during the current period and 9.6% for 1999.

     Interest expense increased by $6.0 million from $24.8 million in 1999 to
$30.8 million in 2000 due to higher average debt outstanding and higher average
interest rates during 2000. For the year ended

                                        10
<PAGE>

December 31, 2000, the Company averaged outstanding borrowings of $342.4 million
as compared to $294.6 million for 1999. The $47.8 million increase related
primarily to acquisitions completed during the second half of 1999. The average
borrowing rate of 9.00% for the year ended December 31, 2000 is 60 basis points
higher than the average rate of 8.40% for 1999. This rate increase was due both
to the $50 million 9.25% Senior Subordinated Notes issued in June 1999, and to
increased interest rates on the Company's bank revolving credit facility.

     Before considering the tax effect of the sale of Kay Home Products, the
effective income tax rate for 2000 was 41%, while for 1999 it was 43%. The
decrease in tax rate resulted from creating a foreign sales corporation and an
increase in research and experimental credits. The divestiture of Kay Home
Products generated a pre-tax loss of $15.3 million, but only reduced income
taxes by $2.1 million due to the exclusion of goodwill as a deduction for tax
purposes. At December 31, 2000, subsidiaries of the Company had $5.7 million of
net operating loss carry forwards for federal tax purposes.

CRITICAL ACCOUNTING POLICIES

     Preparation of financial statements in conformity with accounting
principles generally accepted in the United States ("GAAP") requires management
to make certain estimates and assumptions which affect amounts reported in the
Company's consolidated financial statements. Management has made their best
estimates and judgments of certain amounts included in the financial statements,
giving due consideration to materiality. The Company does 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.

     The Company does not have off-balance-sheet arrangements, financings or
other relationships with unconsolidated entities or other persons, also known as
special purpose entities ("SPE's"). The Company currently uses no derivative
instruments.

     Revenue Recognition:  The Company recognizes more than 95% of its revenue
when title is transferred to unaffiliated customers, typically upon shipment.
The Company's remaining revenue, from long-term contracts, is recognized using
the percentage of completion method of accounting. The Company's 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. This estimated allowance is based primarily on management's evaluation
of the financial condition of the customer.

     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, compared to estimated future usage
and sales.

     Impairment of Long-Lived Assets:  Goodwill and other long-lived assets are
reviewed by management for impairment whenever events or changes in
circumstances indicate the carrying amount may not be recoverable. During 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 M to the
Consolidated Financial Statements.

     Through December 31, 2001, the Company amortized goodwill primarily over
forty years using the straight-line method. The Company adopted Financial
Accounting Standard ("FAS") No. 142 "Goodwill and Other Intangible Assets" as of
January 1, 2002. The Company will therefore no longer amortize goodwill, but
will review goodwill for impairment annually, or more frequently if impairment
indicators arise. As required, the Company will finish evaluating potential
impairment of existing goodwill, using

                                        11
<PAGE>

the criteria of FAS 142, by June 30, 2002. If goodwill is determined to be
impaired, the charge would be accounted for as a cumulative effect adjustment as
a result of a change in accounting principle.

     Deferred Income Tax Assets and Liabilities:  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
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.

     Pension and Other Postretirement Benefit Plans:  The Company and its
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 trend rates. Pension plan asset performance in
the future will directly impact net income of the Company.

     Other Matters:  Transactions with related parties, primarily building
leases, are in the ordinary course of business, are conducted on an arm's-length
basis, and are not material to the Company's financial position, net income or
cash flows.

SEASONALITY; VARIABILITY OF OPERATING RESULTS

     The Company's results of operations are typically stronger in the first six
months rather 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 to holidays in the fourth quarter.

     The timing of orders placed by the Company's 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 the
Company's business units. Such variability is particularly evident at the
capital equipment businesses, included in the Manufactured Products segment,
which typically ship a few large systems per year.

FORWARD-LOOKING STATEMENTS

     This Form 10-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. Certain statements in this Management's Discussion and
Analysis of Financial Condition and Results of Operations contain
forward-looking statements, including without limitation, discussion regarding
the Company's anticipated amounts of restructuring charges, credit availability,
levels and funding of capital expenditures and trends for 2002. Forward-looking
statements are necessarily subject to risks, uncertainties and other factors,
many of which are outside our control, which could cause actual results to
differ materially from such statements. These uncertainties and other factors
include such things as: general business conditions, competitive factors,
including pricing pressures and product innovation; raw material availability
and pricing; changes in the our relationships with customers and suppliers; 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 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 truck industries; dependence on key management; and dependence on
information systems. Any forward-looking statement speaks only as of the date on
                                        12
<PAGE>

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.

                                        13
<PAGE>

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

  INDEX TO CONSOLIDATED FINANCIAL STATEMENTS AND SUPPLEMENTARY FINANCIAL DATA

<Table>
<Caption>
                                                              PAGE
                                                              ----
<S>                                                           <C>
Report of Ernst & Young LLP, Independent Auditors...........   15
Consolidated Balance Sheets -- December 31, 2001 and 2000...   16
Consolidated Statements of Operations -- Years Ended
  December 31, 2001, 2000 and 1999..........................   17
Consolidated Statements of Shareholder's Equity -- Years
  Ended December 31, 2001, 2000 and 1999....................   18
Consolidated Statements of Cash Flows -- Years Ended
  December 31, 2001, 2000 and 1999..........................   19
Notes to Consolidated Financial Statements..................   20
</Table>

                                        14
<PAGE>

               REPORT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS

Board of Directors and Shareholders
Park-Ohio Industries, Inc.

     We have audited the accompanying consolidated balance sheets of Park-Ohio
Industries, Inc. and subsidiaries (a wholly-owned subsidiary of Park-Ohio
Holdings Corp.) as of December 31, 2001 and 2000, and the related consolidated
statements of operations, shareholders' equity and cash flows for each of the
three years in the period ended December 31, 2001. 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 auditing standards generally
accepted in the 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
Holdings Corp. and subsidiaries at December 31, 2001 and 2000 and the
consolidated results of their operations and their cash flows for each of the
three years in the period ended December 31, 2001 in conformity with accounting
principles generally accepted in the United States.

                                          /s/ Ernst & Young LLP

Cleveland, Ohio
March 1, 2002

                                        15
<PAGE>

                  PARK-OHIO INDUSTRIES, INC. AND SUBSIDIARIES

                          CONSOLIDATED BALANCE SHEETS

<Table>
<Caption>
                                                                   DECEMBER 31
                                                              ----------------------
                                                                2001         2000
                                                              ---------    ---------
                                                              (DOLLARS IN THOUSANDS)
<S>                                                           <C>          <C>
ASSETS
Current Assets
  Cash and cash equivalents.................................  $  2,344     $  2,552
  Accounts receivable, less allowances for doubtful accounts
    of $2,680 in 2001 and $3,292 in 2000....................    99,241      117,318
  Inventories...............................................   151,463      189,023
  Other current assets......................................    26,427       26,037
                                                              --------     --------
         Total Current Assets...............................   279,475      334,930
Property, Plant and Equipment
  Land and land improvements................................     5,670        5,993
  Buildings.................................................    27,020       35,026
  Machinery and equipment...................................   181,790      193,444
                                                              --------     --------
                                                               214,480      234,463
  Less accumulated depreciation.............................   105,155      101,757
                                                              --------     --------
                                                               109,325      132,706
Other Assets
  Goodwill, net of accumulated amortization of $16,016 in
    2001 and $12,283 in 2000................................   130,263      133,612
  Net assets held for sale..................................    22,733          -0-
  Prepaid pension and other.................................    50,371       46,870
                                                              --------     --------
                                                              $592,167     $648,118
                                                              ========     ========
LIABILITIES AND SHAREHOLDER'S EQUITY
Current Liabilities
  Trade accounts payable....................................  $ 65,131     $ 76,041
  Accrued expenses..........................................    28,345       28,822
  Current portion of long-term liabilities..................     3,787        3,904
                                                              --------     --------
         Total Current Liabilities..........................    97,263      108,767
Long-Term Liabilities, less current portion
  Long-term debt............................................   328,731      343,248
  Other postretirement benefits.............................    24,001       24,487
  Other.....................................................    15,277       17,883
                                                              --------     --------
                                                               368,009      385,618
Shareholder's Equity
  Common stock; par value $1 per share......................       -0-          -0-
  Additional paid-in capital................................    64,844       64,844
  Retained earnings.........................................    66,303       91,747
  Accumulated other comprehensive (loss)....................    (4,252)      (2,858)
                                                              --------     --------
                                                               126,895      153,733
                                                              --------     --------
                                                              $592,167     $648,118
                                                              ========     ========
</Table>

See notes to consolidated financial statements.

                                        16
<PAGE>

                  PARK-OHIO INDUSTRIES, INC. AND SUBSIDIARIES

                     CONSOLIDATED STATEMENTS OF OPERATIONS

<Table>
<Caption>
                                                                 YEAR ENDED DECEMBER 31
                                                            --------------------------------
                                                              2001        2000        1999
                                                            --------    --------    --------
                                                                 (DOLLARS IN THOUSANDS)
<S>                                                         <C>         <C>         <C>
Net sales.................................................  $636,417    $754,674    $717,222
Cost of products sold.....................................   550,397     625,205     591,439
                                                            --------    --------    --------
  Gross profit............................................    86,020     129,469     125,783
Selling, general and administrative expenses..............    68,010      76,726      68,587
Amortization of goodwill..................................     3,733       3,907       3,836
Restructuring and impairment charges......................    18,163         -0-         -0-
                                                            --------    --------    --------
  Operating income (loss).................................    (3,886)     48,836      53,360
Non-operating items, net..................................     1,850      10,118         -0-
Interest expense..........................................    31,108      30,812      24,752
                                                            --------    --------    --------
     Income (loss) before income taxes....................   (36,844)      7,906      28,608
Income taxes (benefit)....................................   (11,400)      7,183      12,164
                                                            --------    --------    --------
          Net income (loss)...............................  $(25,444)   $    723    $ 16,444
                                                            ========    ========    ========
</Table>

See notes to consolidated financial statements.

                                        17
<PAGE>

                  PARK-OHIO INDUSTRIES, INC. AND SUBSIDIARIES

                CONSOLIDATED STATEMENTS OF SHAREHOLDER'S EQUITY

<Table>
<Caption>
                                                                         ACCUMULATED
                                                ADDITIONAL                  OTHER
                                       COMMON    PAID-IN     RETAINED   COMPREHENSIVE
                                       STOCK     CAPITAL     EARNINGS   INCOME (LOSS)    TOTAL
                                       ------   ----------   --------   -------------   --------
                                                        (DOLLARS IN THOUSANDS)
<S>                                    <C>      <C>          <C>        <C>             <C>
Balance at January 1, 1999...........   $-0-     $64,844     $77,580       $(1,582)     $140,842
Comprehensive income:
  Net income.........................                         16,444                      16,444
  Foreign currency translation
     adjustment......................                                          730           730
                                                                                        --------
  Comprehensive income...............                                                     17,174
Dividends paid.......................                         (3,000)                     (3,000)
                                        ----     -------     -------       -------      --------
Balance at December 31, 1999.........    -0-      64,844      91,024          (852)      155,016
Comprehensive income (loss):
  Net income.........................                            723                         723
  Foreign currency translation
     adjustment......................                                       (2,006)       (2,006)
                                                                                        --------
  Comprehensive (loss)...............                                                     (1,283)
                                        ----     -------     -------       -------      --------
Balance at December 31, 2000.........    -0-      64,844      91,747        (2,858)      153,733
Comprehensive loss:
  Net loss...........................                        (25,444)                    (25,444)
  Foreign currency translation
     adjustment......................                                       (1,394)       (1,394)
                                                                                        --------
  Comprehensive loss.................                                                    (26,838)
                                        ----     -------     -------       -------      --------
Balance at December 31, 2001.........   $-0-     $64,844     $66,303       $(4,252)     $126,895
                                        ====     =======     =======       =======      ========
</Table>

See notes to consolidated financial statements.

                                        18
<PAGE>

                  PARK-OHIO INDUSTRIES, INC. AND SUBSIDIARIES

                     CONSOLIDATED STATEMENTS OF CASH FLOWS

<Table>
<Caption>
                                                                  YEAR ENDED DECEMBER 31
                                                             --------------------------------
                                                               2001        2000        1999
                                                             --------    --------    --------
                                                                  (DOLLARS IN THOUSANDS)
<S>                                                          <C>         <C>         <C>
OPERATING ACTIVITIES
  Net income (loss)........................................  $(25,444)   $    723    $ 16,444
  Adjustments to reconcile net income (loss) to net cash
     provided (used) by operations:
       Gain from fire insurance............................       -0-      (5,200)        -0-
       Loss on the sale of Kay Home Products...............       -0-      15,318         -0-
       Depreciation and amortization.......................    19,911      20,048      18,698
       Restructuring and impairment charges................    16,362         -0-         -0-
       Deferred income taxes...............................    (6,473)      6,217       6,904
  Changes in operating assets and liabilities excluding
     acquisitions of businesses:
       Accounts receivable.................................    16,257      (7,121)     (5,127)
       Inventories.........................................    34,327       3,775     (32,726)
       Accounts payable and accrued expenses...............   (23,911)     (7,742)     (2,359)
       Other...............................................    (8,731)     (2,983)     (3,290)
                                                             --------    --------    --------
       Net Cash Provided (Used) by Operating Activities....    22,298      23,035      (1,456)
INVESTING ACTIVITIES
  Purchases of property, plant and equipment, net..........   (13,923)    (24,968)    (22,650)
  Costs of acquisitions, net of cash acquired..............       -0-      (3,890)    (65,426)
  Proceeds from the sale of business units.................     6,051       9,177         -0-
  Other, net...............................................       -0-      (6,100)       (445)
                                                             --------    --------    --------
       Net Cash (Used) by Investing Activities.............    (7,872)    (25,781)    (88,521)
FINANCING ACTIVITIES
  Proceeds from bank arrangements..........................    19,000      23,000     101,500
  Payments on long-term debt...............................   (33,634)    (23,327)    (56,726)
  Issuance of 9.25% senior subordinated notes, net of
     deferred financing costs..............................       -0-         -0-      49,508
  Dividends paid...........................................       -0-         -0-      (3,000)
                                                             --------    --------    --------
       Net Cash (Used) Provided by Financing Activities....   (14,634)       (327)     91,282
       Increase (Decrease) in Cash and Cash Equivalents....      (208)     (3,073)      1,305
       Cash and Cash Equivalents at Beginning of Year......     2,552       5,625       4,320
                                                             --------    --------    --------
       Cash and Cash Equivalents at End of Year............  $  2,344    $  2,552    $  5,625
                                                             ========    ========    ========
  Taxes paid (refunded)....................................  $ (3,346)   $  3,261    $  6,892
  Interest paid............................................    28,554      30,194      23,646
</Table>

See notes to consolidated financial statements.

                                        19
<PAGE>

                  PARK-OHIO INDUSTRIES, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                        DECEMBER 31, 2001, 2000 AND 1999
                             (DOLLARS IN THOUSANDS)

NOTE A -- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

     Consolidation:  The consolidated financial statements include the accounts
of the Company (a wholly-owned subsidiary of Park-Ohio Holdings Corp.) 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 generally accepted accounting principles 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 cost (principally the
first-in, first-out method for 85% of its inventories and last-in, first-out for
the remainder) or market value. If the first-in, first-out method of inventory
accounting had been used exclusively by the Company, inventories would have been
approximately $4,421 and $4,956 higher than reported at December 31, 2001 and
2000, respectively.

  Major Classes of Inventories

<Table>
<Caption>
                                                              DECEMBER 31
                                                          -------------------
                                                            2001       2000
                                                          --------   --------
<S>                                                       <C>        <C>
In-process and finished goods...........................  $137,021   $164,833
Raw materials and supplies..............................    14,442     24,190
                                                          --------   --------
                                                          $151,463   $189,023
                                                          ========   ========
</Table>

     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.

     Goodwill:  Goodwill is amortized primarily over forty years using the
straight-line method. Management periodically evaluates goodwill and other
long-lived assets for possible impairment through undiscounted cash flow
analyses as required by Statement of Financial Accounting Standards No. 121,
"Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to
be Disposed of".

     In June 2001, the Financial Accounting Standards Board ("FASB") issued
Statement of Financial Accounting Standards No. 142 "Goodwill and Other
Intangible Assets" ("FAS 142"). Under FAS 142, goodwill and intangible assets
with indefinite lives are no longer amortized, but are reviewed for impairment
annually, or more frequently if impairment indicators arise. The Company is
required to adopt FAS 142 effective January 1, 2002, and finish evaluating
potential impairment of existing goodwill by June 30, 2002. If goodwill is
determined to be impaired, the charge would be accounted for as a cumulative
effect adjustment as a result of a change in accounting principle.

     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

                                        20
<PAGE>
                  PARK-OHIO INDUSTRIES, INC. AND SUBSIDIARIES

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- CONTINUED

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.

     Stock-Based Compensation:  The Company has elected to account for
stock-based compensation using the intrinsic value method prescribed in
Accounting Principles Board Opinion No. 25 "Accounting for Stock Issued to
Employees" ("APB 25"), and related interpretations. Under APB 25, because the
exercise price of the Company's employee stock options equals the fair market
value of the underlying stock on the date of grant, no compensation expense is
recognized. Compensation expense resulting from fixed awards of restricted
shares is measured at the date of grant and expensed over the vesting period.

     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.

     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 5% 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
balance sheet. The Company's revenue recognition policies are in accordance with
the SEC's Staff Accounting Bulletin ("SAB") No. 101, "Revenue Recognition."

     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, 2001 the Company had uncollateralized
receivables with seven customers in the automotive and truck industry, each with
several locations, aggregating $32,864 which represents approximately 33% of the
Company's trade accounts receivable. During 2001, sales to these customers
amounted to approximately $182,200 which represents 29% of the Company's net
sales.

     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 which 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 and represent the entire balance in accumulated other
comprehensive loss.

     Impact of Other Recently Issued Accounting Pronouncements: The Company
adopted Financial Accounting Standards Board Statement No. 133 "Accounting for
Derivative Instruments and Hedging Activities," as amended, on January 1, 2001.
Because the Company does not currently use derivatives, adoption of the new
Statement did not impact results of operations or the financial position of the
Company.
                                        21
<PAGE>
                  PARK-OHIO INDUSTRIES, INC. AND SUBSIDIARIES

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- CONTINUED

     In June 2001, the Financial Accounting Standards Board ("FASB") issued
Statement of Financial Accounting Standards No. 141, "Business Combinations"
("FAS 141"). FAS 141 requires all business combinations initiated after June 30,
2001 to be accounted for using the purchase method, which is consistent with the
Company's treatment of prior business combinations.

     In October 2001, the FASB issued Statement of Financial Accounting
Standards No. 144, "Accounting for the Impairment or Disposal of Long-Lived
Assets" ("FAS 144"), which supersedes FAS 121, "Accounting for the Impairment of
Long-Lived Assets and for Long-Lived Assets to Be Disposed Of." Although
retaining many of the fundamental impairment recognition and measurement
provisions of FAS 121, the new rules supersede the provisions of APB Opinion 30
with regard to reporting the effects of a disposal of a segment of a business.
Under FAS 144, more dispositions will qualify for discontinued operations
treatment. The Company does not expect that adoption of this standard on January
1, 2002 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 -- ACQUISITIONS AND DISPOSITIONS

     On December 21, 2001 the Company completed the sale of substantially all of
the assets of Cleveland City Forge for cash of approximately $6.1 million and
recorded a gain of approximately $.1 million. Cleveland City Forge was a
non-core business in the Manufactured Products Segment, producing clevises and
turnbuckles for the construction industry.

     On September 30, 2000, the Company acquired IBM's plant automation software
product lines and related assets for cash of approximately $3.9 million. The
transaction has been accounted for as a purchase and the results of operations
prior to the date of acquisition were not deemed to be significant as defined in
Regulation S-X.

     On June 30, 2000 the Company completed the sale of substantially all of the
assets of Kay Home Products for cash of approximately $9.2 million and recorded
a loss of approximately $15.3 million, which is included in non-operating items,
net in the consolidated statement of income. Kay Home Products was a non-core
business producing and distributing barbecue grills, tray tables, screen houses
and plant stands.

     During 1999, the Company acquired all of the stock of The Metalloy
Corporation ("Metalloy"), Columbia Nut and Bolt Corp. ("Columbia"), Industrial
Fasteners Corporation ("Industrial"), M.P. Colinet ("Colinet") and substantially
all of the assets of St. Louis Screw & Bolt Co. ("St. Louis Screw") and PMC
Industries ("PMC") for cash of approximately $65.4 million. Metalloy is a full
service aluminum casting and machining company. Columbia and Industrial are
logistics providers of Class C components. St. Louis Screw is a manufacturer of
bolts and PMC and Colinet provide capital equipment and associated parts for the
oil drilling industry. Each of these transactions has been accounted for as a
purchase. The purchase price and the results of operations of each of these
businesses prior to their respective dates of acquisition were not deemed to be
significant as defined in Regulation S-X.

                                        22
<PAGE>
                  PARK-OHIO INDUSTRIES, INC. AND SUBSIDIARIES

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- CONTINUED

NOTE C -- ACCRUED EXPENSES

     Accrued expenses include the following:

<Table>
<Caption>
                                                               DECEMBER 31
                                                            -----------------
                                                             2001      2000
                                                            -------   -------
<S>                                                         <C>       <C>
Self-insured liabilities..................................  $ 3,219   $ 3,267
Warranty and installation accruals........................    1,908     2,662
Accrued payroll and payroll-related items.................    5,177     3,065
State and local taxes.....................................      949     1,730
Advance billings..........................................    2,372       883
Acquisition liabilities...................................      269     1,694
Interest payable..........................................    3,212     1,882
Severance and exit costs..................................    4,152       -0-
Sundry....................................................    7,087    13,639
                                                            -------   -------
     Totals...............................................  $28,345   $28,822
                                                            =======   =======
</Table>

NOTE D -- FINANCING ARRANGEMENTS

     Long-term debt consists of the following:

<Table>
<Caption>
                                                              DECEMBER 31
                                                          -------------------
                                                            2001       2000
                                                          --------   --------
<S>                                                       <C>        <C>
9.25% Senior Subordinated Notes due 2007................  $199,930   $199,930
Revolving credit maturing on December 31, 2003..........   126,000    138,500
Other...................................................     4,838      6,972
                                                          --------   --------
                                                           330,768    345,402
Less current maturities.................................     2,037      2,154
                                                          --------   --------
       Total............................................  $328,731   $343,248
                                                          ========   ========
</Table>

     Maturities of long-term debt during each of the five years following
December 31, 2001 are approximately $2,037 in 2002, $126,639 in 2003, $398 in
2004, $387 in 2005 and $378 in 2006.

     The Company is a party to a credit and security agreement dated December
31, 2000, 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 $180 million. The Credit Agreement currently provides for a detailed
borrowing base formula to be developed in 2002. This borrowing base formula will
provide borrowing capacity to the Company based on negotiated percentages of
eligible accounts receivable, inventory and fixed assets. The minimum borrowing
capacity at the implementation date of the detailed borrowing base will be at
least 10% greater than borrowings on that date. Until the implementation date
borrowings are limited to $160 million. Interest is payable quarterly at either
the bank's prime lending rate plus .5%-1.5% (5.75% at December 31, 2001) or at
Park-Ohio's election at LIBOR plus 2.75%-3.50% (5.19% at December 31, 2001). The
Company's ability to elect LIBOR-based interest as well as the overall interest
rate are dependent on the Company's ratio of senior funded indebtedness to pro
forma earnings before interest, taxes, depreciation and amortization ("EBITDA"),
as defined in the Credit Agreement, and adjusted every quarter. As of December
31, 2001, the Company was limited to prime-based borrowings. Up to $7.0 million
in standby letters of credit and commercial letters of credit may be issued
under the Credit Agreement. In addition to the bank's customary letter of credit
fees, a 3/4% fee is assessed on

                                        23
<PAGE>
                  PARK-OHIO INDUSTRIES, INC. AND SUBSIDIARIES

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- CONTINUED

standby letters of credit on an annual basis. As of December 31, 2001, in
addition to amounts borrowed under the Credit Agreement, there is $4.1 million
outstanding primarily for standby letters of credit. A fee of .25% to .50% is
imposed by the bank on the unused portion of available borrowings. The Credit
Agreement expires on December 31, 2003 and borrowings are secured by
substantially all of the Company's assets.

     Provisions of the Senior Subordinated Notes and the revolving 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. The agreement also requires maintenance of specific financial ratios.

     The weighted average interest rate on all debt was 7.69% at December 31,
2001.

     The fair market value of the Senior Subordinated Notes based on published
market prices was approximately $122,957 and $150,947 at December 31, 2001 and
2000, respectively. The carrying value of cash and cash equivalents, accounts
receivable, accounts payable, and borrowings under the credit agreement
approximate fair value at December 31, 2001 and 2000.

NOTE E -- INCOME TAXES

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

<Table>
<Caption>
                                                                DECEMBER 31
                                                              ----------------
                                                               2001     2000
                                                              ------   -------
<S>                                                           <C>      <C>
Deferred tax assets:
  Postretirement benefit obligation.........................  $8,600   $ 9,000
  Inventory.................................................   7,100     5,800
  Net operating loss and tax credit carryforwards...........   4,900     2,000
  Other -- net..............................................   5,500     4,400
                                                              ------   -------
       Total deferred tax assets............................  26,100    21,200
Deferred tax liabilities:
  Tax over book depreciation................................  11,100    13,200
  Pension...................................................  11,600     9,500
                                                              ------   -------
       Total deferred tax liabilities.......................  22,700    22,700
                                                              ------   -------
Net deferred tax assets (liabilities).......................  $3,400   $(1,500)
                                                              ======   =======
</Table>

                                        24
<PAGE>
                  PARK-OHIO INDUSTRIES, INC. AND SUBSIDIARIES

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- CONTINUED

     Income taxes consisted of the following:

<Table>
<Caption>
                                                            YEAR ENDED DECEMBER 31
                                                          ---------------------------
                                                            2001      2000     1999
                                                          --------   ------   -------
<S>                                                       <C>        <C>      <C>
Current (refundable):
     Federal............................................  $ (5,828)  $  106   $ 3,007
     State..............................................       369      774     1,246
     Foreign............................................       532       86     1,007
                                                          --------   ------   -------
                                                            (4,927)     966     5,260
Deferred:
     Federal............................................    (6,135)   5,025     6,029
     State..............................................      (338)   1,192       875
                                                          --------   ------   -------
                                                            (6,473)   6,217     6,904
                                                          --------   ------   -------
Income taxes............................................  $(11,400)  $7,183   $12,164
                                                          ========   ======   =======
</Table>

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

<Table>
<Caption>
                                                            YEAR ENDED DECEMBER 31
                                                          ---------------------------
                                                            2001      2000     1999
                                                          --------   ------   -------
<S>                                                       <C>        <C>      <C>
Computed statutory amount...............................  $(12,700)  $2,617   $ 9,662
Effect of state income taxes payable....................        20    1,304     1,400
Goodwill................................................       668      715       751
Non deductible goodwill write off upon sale of Kay Home
  Products..............................................       -0-    3,513       -0-
Other, net..............................................       612     (966)      351
                                                          --------   ------   -------
Income taxes............................................  $(11,400)  $7,183   $12,164
                                                          ========   ======   =======
</Table>

     At December 31, 2001, subsidiaries of the Company have net operating loss
carryforwards for income tax purposes of approximately $14.3 million subject to
certain limitations, which expire in 2002 to 2021.

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

                                        25
<PAGE>
                  PARK-OHIO INDUSTRIES, INC. AND SUBSIDIARIES

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- CONTINUED

NOTE G -- 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, 2001 and 2000:

<Table>
<Caption>
                                                                             POSTRETIREMENT
                                                           PENSION              BENEFITS
                                                     -------------------   -------------------
                                                       2001       2000       2001       2000
                                                     --------   --------   --------   --------
<S>                                                  <C>        <C>        <C>        <C>
CHANGE IN BENEFIT OBLIGATION
Benefit obligation at beginning of year............  $ 50,707   $ 46,820   $ 21,009   $ 19,720
Service cost.......................................       590        503        179        157
Amendments and other...............................       220        846        -0-        -0-
Acquisitions.......................................       -0-      2,218        -0-        -0-
Interest cost......................................     3,506      3,529      1,663      1,539
Plan participants' contributions...................       -0-        -0-        108        108
Actuarial losses (gains)...........................      (125)     1,135      2,773      1,793
Benefits paid......................................    (4,334)    (4,344)    (2,329)    (2,308)
                                                     --------   --------   --------   --------
Benefit obligation at end of year..................  $ 50,564   $ 50,707   $ 23,403   $ 21,009
                                                     ========   ========   ========   ========
CHANGE IN PLAN ASSETS
Fair value of plan assets at beginning of year.....  $107,903   $106,570   $    -0-   $    -0-
Actual return on plan assets.......................    (3,071)     1,869        -0-        -0-
Acquisitions.......................................       -0-      3,808        -0-        -0-
Company contributions..............................       -0-        -0-      2,221      2,200
Plan participants' contributions...................       -0-        -0-        108        108
Benefits paid......................................    (4,334)    (4,344)    (2,329)    (2,308)
                                                     --------   --------   --------   --------
Fair value of plan assets at end of year...........  $100,498   $107,903   $    -0-   $    -0-
                                                     ========   ========   ========   ========
Funded (underfunded) status of the plan............  $ 49,934   $ 57,196   $(23,403)  $(21,009)
Unrecognized net transition obligation.............      (860)      (944)       -0-        -0-
Unrecognized net actuarial gain....................   (15,175)   (28,654)    (1,862)    (4,663)
Unrecognized prior service cost....................     1,974      1,982       (486)      (565)
                                                     --------   --------   --------   --------
Prepaid (accrued) benefit cost.....................  $ 35,873   $ 29,580   $(25,751)  $(26,237)
                                                     ========   ========   ========   ========
</Table>

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

<Table>
<Caption>
                                                                             POSTRETIREMENT
                                                           PENSION              BENEFITS
                                                     -------------------   -------------------
                                                       2001       2000       2001       2000
                                                     --------   --------   --------   --------
<S>                                                  <C>        <C>        <C>        <C>
WEIGHTED-AVERAGE ASSUMPTIONS AS OF DECEMBER 31
Discount rate......................................      7.25%      7.50%      7.25%      7.50%
Expected return on plan assets.....................      8.25%      8.25%       N/A        N/A
Rate of compensation increase......................      2.50%      2.50%       N/A        N/A
</Table>

                                        26
<PAGE>
                  PARK-OHIO INDUSTRIES, INC. AND SUBSIDIARIES

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- CONTINUED

     For measurement purposes, a 6.0% percent annual rate of increase in the per
capita cost of covered health care benefits was assumed for 2001. The rate was
assumed to decrease gradually to 5.5% for 2004 and remain at that level
thereafter.

<Table>
<Caption>
                                              PENSION BENEFITS              OTHER BENEFITS
                                         ---------------------------   ------------------------
                                          2001      2000      1999      2001     2000     1999
                                         -------   -------   -------   ------   ------   ------
<S>                                      <C>       <C>       <C>       <C>      <C>      <C>
COMPONENTS OF NET PERIODIC BENEFIT COST
Service costs..........................  $   590   $   503   $   561   $  179   $  157   $  150
Interest costs.........................    3,506     3,529     3,387    1,663    1,539    1,449
Expected return on plan assets.........   (8,658)   (8,599)   (7,062)     -0-      -0-      -0-
Transition obligation..................      (56)       23        63      -0-      -0-      -0-
Amortization of prior service cost.....      363       367       229      (79)     (79)     (79)
Recognized net actuarial gain..........   (1,720)   (2,574)   (1,132)     (28)    (243)    (255)
                                         -------   -------   -------   ------   ------   ------
Benefit (income) costs.................  $(5,975)  $(6,751)  $(3,954)  $1,735   $1,374   $1,265
                                         =======   =======   =======   ======   ======   ======
</Table>

     The Company has two non-pension postretirement benefit plans. Health care
benefits are provided on both a contributory and noncontributory basis. The life
insurance plan is primarily noncontributory.

     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:

<Table>
<Caption>
                                                            1-PERCENTAGE   1-PERCENTAGE
                                                               POINT          POINT
                                                              INCREASE       DECREASE
                                                            ------------   ------------
<S>                                                         <C>            <C>
Effect on total of service and interest cost components in
  2001....................................................     $  150         $  128
Effect on post retirement benefit obligation as of
  December 31, 2001.......................................     $1,505         $1,322
</Table>

     The total contribution charged to pension expense for the Company's defined
contribution plans was $1,382 in 2001, $1,418 in 2000 and $1,158 in 1999.

NOTE H -- LEASES

     Rental expense for 2001, 2000 and 1999 was $12,638, $12,816 and $11,814,
respectively. Future minimum lease commitments during each of the five years
following December 31, 2001 are as follows: $9,680 in 2002, $7,427 in 2003,
$4,585 in 2004, $3,525 in 2005, $1,985 in 2006 and $2,825 thereafter.

NOTE I -- INDUSTRY SEGMENTS

     The Company operates through three segments: Integrated Logistics Solutions
("ILS"), Aluminum Products and Manufactured Products. ILS is a leading 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, technology, industrial equipment, aerospace
and defense, electrical controls, HVAC, heavy-duty truck, vehicle parts and
accessories, appliances and motors, 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

                                        27
<PAGE>
                  PARK-OHIO INDUSTRIES, INC. AND SUBSIDIARIES

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- CONTINUED

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.

<Table>
<Caption>
                                                                  YEAR ENDED DECEMBER 31
                                                              ------------------------------
                                                                2001       2000       1999
                                                              --------   --------   --------
<S>                                                           <C>        <C>        <C>
Net sales:
  ILS.......................................................  $416,962   $482,274   $443,078
  Aluminum products.........................................    84,846    111,370    127,148
  Manufactured products.....................................   134,609    161,030    146,996
                                                              --------   --------   --------
                                                              $636,417   $754,674   $717,222
                                                              ========   ========   ========
Income (loss) before income taxes and amortization of
  goodwill:
  ILS.......................................................  $ 22,944   $ 42,118   $ 39,217
  Aluminum products.........................................    (2,327)     4,947     10,925
  Manufactured products.....................................   (14,287)    12,586     11,214
                                                              --------   --------   --------
                                                              $  6,330   $ 59,651   $ 61,356
                                                              ========   ========   ========
Amortization of goodwill:
  ILS.......................................................  $  2,702   $  2,506   $  2,336
  Aluminum products.........................................       745        739        739
  Manufactured products.....................................       286        662        761
                                                              --------   --------   --------
                                                              $  3,733   $  3,907   $  3,836
                                                              ========   ========   ========
Income (loss) before income taxes:
  ILS.......................................................  $ 20,242   $ 39,612   $ 36,881
  Aluminum products.........................................    (3,072)     4,208     10,186
  Manufactured products.....................................   (14,573)    11,924     10,453
                                                              --------   --------   --------
                                                                 2,597     55,744     57,520
  Corporate costs...........................................    (6,483)    (6,908)    (4,160)
  Interest expense..........................................   (31,108)   (30,812)   (24,752)
  Non-operating items, net..................................    (1,850)   (10,118)       -0-
                                                              --------   --------   --------
                                                              $(36,844)  $  7,906   $ 28,608
                                                              ========   ========   ========
</Table>

                                        28
<PAGE>
                  PARK-OHIO INDUSTRIES, INC. AND SUBSIDIARIES

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- CONTINUED

<Table>
<Caption>
                                                                  YEAR ENDED DECEMBER 31
                                                              ------------------------------
                                                                2001       2000       1999
                                                              --------   --------   --------
<S>                                                           <C>        <C>        <C>
Identifiable assets:
  ILS.......................................................  $312,288   $349,444   $343,522
  Aluminum products.........................................    95,021     99,208     97,717
  Manufactured products.....................................   139,045    164,524    170,267
  General corporate.........................................    45,813     34,942     18,637
                                                              --------   --------   --------
                                                              $592,167   $648,118   $630,143
                                                              ========   ========   ========
Depreciation and amortization expense:
  ILS.......................................................  $  8,441   $  8,096   $  7,710
  Aluminum products.........................................     5,532      5,145      4,929
  Manufactured products.....................................     5,632      6,379      5,864
  General corporate.........................................       306        428        195
                                                              --------   --------   --------
                                                              $ 19,911   $ 20,048   $ 18,698
                                                              ========   ========   ========
Capital expenditures:
  ILS.......................................................  $  1,972   $  3,126   $  6,046
  Aluminum products.........................................     3,160      7,302      4,963
  Manufactured products.....................................     8,352     14,190      8,904
  General corporate.........................................       439        350      2,737
                                                              --------   --------   --------
                                                              $ 13,923   $ 24,968   $ 22,650
                                                              ========   ========   ========
</Table>

     For the years ended December 31, 2001 and 1999, sales to no single customer
were greater than 10% of consolidated net sales. For the year ended December 31,
2000, all three segments of the Company had sales to Ford Motor Company which
aggregated $73,039 and represented approximately 10% of consolidated net sales.

     In 2001, approximately 88% of the Company's net sales were within the
United States, none of the net sales to any foreign country represented more
than 7% of the Company's total sales and approximately 91% of the Company's
assets are maintained in the United States.

NOTE J -- NON-OPERATING ITEMS, NET

     In June 2000, the Company's Cicero Flexible Products plant was destroyed in
a fire. For the year ended December 31, 2000, the Company received a partial
settlement from its insurance carrier primarily reflecting the replacement cost
of fixed assets, and recognized a net gain of $5.2 million. During 2001, the
Company expensed $1.9 million of non-recurring business interruption costs,
which were not covered by insurance. In June 2000, the Company completed the
sale of substantially all of the assets of Kay Home Products and recorded a
pretax loss of approximately $15.3 million.

NOTE K -- RESTRUCTURING AND IMPAIRMENT CHARGES

     During 2001, the Company recorded restructuring and asset impairment
charges aggregating $28.5 million primarily related to management decisions, as
approved by the board of directors on December 20, 2001, to exit certain
under-performing product lines and to close or consolidate certain operating
facilities beginning in January 2002. The Company's actions included 1)
discontinuing the businesses of Ajax Manufacturing and Castle Rubber, 2) closure
of the Cicero Flexible Products'

                                        29
<PAGE>
                  PARK-OHIO INDUSTRIES, INC. AND SUBSIDIARIES

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- CONTINUED

manufacturing facility and the discontinuance of certain product lines, 3)
inventory write-downs and other restructuring actions at St. Louis Screw & Bolt
and Tocco, 4) closure of 20 Integrated Logistics' branch warehouses (of which 11
were closed as of December 31, 2001) and two ILS manufacturing plants, 5)
closure of an Aluminum Products' machining facility, and 6) write-down of
certain Corporate assets to current value. The Company expects that the
restructuring actions will be substantially completed during 2002.

     The charges are composed of 1) $11.3 million for the impairment of property
and equipment and other long-term assets, 2) $10.3 million to cost of goods sold
primarily to write-down inventory of discontinued businesses and product lines
to current market value, and 3) $6.9 million for severance (325 employees) and
exit costs. Below is a summary of these charges by segment:

<Table>
<Caption>
                                                COST OF        ASSET      RESTRUCTURING
                                             PRODUCTS SOLD   IMPAIRMENT    & SEVERANCE     TOTAL
                                             -------------   ----------   -------------   -------
<S>                                          <C>             <C>          <C>             <C>
Manufactured Products......................     $ 8,599       $10,080        $2,030       $20,709
ILS........................................       1,700           600         4,070         6,370
Aluminum Products..........................          --            --           783           783
Corporate..................................          --           600            --           600
                                                -------       -------        ------       -------
                                                $10,299       $11,280        $6,883       $28,462
                                                =======       =======        ======       =======
</Table>

     At December 31, 2001, the Company accrued $4,152 for unpaid severance and
exit costs and recorded assets held for sale at their estimated current value of
$9,749 for inventory and $12,984 for property, equipment and other long-term
assets. Net sales for Ajax Manufacturing and Castle Rubber were $13,413 in 2001,
$16,298 in 2000 and $12,851 in 1999. Operating income (loss), excluding the
restructuring and impairment charges for these entities were $(1,179) in 2001,
$669 in 2000 and $136 in 1999.

                                        30
<PAGE>

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
        FINANCIAL DISCLOSURE

     There were no changes in nor disagreements with Park-Ohio's independent
auditors on accounting and financial disclosure matters within the two-year
period ended December 31, 2001.

                                    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

     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.

                                    PART IV

ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K

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

<Table>
<Caption>
                                                                  PAGE
                                                                  ----
   <S>                                                            <C>
   Report of Ernst & Young, LLP, Independent Auditors..........    19
   Financial Statements........................................
     Consolidated balance sheets -- December 31, 2001 and
        2000...................................................    20
     Consolidated statements of operations -- years ended
        December 31, 2001, 2000 and 1999.......................    21
     Consolidated statements of shareholder's equity -- years
        ended December 31, 2001, 2000 and 1999.................    22
     Consolidated statements of cash flows -- years ended
        December 31, 2001, 2000 and 1999.......................    23
     Notes to consolidated financial statements................    24
</Table>

   (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, incorporated herein by reference.

(b) Reports on Form 8-K filed in the fourth quarter of 2001: None

     SUPPLEMENTAL INFORMATION TO BE FURNISHED WITH REPORTS FILED PURSUANT TO
SECTION 15(d) OF THE ACT BY REGISTRANTS WHICH HAVE NOT REGISTERED SECURITIES
PURSUANT TO SECTION 12 OF THE ACT.

     No annual report or proxy statement covering the Company's last fiscal year
has been or will be circulated to security holders.

                                        31
<PAGE>

                                   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 28, 2002

     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.

<Table>
<C>                                            <S>                                         <C>
                      *                        Chairman, Chief Executive Officer and
---------------------------------------------  President (Principal Executive Officer)
             Edward F. Crawford                and Director

                      *                        Vice President -- and Chief Financial
---------------------------------------------  Officer (Principal Financial and
             Richard P. Elliott                Accounting Officer)

                      *                        Senior Vice President and Director
---------------------------------------------
             Matthew V. Crawford

                      *                        Director
---------------------------------------------
               Kevin R. Greene

                      *                        Director                                         March 28, 2002
---------------------------------------------
             Lewis E. Hatch, Jr.

                      *                        Director
---------------------------------------------
              Thomas E. McGinty

                      *                        Director
---------------------------------------------
            Lawrence O. Selhorst

                      *                        Director
---------------------------------------------
                Ronna Romney

                      *                        Director
---------------------------------------------
                James W. Wert
</Table>

* 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 28, 2002
                                          By: /s/ RONALD J. COZEAN
                                            ------------------------------------
                                          Ronald J. Cozean, Attorney-in-Fact

                                        32
<PAGE>

                           ANNUAL REPORT ON FORM 10-K
                           PARK-OHIO INDUSTRIES, INC.

                      FOR THE YEAR ENDED DECEMBER 31, 2001

                                 EXHIBIT INDEX

<Table>
<Caption>
EXHIBIT
-------
<C>        <S>
  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 Industries, Inc. (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      Indenture, dated June 3, 1999 by and among Park-Ohio
           Industries, Inc. and Norwest Bank Minnesota, N.A., as
           trustee (filed as Exhibit 4.2 of the Company's Registration
           Statement on Form S-4, filed on July 23, 1999, SEC File No.
           333-83117 and incorporated by reference and made a part
           hereof)
  4.2      Credit and Security Agreement among Park-Ohio Industries,
           Inc., and various financial institutions dated December 22,
           2000 (filed as Exhibit 4.2 to the Form 10-K of Park-Ohio
           Industries, Inc. for the year ended December 31, 2000, SEC
           File No. 333-43005 and incorporated by reference and made a
           part hereof)
  4.3      First amendment, dated March 12, 2001, to the Credit and
           Security Agreement among Park-Ohio Industries, Inc. and
           various financial institutions (filed as Exhibit 4.2 to the
           Form 10-K of Park-Ohio Industries, Inc. for the year ended
           December 31, 2000, SEC File No. 333-43005 and incorporated
           by reference and made a part hereof)
  4.4      Second amendment, dated June 30, 2001, to the Credit and
           Security Agreement among Park-Ohio Industries, Inc. and
           various financial institutions (filed as Exhibit 4 to the
           Form 10-Q of Park-Ohio Industries, Inc. for the quarter
           ended June 30, 2001, SEC File No. 333-43005 and incorporated
           by reference and made a part hereof)
  4.5      Third amendment, dated November 14, 2001, to the Credit and
           Security Agreement among Park-Ohio Industries, Inc. and
           various financial institutions (filed as Exhibit 4 to the
           Form 8-K of Park-Ohio Holdings Corp. dated December 14,
           2001, SEC File No. 000-03134 and incorporated by reference
           and made a part hereof)
  4.6      Fourth amendment, dated as of December 31, 2001, to the
           Credit and Security Agreement among Park-Ohio Industries,
           Inc. and various financial institutions
 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 Industries, Inc. for the year ended December 31,
           1998, SEC File No. 333-43005 and incorporated by reference
           and made a part hereof)
 12.1      Computation of Ratios
 21.1      List of Subsidiaries of Park-Ohio Industries, Inc.
 23.1      Consent of Ernst & Young LLP
 24.1      Power of Attorney
</Table>

                                        33