Welcome to the fourth quarter and full year 2011 results conference call. [Operator Instructions] Today’s conference is also being recorded. If you have any objections you may disconnect at this time. Before the conference call begins, please remember that the company will be discussing some issues that are historical and some issues that are forward-looking. When the company speaks about future results or events there are a variety of factors that may materially change their actual results from those projected. A list of relevant factors may be found in the earnings press release as well as the company’s 2010 10K filed with the SEC on March 9, 2011. The company undertakes no obligation to update any forward looking statements whether a result of new information, future events, or otherwise. Additionally, the company may discuss EBITDA. EBITDA is a measure of performance under generally accepted accounting principles and is considered a non-GAAP financial measure as defined by the SEC. The company may present EBITDA because management believes that EBTIDA could be useful to investors as an indication of their ability to incur and service debt and because EBITDA is a measure used under their credit facility to determine whether they may incur additional debt under such facility. For a reconciliation from the income before income tax to EBITDA, please refer to the company’s current report on the Form 10Q furnished to the SEC on November 9, 2011. Now, the meeting will be turned over to Mr. Edward F. Crawford, Chairman and Chief Executive Officer.

Welcome to the 2011 financial review of Park-Ohio activities and industries. I’d like to turn over the microphone to Matthew Crawford, the President and CEO of the company to review the 2011 results.

Thank you very much and good morning. I will focus my report principally on the Park-Ohio performance during 2011 and the fourth quarter and reserve further discussion on the FRS acquisition until later in the call. 2011 continued our company’s resurgence as almost all of our businesses improved relative to 2010 performance. Highlights included 19% revenue growth, 117% growth in earnings before 1 time charges, EBITDA at Park-Ohio Industries exceeding $80 million, the successful placement of $250 million worth of 10 year non-amortizing notes at a coupon of 8 1/8%, and cash flow before debt refinance charges of just over $25 million. Looking at business trends in the fourth quarter specifically, supply technology’s revenue grew by 12%, heavy duty truck continued to lead the way with power sports, automobile, and industrial equipment contributing increases in the growth rate as well. Looking forward to 2012, we expect this trend to continue as we focus on 3 important growth areas. Growing our international business with customers who we already support in North America which have grown rapidly in foreign markets where we already have a presence. Number 2, focus growth in the contract manufacturing end market which is seeing significant acceleration and has a proven need for our service. Number 3, increasing penetration of new product categories across our customer base most notably precision machine components, labels, and now through the addition of FRS extruded hose. Earnings during the fourth quarter in supply technologies increased just over 16% due largely to continued operating leverage enjoyed with the return of more historic sales levels. General aluminum sales and earnings in the fourth quarter were impacted negatively by customer production schedules during the holiday season and with new product launch costs which occurred as general aluminum prepared to ramp up for over 15 new…

Let me take a few moments and explain the thought process around the acquisition of Fluid Routing Solutions. This is a project that we have worked on for over 5 months and we decided we’d go forward with this particular transaction based on some very important availability of customers, these are very important aspects of the company short term and long term, #1. Expand the customer base, we’ve had in the auto sector particularly, a very strong position with Chrysler but this 1 will increase our relationship with Ford. It will have a major effect on our overall business model with General Motors and will bring to us a new and large account with Toyota. These are the types of our customers we like to do business with. Everyone is pretty optimistic about the next 3 years in the auto business and truck, at least the light vehicles. There is a lot of optimism in that particular sector, we at least share that with our aluminum division and most important, this is a company that has a proven record of cash flow and we think this acquisition is a value purchase of assets with considerable growth potential. This is a company that we feel that not only can -- we can grow with their current customers, but a very important part of it is this is a 2 segment business, 1 fuel filler business which is primarily anchored in supplying all the fuel filler components to a majority of platforms in our customers that I’ve mentioned, and the industrial extruded high performance hose business. We like this area, we like it very much, we have a great market entry through supply technology and there isn’t very many, but most of our customers that we’re currently supplying in supply chain management point of use concept use the type of hose that we are manufacturing currently in this company. Yes, it’s subject to Hart-Scott approval. We think that will come pretty easily, but this is a company, it’s our customers, we understand this market, we’re able to bring to our new supply chain management customers considerable new opportunities relative to the hose they use. If you’re building a lift truck you’re using a lot of the hose we can manufacture. If you’re building recreational vehicles, the same. S0, we’ve explored this with our customers, there’s a tremendous interest with us being there in this field able to make product for their production lines. So again, this is a very successful business but we’re really interested in the revenues this company will present, or the opportunities for the revenue enhancement this company will present to us in the next 3 years. And I thought I’d have Jeff Rutherford, the CFO describe basically how we fit the transaction up relative with our relationship to the various important bank groups.

As we disclosed, we will finance this transaction when it closes with cash and bank debt. Let me walk through very quickly how we’re going to do that. If you look at our cash position at the end of the year we had $78 million of cash. $61 of that was international and the remaining approximately $17 million was at Park-Ohio Holdings. What we’re going to do is we’re going to drop $10 million of the Holding’s cash down into industries to serve as the equity for the transaction. Then we will loan $30 million from our European treasury company back into the U.S. as a note subordinate to the bank debt. That’s important to note that this is not a dividend back in to the U.S., this is a loan into the U.S. and it will be interest bearing and amortizing. We’re modeling it on a 7 year amortization today. From a bank debt perspective, we will utilize $35 million of our current revolver which, just as a reminder, is at L plus 175. The borrowing base that we’ll bring in from the FRS transaction will supply a majority of that $35 million of that borrowing but there will be some use of availability. And then we’re going to add on a $25 million term debt that will be at L plus 275 that will also have a 7 year amortization. That will be collateralized in the machine and equipment and certain real estate of Industries. So similar to the term debt structure we had just there years ago. When we round it up, that’s $100 million of availability and cash to do this transaction. We ended the year with availability under our revolver just a little over $60 million. That’s actually up based on today’s borrowing base and today’s borrowing. We actually had added in the last couple of months another $10 million to that availability so we have sufficient availability, we have sufficient cash. We structured it so there isn’t any significant tax consequences of loaning that money back from Europe. As Ed mentioned, we had very strong support from our bank group to quickly approve this and finance this transaction.

Now I’d like to open the lines to discuss the 2011 operating results of the company and any questions on our FRS acquisition.

[Operator Instructions] Your first question comes from Ajay Kejriwal, FBR Capital Markets & Co.

It sounds a very nice, complimentary acquisition with FRS.

It fits in very well.

Maybe if we can start a little bit and talk a little bit more on the synergies and the opportunities that FRS brings in terms of what you could be doing with their products with your existing customer base and then vice versa what’s the opportunity with their customers? I know you talked a little bit about Ford and Toyota but what that could mean with some of the products you already have in your portfolio?

Well the products that we have in the portfolio, for example, in the auto sector obviously, this is going to enhance all these major auto companies growing interest in the aluminum side of the business and these are the customer we are currently selling and would like to sell more to. It will appear to them Ajay, as the company is committed to being in the auto sector as a major supplier across numerous platforms so we’re stepping out of the aluminum business and in a smaller degree the rubber business with Park-Ohio products and stepping into becoming a more important supplier to each 1 of these customers. There’s not 1 of these customers, because on the fuel filler side, it’s a pretty narrow market. There really are only 3 people that make -- and when I’m talking about fuel filler I’m talking about the next time you get gas self serve and you put the gas tank lever into the pipe, that’s what we’re talking about. We’re talking about the fuel systems from that part, that’s where we are positioned in all these autos in all the companies. It’s a very, very important supply base, it’s a narrow supply base, but it gives us an opportunity and because there isn’t 1 of the customer I mentioned in the auto side that this does not bring us up to a very, very high profile as a supplier and enhances the value to them of general aluminum and any parts of the current business that we are supplying to them out of those particular platforms. That’s on the fuel filler side. The more interesting side to us is the industrial hose side which is about 50/50 in the business. This company extrudes rubber hoses, are able to do all types of…

Any color on the aftermarket versus OE split? It sounds like it’s a nice opportunity for you to build into the aftermarket space.

Let’s put it this way, the fuel filler and current industrial business, consider that 50/50 in the volume. Let’s say there’s 3% or 4% of the aftermarket, but this company was going in the right direction. One of the problems is they had difficulties getting access to the markets, to the customers and you can see supply technology comes into this. The aftermarket business is something we will concentrate on and it will be a bigger part of its platform. And in fuel service, as things change, as hoses change or more performance in the engines are required, the more complicated the hose can be made and you just don’t go into this hose business. It’s lots of certifications and high performance, but the aftermarket -- nothing will grow faster in this specific company than the aftermarket but it still has a long way to go to catch up to the others.

And then any thoughts on cost savings and margin opportunity, anything you could be doing with sourcing?

We’ve looked at the sourcing. This is run by a very sophisticated experienced management team. Quite frankly and you’ve heard me say before, we like to go in and find things we can improve and things that are going to have an impact on it immediately. There is a little bit of that but this is a very well run company, it’s very successful, it is not broken. This is for the first time -- we’ve liked the idea of buying disabled assets, turning them around and turning them into cash flow companies. This is a great company already, we think it’s a tremendous value purchase, and more important, this is a growth opportunity. This is a company that can drive the company in the future relative to growth because it’s got so many platforms to go with particularly in the industrial hose side. It’s not broken and I would say this is a very good company run by great management and the long and short of it is we think we’ve got a value purchase here and assets that have tremendous potential growth and revenue enhancement. But that's what we're -- we’re pretty cautious about things like this but yes, we will buy a very good company, pay a fair price, particularly if it has a lot of growth possibilities and that’s what we’re really interested in here and quite frankly, what drove a decision. We would like to see the revenue in the company grow over the next 2 or 3 years and this is a place that can do it safely with free cash flow.

In your EPS guidance, what are you assuming for FRS in terms of accretion in that $3.00 to $3.10 number?

Sort of typical of how we’ve approached our business in the past, we’re not going to give guidance on individual segments.

So FRS, is that going to sit in supply tech or are you going to create a separate -- how is it going to be reported?

We’re not committed to anything yet but what we anticipate is, is we'll combine it with general aluminum, the aluminum products group to create a separate segment for the automotive group.

Obviously the aluminum business is a current segment. This will fit very nicely together with it and this segment will, just by the nature of it, will grow in size and grow in cash flow. But more importantly, grow in importance as a segment within the company for the customers. They will like the size of this, they will like the management. The 2 companies fit together very well and that’s kind of the thinking at this point.

Your next question comes from Michael Corelli with Barry Vogel & Associates.

Just following up on the FRS, can you give us any kind of color for what kind of multiple of EBITDA you might be paying or how we should be looking at their margins, or what kind of sales you might expect out of them in 2012, or anything to that affect?

From a sales perspective, what we’ve modeled in our guidance is closing this transaction as of the end of March, so effectively picking up 3 quarters of an ongoing sales number that we’ve provided. As far as earnings, it’s built into that number that Matt gave as far as guidance for ’12.

So you’re not going to give us any additional color?

FRS achieved revenues of approximately $190 million, that’s in the release so that’s the revenue side of it.

But nothing on the margins?

Not at this time.

Maybe we can talk a little bit about what’s going on in aluminum products? I think the loss in the quarter was a little bit larger than what I have been given the impression it might be in the fourth quarter. Can we talk about how that might play out in 2012? I know FRS will be integrated into that segment it sounds at this point but $2.9 million loss was higher than I expected in the fourth quarter. So how should we be looking at that going forward and what led to that loss being that substantial in the fourth quarter?

And I share your opinion that we’re behind our plan on that particular division but before I comment on it, I want to point out that this company in 2010 and 2011 has created free cash flow for Industries of $13,830,000 so this is not a broken company. This is not hurting us, it’s just not reaching its expectations as quickly as we thought. What we have is all the platforms that we talked about, which are numerous, more than 5, are still on strain. There has been a series of slowdown, the 1 particular part had to be reengineered so we’re frustrated as can be because we’re all set to go with all the platforms and they’re quite frankly about 6 months behind. Where we expected to get some help in 2011 hasn’t arrived yet. That doesn’t mean that it’s not, but while we’re waiting for it and a substantial increase in revenues over the next 3 of 4 years, and increase in EBITDA. We have the business, we’ve spent the money, just like anything else as you probably realize, there are more new cars coming out, and they are changing cars. The Koreans are making -- they're being forced to go from iron knuckles to aluminum knuckles, there is a lot of movement in this particular industry in the supply base. We’re just 6 months behind where I thought we would be but that doesn’t mean we’ve lost any initiative or any ground towards the revenues and the enhancement of EBITDA we expect to slate. There’s no reason other than its late. We’re carrying the full cost of being ready, and being up, and being able to produce the products. They’re coming but a lot slower than I’d like. So there is no answer, no excuse other than the fact is we’re ready, we spent the money, we’ve got the people, and we expect it to be running at a higher rate. We’ve employed the people, we’ve got a little short fall here between the revenue and our cost and that’s how it’s hurting us.

Any thoughts at this point as to how it’s going to play out this year? Again, I know that the FRS will be integrated with it but the aluminum products itself as this point, do you think it’s actually going to have an operating loss this year based on these delays?

No, it won’t. Number 1, it didn’t have an operating loss -- it had an EBIT in 20011 and EBITDA in 2011 so it had free cash flow in 2011, it’s just making less EBIT and less EBITDA than we anticipated but it’s not hurting the company, it’s not losing money.

So you expect positive EBIT this year?

Yes, we do.

I would imagine you’ll have losses early in the year?

It will ramp up during the year but they’re doing everything they can to mitigate any type losses. We had some costs come through at the end last year, some residual out of some platforms that we had converted off in the holidays and shut downs in the fourth quarter. The fourth quarter just turned out to be a little worse than we had forecast.

Jeff, just a couple of questions for you. One, how should we model book taxes and how should we look at cash taxes you think in the new year?

We’re finally going to be able to make book taxes a little easier for everybody to understand. As you can tell from the release, or maybe you couldn’t tell from the release, but you certainly pick it up in the 10K that the years of not recognizing US taxes. The good news is [indiscernible] and the bad news is coming to an end. So we’re going to start paying U.S. taxes in 2012. At the end of ’11 we reversed out the final portion of the valuation reserves on the net deferred tax asset so beginning in the first quarter we’ll be recognizing a normal tax provision for book purposes. We are modeling, without FRS, at 36% with FRS at 37%. That’s all contingent upon the mix of U.S. to foreign income sources. So what I’d tell you is to model it at 37% and then subtract out $5 million when you convert from book to tax payments for what’s left over of the NOL.

So your cash taxes on a full year will be about $5 million less than your book taxes?

Yes. I mean, there could be affects from deferred taxes but that’s the way we’re modeling it is pre-tax income at 37% to get to book tax provision less $5 million to get the taxes paid.

So that $3.00 to $3.10 you’re using includes that 36% to 37% tax rate?

That’s right, that’s right. You know, obviously our tax rate historically has been much, much less than that because we do not recognize book tax provision on U.S. earned income. So if you went back and you pro forma ’11 for 36% tax rate we’re at $2.00 a share. So there is some significant growth built into that not only from FRS acquisition but from our legacy businesses to grow on a pro forma basis from $2.00 to $3.00 or $3.10.

And then as far as interest expense, how do you think we should be looking at that going forward?

Let me tell you what we’re modeling in cash flows. As Matt mentioned, we’re looking at $105 on EBITDA, $26.5 approximately on interest, $15, $16 on cap ex, taxes paid around $16 and working capital around a $15 million use. We’re looking at somewhere in the $25 to $30 million range. What we define as free cash flow which is effectively is the change in net debt.

As far as debt free cash flow, that might be used to pay down debt?

It depends where the source is. If it’s U.S. it will go initially to pay down the revolver but we will have amortizing debt on the term debt, it will be 7 years and our own debt will be 7 years. We have some options obviously relative to our own subordinated debt. And if it’s foreign sourced cash flow it will remain in our treasury company in Europe.

At this time I would like to turn the call back over to Mr. Crawford.

Ladies and gentlemen I want to thank you, as I said to all the stakeholders, 2011 was a great year for the company. We expect to have a very positive year in 2012, but most important we believe strongly that the new acquisition FRS will be something we’ll talking about because it will really affect the revenue enhancement of the company over the next 3 or 4 years and that’s an important part of growing the value of the company for everyone. Thank you once again and have a nice day.

This concludes today’s conference. You may now disconnect.