Good morning, and welcome to the Park-Ohio’s Second Quarter 2013 Results Conference Call. At this time all participants are in a listen-only mode. After the presentation the Company will conduct a question-and-answer session. Today’s conference is also being recorded. If you have any objections you may disconnect at this time. I’d now like to turn the conference over to Mr. Edward Crawford, Chairman and CEO. Please proceed, Mr. Crawford.

Good morning, ladies and gentlemen, welcome to the Park-Ohio’s second quarter 2013 operating results conference. I’d like this time to turn over the call to the President and COO of the company, Matt Crawford.

Prior to doing that let’s have Scott cover some of the Safe Harbor stuff.

Thanks, Matt. Good morning everyone and thanks for joining us today. If you’ve not received a copy of our earnings press release you can find it on the Investor Relations section of our corporate website at www.pkoh.com. I want to remind everybody that certain statements we make on today’s call both during opening remarks and during the question-and-session maybe forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. These forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially from those projected. A list of relevant risks and uncertainties maybe found in the earnings press release as well as in the Company’s 2012 10-K filed with the SEC on March 15, 2013. The Company undertakes no obligation to update any forward-looking statements whether as a result of new information, future events or otherwise. Additionally, the Company may discuss EBITDA. EBITDA is not a measure of performance under Generally Accepted Accounting Principles. For a reconciliation of net income to EBITDA please refer to the Company’s recent earnings release. This time I’ll turn the call back over to Matt.

Thanks Scott. Good morning everyone. Thanks for joining us today. Overall, results came in just a little better than we report asking for the second quarter and consistent with our long-term performance expectations through normal business cycles. As we mentioned in May, our internal forecast did not recognize any favorable catalyst in our current economic environment and as a result, we knew we would start slow in the first half of 2013. While some of the improvements in the economic climate have slowed to materialize we are still expecting a better second half of 2013 compared to the first. Our revenues and earnings improved year-over-year, we are especially happy to see sequential improvement in the second quarter after a very sluggish first quarter. Now let’s look at the second quarter 2013 performance compared to the prior year. Net sales increased slightly in the second quarter to $309.4 million compared to $308.8 million in the prior year. On a sequential basis, revenues increased 9% compared to the first quarter. Our revenues are relatively flat year-over-year due to current economic sluggishness in some of our end markets, the increase on a sequential basis is primarily attributable to volume increases in supply technology segment and some lead component segment. The gross profit margin percentage was 18.8% which is a 70 basis point improvement when compared to the 18.1% gross profit margin in the second quarter of last year. This improvement is largely due to a change in the sales mix between the two periods. Consolidated SG&A expense increased 13% from $29.5 million in 2012 to $33.3 million in 2013. SG&A expense has a percent of net sales were 10.8% compared to 9.6% in 2012. The increase in SG&A expense is primarily attributable to the timing of certain self-insured employee medical expenses, increases in…

Thank you very, Matt. Okay, I would like to turn over the conference to the attendees online with questions. Operator, are you there?

Sorry, yes. (Operator Instructions) Your first question comes from the line of Ajay Kejriwal (FBR Capital Markets & Co). One moment, sorry, your line is open. Ajay Kejriwal - FBR Capital Markets & Co.: Thank you, good morning.

Good morning Ajay, how are you today. Ajay Kejriwal - FBR Capital Markets & Co.: Good. For a minute I thought I lost you.

You found us once. You will never going to lose us I will assure that. Ajay Kejriwal - FBR Capital Markets & Co.: That’s what I expect. All right, good. Good to see you reaffirm the guidance this morning, so that’s helpful. Maybe if you can spend a little bit time on the industrial equipment business, the trends that you saw in the quarter and then I thought Matt, you talked a little bit about the strength in the second half, so maybe provide a little bit more color on what discussion you are having with customers, what’s the activity that you are seeing in the backlog?

Sure, Ajay. We as you forecasting our industrial equipment group can be a bit of a challenge. We target in that business 50% revenue split between original equipment and aftermarket. Typically we have found that considerable activity in the aftermarket is a good sign as it relates to equipment orders. What is, probably surprises us, we have seen very, very strong aftermarket now for over a year and the original equipment market has been a little slow to respond. Having said that as I mentioned in my comments we are seeing lots of quoting activity, increased quoting activity but what we have seen is general trends, one is ongoing significant softness in some of the European and Asian markets, number one. Number two, a key end market in steel till being soft. While steel is a significant end market for us or an important end market. It is a significant end markets for the new equipment business. So, aftermarket can often be, it’s an important aftermarket too but it is – can be more significant share of the new equipment business. So, those two headwinds I think have caused people to be just a little more cautious as they think about allocating capital for expansion despite how active their businesses are. And I think it’s a theme we see here, so I can understand where people are coming from. We are focused on equipment investments that increase productivity and have assured pay backs with the exception of general aluminum we are very cautious about true expansionary dollars. So that mindset still exists. And I think as – pension on the age old relationship between aftermarket sending signals for strong growth on the equipment side. Having said that, it will happen and I think that every month it goes by, I think we have a better chance of seeing a pick up in that revenue and it’s supported by significant increased quoting activities. So, there is some risks, you have identified a risk in our (point) and our forecast for the year unquestionably and but its one in which we think we can manage. Ajay Kejriwal - FBR Capital Markets & Co.: Good. So that’s very helpful. Maybe a little color on assembly components margins came in better than (by rework). So, any color there what drove that improvement, is it the inclusion of bates, sounds like aluminum business also did better, so just a little bit more color there. And then your expectation in the second half is double-digit kind of, how we should be thinking about margins there?

Let me just talk about the revenue side of the picture then maybe Matt will want to comment on the margin so forth. Just revisiting the sales we have talked about, the new sales of approximately $125 million that we are even bringing on line. That was three different platforms. And the first platform to come online of course was the Dart followed up by the now developing product line or ramping up now for the Jeep Cherokee which in fact we have a much better feeling of historical sales. The Dart was a tremendous investment by Chrysler and it hasn’t received or it hasn’t had the volume that we anticipated or they anticipated off the serial model at that point. So far, so the revenues would have increased more dramatically except to the slowdown or the slow start of the sales of the Dart has been very specific but it’s important when you are taking platforms in these major auto companies that you select the right one. The (inaudible) frankly has been readdressed from the standpoint of transmission and apparently the power. So, we expect it to increase you can see that they are doing tremendous amount of effort to get that volume up of the company. The platforms are – they are having a great success across all the platforms. I think those solved the Dart problem, if as they -- some perceived under power in the transmission. They surely investing it. They have millions and millions of dollars in this platform. So, all of us that are varying the supply base are suffering a little bit relative to the initial volume but as we speak the new platform, the second platform number 3 which is connected to the Jeep Cherokee, which is a more predictable product line historically. So, it could have been better and Matt, do you want speak to the margins?

Sure, Ajay. One of the things we need to be -- the second quarter was extremely good quarter for both our fluid routing business and our plastic and rubber business. So, since that represents the lion share of the segment earnings that was a really, really positive story by a team which is executing there very well as it relates to not only quality of earnings but also in terms of -- as you mentioned the small acquisition or two. So, we do have and I know we mentioned it before some program for rolling off at FRS which will negatively impact the second half. So, the FRS business in particular has, which has been performing extremely well, although there are some headwinds in the second half which kind of like our general comment about our consolidated past. So, I have no concern that we will able to manage that, Ajay, I know you’ll remember those business offers were imbedded at the time of the purchase. So, we are fortunate enough to hang on to those as long as we did but they will cause a little bit pressure in the second half. Ajay Kejriwal - FBR Capital Markets & Co.: Got it. So, the double-digit that we saw is something that was nice in the quarter but it’s more the normal rate of margin that we should be thinking about for the rest of the year, is that right?

No, no. I think it’s going to be a lot. The margin is going to have a lot to do with how quickly we see, this segment is going to have to become more balanced from a margin perspective and to the extent we see improvements at general aluminum and I think the earnings margins are the kind that we should expect although that balance is going to be interesting over the next two quarters. Ajay Kejriwal - FBR Capital Markets & Co.: Good. And then one more from me before I pass it on. So, Ed on the long-term goals that you talked about a few months ago, is there any update in terms of either the work that’s being done internally towards achieving those goals or in terms of newer metric that you are willing to share on what that top line goal could mean in terms of margin improvement and such?

Ajay, we are still committed to what we call the N5 plan that’s reaching $2 billion by 2017, which is a combination -- the math is 12.5% per year, quite frankly, before we announce that what appear to some is aggressive. The company had gone over 11% over the long, long sustained period of time. So, 12.5% and we think in terms of for all practical purposes 6.5% and 6.5% or 5.5% or 5%. But, we think that the combination of organic and through acquisitions and when I talk about acquisitions as you know we’re talking what we feel are bolt-ons acquiring companies that fit right into one of our current platforms. We’re not going to buy hotels. And so number one, we have a portfolio potential bolt-ons that we pursue on a full time basis. And as far as organic growth, we’ve talked about obviously the organic growth but we anticipate substantially in the aluminum or the assembly component parts of it. And quite frankly, we are starting to get traction in the cross-selling between the supply technologies and our rubber and plastic business. So, we feel strongly that we’re on goal relative to accomplishing that. And I think my comments, I’m excited about the opportunities that when you’re out there, talking about going in and out there talking about the organic accomplishments and acquisitions -- how do you work at that particular goal, the more opportunities to present themselves. So, I think we are right there. Ajay Kejriwal - FBR Capital Markets & Co.: Good. Thank you very much.

Thank you very much.

Thank you. Your next question comes from the line of Steve Barger from KeyBanc Capital Markets. Your line is open. Steve Barger – KeyBanc Capital Markets: Hey, good morning guys.

Good morning, Steve. Steve Barger – KeyBanc Capital Markets: Sorry about the background noise, I’m on the road. I just have a couple of quick questions. I agree it’s good to hear you, we, from the guidance. If I annualize your first half results, it’s about 3.70. So, is it reasonable to think given your view that the back half gets stronger that, that you’re pretty confident that in the mid-point or higher of the guidance range?

All right. Steve, I’m not sure, I would have given some of the moving parts and as we discussed in the past that relatively few number of outstanding shares, I’m not sure, I want to say more than we’re very comfortable with that mixed one. Steve Barger – KeyBanc Capital Markets: Okay. Some of momentum that you talked about in Supply Technologies in terms of the truck and the power supports, has that continued into the quarter and is there any notable increase in some of the other end markets that you guys service, you look at how go-through is happening Supply Technologies?

Yes. As you know that’s a pretty comprehensive set of customers we’ve highlighted some that we feel are have the potential to improve in the second half and we’re seeing some support from most notably a little bit from truck. Having said that, it is, I think, we measure our business on a couple of different ways most importantly average daily sales. Certainly we expect a little bit of additional support there and momentum in the second half. Having said that, the third quarter traditionally had less ship as you know. So, I would want to highlight that we expect things to improve both from a new business standpoint and from a little bit of less from the economy in the second half and some key markets but I would like to characterize that as overly significant. Steve Barger – KeyBanc Capital Markets: Okay. You gave a good explanation about the SG&A increase in the quarter, talking about some of the compensation another things, I just was curious, is there any non-recurring, any diligence costs or anything like that in the number that might come out in the back half and just how should we think about the dollar levels in the next couple of quarters?

I will let Scott comment more specifically on the dollar levels. But what I would tell you Steve is, wildcard in the second quarter results and often can be is managing medical expenses. And I got to tell you, we expected this year and I think we’re seeing an increase in medical cost. So, I think we’re managing them well and doing what we do but when you try and really break apart our SG&A numbers that has been a trend which I think we felt from a balance sheet perspective a little more meaningfully in the second quarter.

Yes, I would tell you, Steve. There was really not any large single one timers in the second quarter that you might back out but looking at total revenues, I think somewhere in the mid 9%, no, 9.5% of revenues might be good gauge for you. Steve Barger – KeyBanc Capital Markets: Okay. That’s great. And the Bates acquisition last quarter, any update on how the integration going, has there been any positive surprises there or just how you are thinking about the properties since you have it in the portfolio now?

Yes, I think the Bates acquisition is as we indicated at the time is, with a nice bolt-on to our existing rubber and plastic business and we felt there were some synergies and we are hitting our plan.

It’s Ed Crawford. I think like that particular acquisition and looked that as kind of the profile of what we look for. It’s very important that we understand that we kind of look to be number one new customers. We look at the number two business being really understand, number three, we looked at the fact that if you are in the rubber business and you or plastic business, you inquired someone in a similar business, we normally will get some ultimate increase in margin and profitability because of buying. So this is a wonderful plant located 40 miles from our other plant. So our regional management group in the plant we own now is responsible for this plant, there is consolidation. We are buying rubber in higher quantities that’s an advantage. And most important we got a lot of new customers. So, every single time we make an acquisition, what we call a bolt-on there is certain characteristics of that plant that are important to us. Because we expect to buy a value but more importantly we expect to be able to increase the margins due to things that we have come to experience and analyzing and seeing in the acquisition process. So we really have a pretty tight view of bolt-on and Bates is a perfect example of what we hope to continue to do as we strengthen the company towards the N5 goal. Steve Barger – KeyBanc Capital Markets: Sure, and that’s simple on the subject. How was the slate of acquisition target (assets) that meet that criteria, are you continuing to find attractive candidates that you can do some work on, to see if that’s set into the portfolio?

Well, it’s interesting we probably have never seen more opportunities that doesn’t mean better more opportunities. And its important that again in our strategic plan, we happen to think Europe has interest because they have got a lot of problems over there and a lot of businesses that are pretty historical with good companies and something that would have traded at 7x and 8x earnings. That’s not the case any more. They can’t finance over there. They can’t borrow money over there. They don’t have capital over there. And some very good businesses pop up. They want to start it with multiple of 7or 8 and of course, we are not interested in that that means it’s not accretive, we are not just not part of our bolt-on process. So, we see a lot of opportunities but and we process them in. As you know, we are not embarrassed to buy a company that’s got $10 million if it’s a plug in or something larger. And but these have the nice size, we like them. But, lots of opportunities, not quite frankly more people on the street but you have to really look deep and but the quality companies over a period of time especially its tight as it is right now. And it’s hard to be up there. But, we love the industrial diversification of the company. So, we got a lot of acquisitions opportunities. We just have to be smart and pick the right ones. Steve Barger – KeyBanc Capital Markets: All right. Thanks for the color. And I will get back in line.

Thank you. Your next question comes from the line, I’m sorry if I pronounce your last name wrong but it looks like Matt Vittorioso from Barclays. Your line is open.

Matt Vittorioso. That was pretty close. Good morning, guys. And congratulations another –

Good morning, Matt.

…another good quarter. Just on the back of the most recent question, you talked about having gotten your leverage down below 3x on a net basis, always out there looking for decent acquisitions. But, what’s the target on a leverage front, you look to keep it below 3x, I mean, you have been pretty disciplined in what you paid for acquisitions maybe just sort of talk about, your thoughts on leverage?

Matt, hey, it’s Matt Crawford. I think that we are first and foremost evaluate opportunities since we allocate a significant amount of our investment dollars either to post synergy very reasonably priced acquisitions bolt-on and since we allocate the good portion of our organic growth capital to productivity investments and things with pretty near term paybacks. And we don't necessarily think that when we incur what we invest capital that they will be – that the imaging to our goals. In terms of a goal, so, as we grow, I already made that point is that I want to support the thinking that hey we can grow and still not leverage the Company meaningfully. But certainly, we would like to see our leverage ratios, we have accumulated a little bit of cash but certainly we like seeing that net-debt ratio, in the 2s that’s great. Certainly depending on how it works, my catch is, how it is scaled. We think about our leverage somewhere in between net and gross and having 2 in front of that or is a pretty nice place to be. It allows us I think to be that the margins slightly more aggressive but certainly we feel, we can manage the business appropriately south of 3. So, that doesn’t mean that as you know we wouldn’t take opportunities that we see them at a slightly higher level but once again, we don't see those as necessarily being leveraging moves.

One additional comment to that is, the acquisitions we are looking in the profile, I think that’s important, it should be important to everyone what we mean by a bolt-on and what we mean about our view of acquisitions because we are going to have to make a few to our reach out $2 billion, our N5 goal. The type of acquisition is part to that, I think its worth mentioning is that historically where five years ago we acquired a company which we would consider a turnaround, okay. We’re kind of out of that business, we are now are talking about go buying companies that we immediately could -- are profitable and can be more profitable after our business approach is put in place. That’s one thing that pushes off the leverage quickly, we might leverage up there for a moment there but historically we clearly understand and there are is a difference between buying a company and improving the earnings versus taking the company and turning it around and it might be a greater investment on plan one. But we’re not in plan one anymore we’re in plan two. So we buy things that are operating or profitable that fit in and have all those characteristics. And the only really kind of exception to that has been recently is the aluminum business where you have the front end load, the CapEx to get the volume and you have the expenses. You take the order. You got to invest the money. You got the CapEx. You got to get in place and then a year later, 14 months later, in comes the revenue on the profits. So, when you are investing in aluminum business as we have you can -- it might look like you’re spending money and you’re getting no relationship between as how much money you’re spending and how much the EBITDA goes up. So, there is a drag in a couple of these businesses of like supply technology where you take a customer, it’s a new customer and it’s $50 million or $40 million. You have to clip the working capital of $15 million in advance. And then a year later, its starts, you’ll get the return. So, this is built into and hopefully these thoughts are important to everyone because it’s a lot of discipline to the two subjects, I just talked about.

Got it. That’s helpful a color. I appreciate that. And then the one segment, I know we talked about it at some length on this call. But the engineered product group obviously when that thing gets going, you can really see some good improvement in EBITDA. And there is a number of different products being produced or manufactured in that segment. Is there anything you could say as far as like what’s working well right now? What products are you seeing decent demand for maybe what and products that have done well in the past are still kind to lagging, any deeper detailed color on that segment because again when it gets going, it can be a pretty big piece of your EBITDA?

Yes, I talked a little bit in my accounts, we have been working, maybe I can highlight a little bit more about what is working. I think there is a -- forge group continues to be a high point relative to the performance that as you know we focused there on aerospace and rail products and we’ve done well there. So, that’s been a consistent performer for us. Incrementally, it didn’t show a lot of improvement year-over-year just because the darn thing is doing pretty well. So, I think that, also what continues to do well in the aftermarket part of the business in the equipment space that continues to do well. And then I think on, I picked on, I think what’s the negative parts of the original equipment business but what I will talk about that maybe is doing well is certainly North America. North America and particularly in products related to (inaudible) smaller orders are not necessary orders that I would call capacity building but certainly those types of orders that support productivity improvements and customers that might for example be in the auto space would be a good example. So, there are some good stories and I talked unfortunately about the headwinds in the international markets and particularly steel but there is some positive stories there too particularly in North America and in terms of smaller more productivity oriented purchases.

Okay, great. And for the back half of the year, I mean, should we expect margins that look like Q1 or more like Q2, I know you said that I think the back half would be better so maybe we are trending back towards 15%, 16% margins in that segment or what are your thoughts there?

Well, we anticipated that I mentioned a couple of times in the call. We anticipate some improvement in the order book, on the equipment side. So, the rest of it is doing pretty well, if we can get some level of large order activity in the second half, I think that we should be, whether it would be in the oil and gas end markets or a little research in steel or rubber getting to see some quoting activity again. That would be a pretty, pretty sound money because to be honest with you this management team in that business particularly in the equipment business has done a hell of a good job managing a big business with the global footprint without getting those big orders that categorically absorb a lot of overhead. So, these guys are doing a nice job and we can get a little wind in our back with a few big orders that would be awfully beneficial to our margins as well.

Okay, great. Thanks and congrats.

Thank you very much.

Thank you. Your next question comes from the line of Jay Harris from Axiom Capital. Your line is open.

Good morning guys.

Good morning, Jay, how are you today?

Very good. I’m wonder if you could provide us with a little discussion in terms of supply technology about the vertical markets seasonality and where you need to grow the business in a significant sense, which vertical markets are you looking at?

We don't really get (this type) of question because I think we used to and still focus to a large extent on looking at key end markets and using institutional valet share of how to expand among that competitor base. We still do that. But candidly, where you would see most of the energy today relative to our sales group is to focus on two other agendas which I think are more impactful in the medium to long-term, meaning 2014 and 2015. Number one, I would tell you that. We are seeing focusing on the introduction of new parts to our key customers. We talked a lot about the introduction of some of the hose assembly et cetera that’s coming and it’s a good margin business. Secondly, we talked a lot about leveraging our domestic relationships with key customers in Asia and Europe. That is an interesting opportunities for us again because it is unique. We live in a world where North America we’re a premiere supplier, but there are competitors. There are very few competitors that can go in the front door of a major OEM and say we can supply you anywhere in the world, you’re doing business or to your supply base or contract manufacturers. So, those are the themes that I think that we’re focused more on right now and those are going to be the significant drivers of our growth path, maybe not a significantly by 2013 but certainly would be a significant as we move forward.

You mentioned in your earlier remarks that ag and truck business were important in your -- in the second quarter do they stay strong in the third and the fourth quarter or is there a seasonal decline here, add some color to that?

Well, certainly as it relates to truck as I indicated. We expect a little bit of help there. Truck was very strong in 2012, sequentially we’re seeing some improvement as I discussed in my comments. Ag is a little more difficult because there is some seasonality there. Obviously the late winter in the spring is an active time particularly for those that are more on the residential and commercial lawn care and so forth. So that one I think you will see some seasonality. Obviously, we hoped off some of that with typical seasonality and some of our IT hardware business which tends to do well towards the holiday season and so forth. So, baked in these numbers, there is seasonality Jay as we’ve discussed in the past, having said that somewhat by strategy somewhat maybe by luck, we balanced that pretty well over the years.

You’re running at about of $500 million annualized rate in supply technology, where do these new thrust hose assemblies, new parts expanding with some of your customers into the Asian region, where could that drive the revenue base?

I believe, we’ve talked comprehensively about our long-term, our five year plan taking the business to just over $2 billion.

Obviously at supply technology?

And I guess what I would be willing to tell you is, we expect supply technology to be able to track to that goal.

Okay. Thank you.

Thank you.

Thank you. Your next question comes from the line of John Baum from Park-Ohio Shareholder. Excuse me and your line is open. John Baum – Park-Ohio Shareholder: Good morning, guys. How are you?

Good morning.

Good morning, John.

I want to congratulate you on your year end debt levels; I know you guys have been working very diligently on that. A question on the, year-end debt levels, is that going to be -- is that harvesting of receivables or inventory pay down or is that kind of a long-term goal or leave it right there?

Our fourth quarter, we do expect to build a little bit of working capital but if you go back to some of Matt’s opening comments about operating cash flows, our business generates strong operating cash flows close to earnings. So, that will continue. That’s what is driving cash position that we’re building to at end of the year.

Very good. Thank you. And final question, probably to Eddy, as you look at your five year plan right now in terms of the major industries would this be a layout on the overall footprint business or are you looking focusing still auto and oil and gas or what type of drivers will it be in the industry to achieve that five year plan? And again, congratulations on good quarter and a good year. Thanks guys.

Simply, we expect all of the operating units to participate in reaching the goal. This is not about one particular unit, maybe, it will be winners relative to, if you want to classify that way as we move to the $2 billion but every unit, the forging unit, every business unit in the company expect to grow at that 12.5% combined organic and acquisition rates. So, it wouldn’t be one success, it will be a lot of successes and this is very important culture here that everyone expects to do the same and no one is looking over the shoulder, hoping the other person is going to win for them. So, I feel good about the results because I believe in our people and we have proven track record of reaching what we stated our goals and that’s due to the ability of our individual operating units. I like decentralization. I like our industrial base. I like the fact that we are diversified. I like the fact that we have customers worldwide. And we have got a lot of touch points that gives us an opportunity in every corner to be successful in reaching that goal.

Thank you.

Any other questions?

There are no further questions at this time. Mr. Crawford, I turn the call back over to you.

Well, thank you very much on behalf of the company and all the stakeholders and employees. We thank you for your support and we are leaving the conference room and having our annual picnic here at Corporation today, which I think is important to share our successes with all the people that really make it happen. Thank you very much. Look forward to speaking with you and seeing you in the future.

That concludes today’s conference call. You may now disconnect.