Good morning, and welcome to the Park-Ohio Second Quarter 2015 Results Conference Call. At this time all participants are in listen-only mode. After the presentation, the company will conduct a question-and-answer session. This conference is also being recorded. If you have any objections you may disconnect at this time. I would now like to turn the conference over to Mr. Edward Crawford, Chairman and CEO. Thank you, sir. You may begin Mr. Crawford.

Good morning ladies and gentlemen to the Park-Ohio’s second quarter 2015 conference call. I’d like to take this opportunity to introduce Patrick Fogarty, our CFO to read the Safe Harbor Statement. Pat?

Thank you, Ed. Good morning. Before we get started, I want to remind everybody that certain statements we make on today’s call may be 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 may be found in the earnings press release as well as in the company’s 2014 10-K that was filed with the SEC. Additionally, we will discuss as adjusted earnings and EBITDA. As adjusted earnings and EBITDA not measures of performance under Generally Accepted Accounting Principles. For a reconciliation of net income to as adjusted earnings and for a reconciliation of net income to EBITDA as defined, please refer to our recent earnings release. Now I’d like to turn the call back over to Ed.

Thank you, very much, Patrick. I would like to turn the lines over to Matthew Crawford, President and COO of the company and President. Matthew?

Thank you, and good morning. I want to start by saying how excited we are to set two new company performance records as of June 30. First, we set a new record for quarterly revenues of $377 million and second a new EBITDA record of $67 million for the first six months of 2015. We attribute these records to strong diversified portfolio businesses combined with tight expense control in the phase of continuing challenges in the few of our end-markets. Our U.S. GAAP earnings in the second quarter of 2015 were $1 which was equal with earnings in the second quarter of 2014 an up $0.13 or 14.9% compared to the first quarter of this year. Our as adjusted earnings increased $1.04 per share - increased to $1.4 per share compared to $1.02 per share in the prior and up $0.11 or 11.8% compared to the first quarter of 2015. EBIDTA as defined was $34.1 million in the second quarter compared to $32.7 million in the second quarter of 2014 and $33.5 million in the first quarter of 2015. Let’s begin our detailed discussion of second quarter results with revenue. As mentioned a few moments ago, net sales increased approximately 10% to a quarterly record $377 million compared to $343 million in the prior year. The revenue increase is attributable to each of our three business segments, approximately $29 million of the net sales growth is attributable to acquisitions and the remaining net sales growth is attributable to organic growth primarily on our supply technology segment. Gross profit earned in the second quarter was $60.4 million compared to $61 million in the second quarter of 2014. The gross profit margin was 16% in the second quarter of 2015 compared to 17.8% last year. The decline in gross margin is largely…

Thanks Matt. Again, I think Matt’s covered all the aspects of the company. Clearly, very excited, really excited here as the company continues to demonstrate as being a diversified industrial company particularly international content is works for the company long-term. The diversity of the business, the customers, is very, very important. And it’s like a good orchestra, sometimes it’s just perfect, sometimes it’s not. But we feel very, very good about the future and our continued investments. So, why I think it’s particularly interesting, in fact, I’d like Pat Fogarty, the CFO - our CFO to comment on some of the things that are happening in Italy in this recent SAET investment. And we’re very, very excited about. Pat?

As Ed and Matt have stated on previous calls, the acquisition of SAET was very strategic to our induction business but it was a turnaround situation. During the first half of the year, many operational changes needed to be made in our plant in Italy, including leadership changes and plant floor process changes. In addition we worked on reducing our SG&A costs which was a major initiative. So far this year, we’ve stabilized the customer base, the vendor base as well as the employees of the business. Our profitability in the six months of the year was less than what we had planned, primarily as a result of foreign currency matter that Matt had discussed earlier as well as the restructuring that took place. We continue to see operating income improve every month and we’re optimistic that the second half of the year will be more in line with our business plan and more in line with traditional margins in our induction business.

Thanks Pat. Okay. The company is now prepared to answer any questions regarding the performance in the quarter or year-to-date.

[Operator Instructions]. Our first question comes from the line of Steve Barger with KeyBanc Capital Markets. Please go ahead with your question.

Hi, good morning. It’s actually Ken Newman on for Steve.

Good morning Ken.

Good morning. So you mentioned that Engineered Product did have a revenue increase and we know that your oil and gas business is off a lot. And maybe you mentioned this in your prepared comments but I didn’t catch it. What products drove the year-over-year increase in sales?

Ken, hi, it’s Matt Crawford. How are you?

Good, how are you?

Good. So, we continue to see pretty strong global efforts in the automotive business which is indirectly a beneficiary of our induction heating product line. So, relative to infrastructure plays, whether there would be transportation plays of the nature of automotive or aerospace or anything like that. Induction is a key equipment product line and one in which has driven sales. Unfortunately those don’t tend to be extremely high margin on a relative basis. But they have been robust in the sales side. That’s both from an organic standpoint and from an acquisition standpoint. Obviously our SAET acquisition is the single largest contribution to that increase. SAET is in the induction space and is also focused on automotive. So, across the board that’s been a driver. Got it. And then since you brought up automotive, I mean, can you talk about what you’re hearing from customers about auto production, any notable positive changes or negative as you look into the second half?

Well, let’s say, one of the concerns or excitement of what’s applying the auto industry particularly, domestic or anything free is which cars are selling. We just happen to be on some great platforms. They’re really outperforming in the market. And that can be good but it’s diversity of the number of platforms you have is critical aspect of running that business long-term. So, we’re pleased to have been selective and are currently supplying across the spectrum of the victory and others, a number of components for some of the, what you call it hot cars.

Ken, I would also add this is Matt most of our automotive business now is global. And we spent the money doing that, I mentioned in my prepared comments. We’re currently building out fuel delivery capacity in both Mexico and China, plastic and rubber capacity that’s solidified in Mexico and China. So, we are positioned very well in the global markets. So, while we do tend to talk occasionally about sort of NASA production targets that’s not where we’re focusing our energies and not where we’re see disproportionate amount of our growth. So, I guess my answer to you is, I think we’re seeing a strong NASA production marketplace and then GM came out with an above average number last week, in excess, well in excess of I think the other two OEMs. But once again, our growth opportunities aren’t just here, they’re just proportionately outside the U.S. as well where we’re still gaining market share.

Understood. And then, I guess just a follow-up to the follow-up, can you talk about the Autoform integration and what you’re hearing about the adoption of the gas injection or other fuels, SG technologies, any change to pace of adoption or design progress of the automakers?

Yes, Ken, this is Matt again. We continue, now we’re partnering with Tier-1s there. And we think we’ve got great partners. Our products today disproportionately end up at General Motors where we are the significant supplier. And I can tell you that, well it’s a bumpy road in terms of product adoption and some of these are new designs. So it’s a little bit of a Rubik’s cube in terms of what products are being launched where. I can tell you that the business we expected to acquire and the growth pattern we expected is on track. And I can also tell you that the once again, the opportunities are significant for expansion into China. And I would be shocked if you didn’t hear from us in the next couple of calls about another incremental investment in Asia based specifically on the Autoform fuel business.

Understood. Any update on the CFO search?

That process is yet, that process has begun. But we’re fortunate enough to have Pat Fogarty here who is in the last six or seven years is posted in this position, or filled this position twice for us. So, the momentum, we haven’t seen any loss in momentum in controls and discipline. So and Pat’s been with us for some 15 plus years or 18 years probably in his line and maybe 20. But he’s worked with me in acquisition. So, everything is going great. We’ll get around to that. We’ll get around but we’re still operating on, all stronger this year.

Got it. And then, just one more from me and then I’ll jump back in queue. You had COO for several months now. Can you talk about what his first impressions are and how he’s prioritizing his time?

I’ll turn it to right over to Darryl Niven, this is real live stuff. Darryl, why don’t you answer the gentleman’s question?

Good morning, Ken. Now, just from an overview from my perspective, we have a tremendous diversity of businesses. And like any place you go you have very well operating units and some that are at a lower level. From my perspective you can find very well units there, very well run units in all the different sectors of the business. So, we always have the 80-20. And what I mean by that is you have 80% of your plans doing very well. And we’re looking at plants which are under-performing and focusing on those. I think this from a specific standpoint it really had a lot of focus on the aluminum business and we’re starting to see significant momentum overall in regards to operational performance. I think in the automotive components group, we have some of our best facilities in the organization. And it’s great to see as far as sharing of best practices from getting people on-board to understand where we have the best operations in the company. But overall, I think the majority of plants are performing very well. And what we’re trying to do is look at how we can leverage those in our international operations. We have some very good running business whether you’re talking about rubber products or even the fuel rail. And looking at how we take the best practices here in the United States and move those to the international locations. And one of the keys is to truly understand where we have the best operations and get people look at them throughout the organization. But I’m excited to be here. I really appreciate the opportunity to get involved with the leadership in the manufacturing operations, and we’re starting to see significant momentum as far as learning and business overall.

Thanks Darryl.

Great. I’ll get back in queue.

All right. Thank you.

Thank you. [Operator Instructions]. Our next question is a follow-up from the line of Steve Barger with KeyBanc Capital Markets. Please go ahead with your follow-up.

Hi guys, I guess I’ll follow-up with just a few more questions here. So, for the aluminum business, you mentioned some struggles with that business in the margin side. Can you talk about any operational improvements that you can discuss or was the margin impact more an issue of volume absorption?

Well, it’s described the margin expectations they’re not exactly what we had in mind. And this streak is now one category of the issue. It’s not the under-performance of the plants it’s just that we’re not achieving the even margins we had in mind. And we’re working across all fronts to try to address that. But it will get all day into it it’s not where we like it. And when we don’t like it we talk about it, and we talk about it and then we make changes. So, our job will be here is, when things are not going as we expect then we take the apt action and we’re in the process of doing a lot of things. And Darryl is at the forefront of that. So, we expect improvements along those lines.

Ken, Darryl is spending a lot of time there. We are investing in people talent, also investing in the continuous improvement culture. So I think we’re making some traction. The bottom line is we just put too much business in there too fast. And we’re working our way through it. And that’s there is a variety of issues that come with that. So, we’re working on it. The good news is we continue to see opportunity. We’ve got really a lot of people interested in our capacity in the business and what we need to figure out is how much deeper we want to go in a platform that has not really resulted in any profitability. So, that’s what we’re thinking about, lot of opportunity. Of course the opportunity is expensive. This has basically driven our capital budget for the last three years. So, we are carefully looking at additional opportunities. There is a lot of interest, continues to be a lot of interest and people partnering with us. But until we get this thing fixed, I think you’re going to see us to be awfully cautious. And it’s one of the reasons that Darryl is here. And along with a lot of people at General Aluminum who are working really hard.

Well, it’s a problem and we’re addressing it. And we’re going to take whatever actions necessary to make sure that we achieve our expectations relative to return.

Okay. I guess, as a follow-up then, does mix kind of factor into those results of having more impact from higher margin programs or platforms or I guess in terms of poor visibility on getting these improvements kind of - things kind of ironed out in the future, would you have a better, now do you have a better visibility going forward now than you did call it six months ago or maybe 12 months ago.

Ken I would say, yes, this is Matt. I would say yes only in the sense that I think as Darryl mention that we’re seeing trending operational improvement. So, I think we’ve got some confidence that we’ll see a better second half. I would at the risk of being wrong again, probably not going to quantify that. It is but we certainly expect and the key down there and Darryl has given us reason to believe that, the second half will be improved. Let me point out something which seemed very, very fundamental and maybe below the interest level of any one on these lines. But we want to point out that getting and attracting employees for factory and I’m talking about well-paying factory opportunities, particularly in the rural areas in not only in this business, in all of our business. There is, beginning to be a very, very, very big shortage of direct labor productivity. And if anything will affect your margins, it will be turnover employees and access to employees. And we are in the manufacturing business and so this is a big concern to ours. But it’s not [indiscernible] concern. People will be talking more and more and more about this in the future. Where are you going to get these employees that are willing to come to work each day, get paid and have all the benefits, those reduced to be able to get people standing outside the door, there is just no one there in the lobby anymore. It’s a very, very difficult situation. And I’ll assure you we’ll be hearing about this if you haven’t from many other companies when they start to report, it is a problem. And the aluminum business is very labor intense, thanks to lot of people that create a lot of product. And the availability and the cost of those employees has dramatically changed in the last year.

Got it. That’s helpful. And then one last one from me, would you guys want to discuss any business that you’re bidding on that could benefit either, see the benefit of either in the second half of 2015 or perhaps even 2016 if it’s something you want to talk about?

We’re always looking for particularly bolt-on acquisitions. But as last year was a perfect example what the market is today, it’s about private equity, private equity is out there paying a premium of sometimes 2 points in multiple extensions. We are not interested in and we cannot acquire companies that we don’t believe can keep up with the rest of the company. We are making an acquisition like SAET, we expect SAET to exceed catch-up and exceed the profitability that we are currently doing. If we have an EBITDA to sales you can’t buy something for 2 points less than that and because we’re not in the business of going backwards. So we’re patient, we were patient last year in fact as everyone knows, it took us to November and December to close two transactions. And obviously we haven’t announced the transaction yet this year but we are not going to grow this company just to grow the company. So, it’s got to fit, it got to have the people and this company now is moving close to 90 as acquisition, so we understand it. But we will not going to be driven into paying more than we should pay for a company. And but that’s the marketplace. We’ll be patient. And when given the opportunity we’ll pull the trigger as we did late last year. But there is a lot of patience in today and acquiring assets that long-term have to perform as well as you expect for the rest of the company. We have great hopes for what we already have. And we’re not to shovel something on top of this. Put something into this Q that we don’t think can compete with the rest of the business that are already there. And that pulls us back on the revenue side particularly. But we’re not interested in only grabbing the room, do the transactions when they make sense and we’ll stand down when they don’t.

Thank you. Ladies and gentlemen, there are no further questions at this time. I would like to turn the floor back over to management for closing remarks.

Well, again, I want to thank all the stakeholders of the company. We believe here that we have had a very successful second quarter. We’re on track. It’s dicey out here and we’re going to have successes and failure. But the profile of the company again being a diversified industrial company, international in content maybe further nationally in context grow that side of it. We have the team, we have the people and we have good access to capital. And more important we’re going to run a tight shift here particularly when the all the unknowns because we got started in these companies, lot of unknowns. So this is - what’s fun. We’ll enjoy it. And we got the right team. And adding Darryl has been positive. And probably he’s having real impact here with his deep-back operating skills and acquisitions sold. We’re ready for the future and we want to thank you for your support. And stick with us. Have a good day.

Thank you ladies and gentlemen. This does conclude our teleconference for today. You may now disconnect your lines at this time. Thank you for your participation. And have a wonderful day.