Timken Reports Record Second-Quarter Results
Timken Reports Record Second-Quarter Results Timken Reports Record Second-Quarter Results
BUSINESS SEGMENTS (Dollars in thousands) (Unaudited) Mobile Industries Segment Q2 2008 Q2 2007 Six Months 08 Six Months 07 Net sales to external customers $ 628,195 $ 632,497 $ 1,263,490 $ 1,241,952 Adjusted earnings (loss) before interest and taxes (EBIT) * (2) 12,040 24,616 38,649 $45,504 Adjusted EBIT Margin (2) 1.9% 3.9% 3.1% 3.7% Process Industries Segment Net sales to external customers $ 327,547 $ 265,747 $ 639,716 $ 514,614 Intergroup sales 870 485 1,279 851 Total net sales $ 328,417 $ 266,232 $ 640,995 $ 515,465 Adjusted earnings before interest and taxes (EBIT) * (2) 63,561 38,359 123,460 $65,423 Adjusted EBIT Margin (2) 19.4% 14.4% 19.3% 12.7% Aerospace and Defense Segment Net sales to external customers $ 105,676 $ 74,370 $ 207,808 $ 148,084 Adjusted earnings before interest and taxes (EBIT) * (2) 12,126 4,183 19,303 $10,692 Adjusted EBIT Margin (2) 11.5% 5.6% 9.3% 7.2% Total Bearings and Power Transmission Group Net sales to external customers $ 1,061,418 $ 972,614 $ 2,111,014 $ 1,904,650 Intergroup sales 870 485 1,279 851 Total net sales $ 1,062,288 $ 973,099 $ 2,112,293 $ 1,905,501 Adjusted earnings before interest and taxes (EBIT) * (2) 87,727 67,158 181,412 121,619 Adjusted EBIT Margin (2) 8.3% 6.9% 8.6% 6.4% Steel Group (3) Net sales to external customers $ 474,131 $ 376,617 $ 859,205 $ 729,094 Intergroup sales 44,797 34,152 84,711 71,967 Total net sales $ 518,928 $ 410,769 $ 943,916 $ 801,061 Adjusted earnings before interest and taxes (EBIT) * (2) 80,318 65,888 133,697 131,414 Adjusted EBIT Margin (2) 15.5% 16.0% 14.2% 16.4% Unallocated corporate expense (19,303) Intergroup eliminations income (expense) (4) (1,352) Consolidated Net sales to external customers $ 1,535,549 $ 1,349,231 $ 2,970,219 $ 2,633,744 Adjusted earnings before interest and taxes (EBIT) * (2) $ 147,390 $ 115,153 $ 277,391 $ 217,788 Adjusted EBIT Margin (2) 9.6% 8.5% 9.3% 8.3% (1) "Adjusted" statements exclude the impact of impairment and restructuring, manufacturing rationalization/reorganization and special charges and credits for all periods shown. (2) EBIT is defined as operating income plus other income (expense). EBIT Margin is EBIT as a percentage of net sales. EBIT and EBIT margin on a segment basis exclude certain special items set forth above. EBIT and EBIT Margin are important financial measures used in the management of the business, including decisions concerning the allocation of resources and assessment of performance. Management believes that reporting EBIT and EBIT Margin best reflect the performance of the company's business segments and EBIT disclosures are responsive to investors. (3) Discontinued Operations reflects the Dec. 8, 2006 sale of Timken Latrobe Steel. Steel Group Net sales and Adjusted EBIT have been changed to exclude Timken Latrobe Steel for all periods. Income From Discontinued Operations Net of Income Taxes, Special Items includes the gain on sale. Income From Discontinued Operations Net of Income Taxes, Other includes prior activity of Timken Latrobe Steel in accordance with the sales agreement. (4) Intergroup eliminations represent intergroup profit or loss between the Steel Group and the Bearings and Power Transmission Group. (17,526) (367) (35,728) (1,990) (33,754) (1,491)
Reconciliation of GAAP net income and EPS - diluted. This reconciliation is provided as additional relevant information about the company's performance. Management believes adjusted net income and adjusted earnings per share are more representative of the company's performance and therefore useful to investors. Management also believes that it is appropriate to compare GAAP net income to adjusted net income in light of special items related to impairment and restructuring and manufacturing rationalization/reorganization costs, Continued Dumping and Subsidy Offset Act (CDSOA) receipts, and gain/loss on the sale of non-strategic assets. Second Quarter Six Months 2008 2007 2008 2007 (Dollars in thousands, except per share data) (Unaudited) $ EPS $ EPS (1) $ EPS (1) $ EPS (1) Net income $ 88,943 $ 0.92 $ 55,326 $ 0.58 $173,408 $1.80 $130,520 $1.37 Pre-tax special items: Manufacturing rationalization/reorganization expenses - cost of products sold 868 Manufacturing rationalization/reorganization expenses - SG&A 1,251 (Gain) loss on divestiture - Impairment and restructuring 1,807 Special items - other (income) (191) Provision for income taxes (2) Income from discontinued operations (273) net of income taxes, special items (3) - 0.01 0.01 - 0.02 - - - Adjusted net income $ 92,405 $ 0.96 $ 69,726 $ 0.73 $171,268 $1.78 $132,201 $1.39 (1) EPS amounts will not sum due to rounding differences. 10,720 649 (38) 7,254 (2,029) (2,431) 275 0.11 0.01 - 0.08 (0.02) (0.03) - 2,242 2,059 (8) 4,683 (20,545) 9,429 (2) Provision for income taxes includes the tax effect of pre-tax special items on our effective tax rate, as well as the impact of discrete tax items recorded during the quarter. (3) Discontinued Operations relates to the sale of Latrobe Steel on Dec. 8, 2006. - 0.02 0.02 - 0.05 (0.21) 0.10 - 22,563 1,979 316 21,030 (2,372) (41,170) (665) 0.24 0.02 - 0.22 (0.02) (0.43) (0.01)
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Reconciliation of GAAP net income and EPS - diluted.<br />
This reconciliation is provided as additional relevant information about the company's performance. Management believes adjusted net income and adjusted earnings per share are more<br />
representative of the company's performance and therefore useful to investors. Management also believes that it is appropriate to compare GAAP net income to adjusted net income<br />
in light of special items related to impairment and restructuring and manufacturing rationalization/reorganization costs, Continued Dumping and Subsidy Offset Act (CDSOA) receipts,<br />
and gain/loss on the sale of non-strategic assets.<br />
<strong>Second</strong> <strong>Quarter</strong> Six Months<br />
2008 2007 2008 2007<br />
(Dollars in thousands, except per share data) (Unaudited) $ EPS $ EPS (1) $ EPS (1) $ EPS (1)<br />
Net income $ 88,943 $ 0.92 $ 55,326 $ 0.58<br />
$173,408 $1.80 $130,520 $1.37<br />
Pre-tax special items:<br />
Manufacturing rationalization/reorganization expenses -<br />
cost of products sold 868<br />
Manufacturing rationalization/reorganization expenses - SG&A 1,251<br />
(Gain) loss on divestiture -<br />
Impairment and restructuring 1,807<br />
Special items - other (income) (191)<br />
Provision for income taxes (2)<br />
Income from discontinued operations<br />
(273)<br />
net of income taxes, special items (3) -<br />
0.01<br />
0.01<br />
-<br />
0.02<br />
-<br />
-<br />
-<br />
Adjusted net income $ 92,405 $ 0.96 $ 69,726 $ 0.73<br />
$171,268 $1.78 $132,201 $1.39<br />
(1) EPS amounts will not sum due to rounding differences.<br />
10,720<br />
649<br />
(38)<br />
7,254<br />
(2,029)<br />
(2,431)<br />
275<br />
0.11<br />
0.01<br />
-<br />
0.08<br />
(0.02)<br />
(0.03)<br />
-<br />
2,242<br />
2,059<br />
(8)<br />
4,683<br />
(20,545)<br />
9,429<br />
(2) Provision for income taxes includes the tax effect of pre-tax special items on our effective tax rate, as well as the impact of discrete tax items recorded during the quarter.<br />
(3) Discontinued Operations relates to the sale of Latrobe Steel on Dec. 8, 2006.<br />
-<br />
0.02<br />
0.02<br />
-<br />
0.05<br />
(0.21)<br />
0.10<br />
-<br />
22,563<br />
1,979<br />
316<br />
21,030<br />
(2,372)<br />
(41,170)<br />
(665)<br />
0.24<br />
0.02<br />
-<br />
0.22<br />
(0.02)<br />
(0.43)<br />
(0.01)
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