Timken Reports Record Second-Quarter Results

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- 6 - The Timken Company Timken expects aerospace demand to remain strong and performance to benefit from the integration of the Purdy acquisition and the segment’s broad end-market profile, resulting in performance during the second half of the year that is anticipated to be comparable to the first six months of 2008 and well above 2007 results. Steel Group Results Sales for the Steel Group, including inter-group sales, were $518.9 million, an increase of 26 percent from $410.8 million for the same period last year. The increase was driven by raw-material surcharges and higher demand across all market sectors, except for automotive. Second-quarter EBIT was $80.3 million, up 22 percent from $65.9 million in the prior-year period. Compared to the same period a year ago, results benefited from volume, mix and surcharges, which were partially offset by higher raw-material and related LIFO charges, as well as higher manufacturing costs. For the first six months of 2008, Steel Group sales were $943.9 million, up 18 percent over the first half of last year. EBIT for the first half of 2008 was $133.7 million, or 14.2 percent of sales, compared to EBIT of $131.4 million, or 16.4 percent of sales in last year’s first half. Second-half 2008 Steel Group performance is expected to be below the first half of the year, and above the second half of 2007. The company continues to expect to benefit from volume, mix and surcharges, partially offset by higher raw-material and related LIFO charges, as well as increased manufacturing costs. Outlook The company expects earnings per diluted share for 2008, excluding special items, to be $2.95 to $3.10 for the year and $0.65 to $0.75 for the third quarter, compared to $2.40 and $0.51, respectively, for the same periods in 2007. Industrial demand is expected to remain strong in 2008 as additional capacity comes online in key growth markets, while North American automotive demand is anticipated to decline. Timken will continue to pursue execution initiatives and portfolio optimization, as well as pricing and better working capital management to improve
- 7 - The Timken Company operating results and cash flow. The company expects these initiatives to contribute to record performance in 2008. Conference Call Information The company will host a conference call for investors and analysts today to discuss financial results. Conference Call: Wednesday, July 30, 2008 11 a.m. Eastern Time Live Dial-In: 800-344-0593 or 706-634-0975 (Call in 10 minutes prior to be included.) Conference ID: 24735332 Replay Dial-In through Aug. 6, 2008: 800-642-1687 or 706-645-9291 Live Webcast: www.timken.com/investors About The Timken Company The Timken Company (NYSE: TKR, http://www.timken.com) keeps the world turning, with innovative friction management and power transmission products and services, enabling our customers to perform faster and more efficiently. With sales of $5.2 billion in 2007, operations in 27 countries and approximately 25,000 employees, Timken is Where You Turn for better performance. Certain statements in this news release (including statements regarding the company's forecasts, estimates and expectations) that are not historical in nature are "forward-looking" statements within the meaning of the Private Securities Litigation Reform Act of 1995. In particular, the statements related to expectations regarding the future performance of the specific reporting segments and the company’s financial performance, including the information under the heading “Outlook,” are forward-looking. The company cautions that actual results may differ materially from those projected or implied in forward-looking statements due to a variety of important factors, including: the completion of the company’s financial statements for the second quarter of 2008; fluctuations in raw-material and energy costs and the operation of the company’s surcharge mechanisms; the company’s ability to respond to the changes in its end markets, especially the North American automotive industry; changes in the financial health of the company’s customers; changes in the expected costs associated with product warranty claims; and the impact on operations of general economic conditions, higher raw-material and energy costs, fluctuations in customer demand and the company's ability to achieve the benefits of its future and ongoing programs and initiatives, including, without limitation, the implementation of its Mobile Industries Segment restructuring program and initiatives and the rationalization of the company’s Canton bearing operations. These and additional factors are described in greater detail in the company's Annual Report on Form 10-K for the year ended Dec. 31, 2007, page 40 and in the company’s Form 10-Q for the quarter ended March 31, 2008. The
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Timken Reports Record Second-Quarter Results

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