STOCK TITAN

Timken Reports Second-Quarter 2024 Results

Rhea-AI Impact
(Neutral)
Rhea-AI Sentiment
(Neutral)
Tags

The Timken Company (NYSE: TKR) reported second-quarter 2024 results with sales of $1.18 billion, down 7.1% from last year's record level. Earnings per share were $1.36, with adjusted EPS of $1.63. The company's net income margin was 8.1%, while adjusted EBITDA margin stood at 19.5%. Timken updated its full-year 2024 outlook, now expecting EPS of $5.00-$5.20 and adjusted EPS of $6.00-$6.20. Revenue is forecasted to be down 3-4% from 2023. The company completed the sale of a portion of its stake in Timken India , generating pre-tax proceeds of approximately $232 million. Timken continues to focus on operational excellence, targeted growth initiatives, and strategy execution to deliver resilient performance in 2024.

La Timken Company (NYSE: TKR) ha riportato i risultati del secondo trimestre 2024 con vendite di 1,18 miliardi di dollari, in calo del 7,1% rispetto al livello record dell'anno scorso. Gli utili per azione sono stati di 1,36 dollari, con un EPS rettificato di 1,63 dollari. Il margine di reddito netto dell'azienda era dell'8,1%, mentre il margine EBITDA rettificato ha raggiunto il 19,5%. Timken ha aggiornato le prospettive per l'intero anno 2024, ora aspettandosi un EPS tra 5,00 e 5,20 dollari e un EPS rettificato tra 6,00 e 6,20 dollari. Si prevede che il fatturato diminuisca del 3-4% rispetto al 2023. L'azienda ha completato la vendita di parte della sua partecipazione in Timken India, generando ricavi al lordo delle tasse di circa 232 milioni di dollari. Timken continua a concentrarsi sull'eccellenza operativa, su iniziative di crescita mirate e sull'esecuzione della strategia per garantire una performance resiliente nel 2024.

La Timken Company (NYSE: TKR) reportó los resultados del segundo trimestre de 2024 con ventas de 1,18 mil millones de dólares, una disminución del 7,1% en comparación con el nivel récord del año pasado. Las ganancias por acción fueron de 1,36 dólares, con un EPS ajustado de 1,63 dólares. El margen de ingreso neto de la compañía fue del 8,1%, mientras que el margen EBITDA ajustado fue del 19,5%. Timken actualizó su perspectiva para todo el año 2024, ahora esperando un EPS de entre 5,00 y 5,20 dólares y un EPS ajustado de entre 6,00 y 6,20 dólares. Se pronostica que los ingresos disminuirán entre un 3 y un 4% en comparación con 2023. La empresa completó la venta de una parte de su participación en Timken India, generando ingresos antes de impuestos de aproximadamente 232 millones de dólares. Timken continúa enfocándose en la excelencia operativa, iniciativas de crecimiento dirigidas y la ejecución de estrategias para ofrecer un rendimiento resistente en 2024.

팀켄 컴퍼니 (NYSE: TKR)는 2024년 2분기 실적을 보고하며 매출이 11억 8천만 달러로 작년 기록 대비 7.1% 감소했다고 발표했습니다. 주당 순이익은 1.36달러, 조정된 EPS는 1.63달러였습니다. 회사의 순익률은 8.1%였고, 조정된 EBITDA 마진은 19.5%에 달했습니다. 팀켄은 2024년 전체 연도 전망을 업데이트하며, 이제 EPS를 5.00~5.20달러, 조정된 EPS를 6.00~6.20달러로 예상하고 있습니다. 매출은 2023년 대비 3-4% 감소할 것으로 예상됩니다. 회사는 팀켄 인디아의 일부 지분 판매를 완료하여 세전 약 2억 3천 2백만 달러의 수익을 창출했습니다. 팀켄은 2024년에도 안정적인 실적을 제공하기 위해 운영 우수성, 목표 성장 이니셔티브 및 전략 실행에 집중하고 있습니다.

La Timken Company (NYSE: TKR) a rapporté ses résultats du deuxième trimestre 2024 avec des ventes s'élevant à 1,18 milliard de dollars, en baisse de 7,1% par rapport au niveau record de l'année dernière. Le bénéfice par action était de 1,36 dollar, avec un BPA ajusté de 1,63 dollar. La marge de revenu net de l'entreprise était de 8,1%, tandis que la marge EBITDA ajustée était de 19,5%. Timken a mis à jour ses prévisions pour l'année entière 2024, maintenant anticipant un BPA de 5,00 à 5,20 dollars et un BPA ajusté de 6,00 à 6,20 dollars. Les revenus devraient diminuer de 3 à 4% par rapport à 2023. L'entreprise a complété la vente d'une partie de sa participation dans Timken India, générant des recettes avant impôts d'environ 232 millions de dollars. Timken continue de se concentrer sur l'excellence opérationnelle, des initiatives de croissance ciblées et l'exécution de la stratégie pour offrir des performances résilientes en 2024.

Die Timken Company (NYSE: TKR) berichtete über die Ergebnisse des zweiten Quartals 2024 mit einem Umsatz von 1,18 Milliarden Dollar, was einem Rückgang von 7,1% im Vergleich zum Rekordniveau des Vorjahres entspricht. Earnings per Share betrugen 1,36 Dollar, während das bereinigte EPS bei 1,63 Dollar lag. Die Nettoeinnahmermarge des Unternehmens lag bei 8,1%, während die bereinigte EBITDA-Marge 19,5% betrug. Timken hat sein Ausblick für das Gesamtjahr 2024 aktualisiert und erwartet nun ein EPS von 5,00 bis 5,20 Dollar und ein bereinigtes EPS von 6,00 bis 6,20 Dollar. Der Umsatz wird voraussichtlich um 3-4% im Vergleich zu 2023 zurückgehen. Das Unternehmen hat den Verkauf eines Teils seiner Anteile an Timken Indien abgeschlossen und dabei vor Steuern etwa 232 Millionen Dollar eingenommen. Timken konzentriert sich weiterhin auf operative Exzellenz, gezielte Wachstumsinitiativen und die Umsetzung von Strategien, um 2024 ein robustes Ergebnis zu erzielen.

Positive
  • Solid second-quarter results in line with company expectations
  • Strong margins in both segments, including excellent performance from recent acquisitions
  • Increased quarterly dividend by 3%
  • Generated significant proceeds from partial sale of Timken India stake
  • Net debt-to-adjusted EBITDA ratio at 1.9 times, with no significant debt maturities until 2027
Negative
  • Sales down 7.1% from last year's record level
  • Net income decreased to $96.2 million from $125.2 million in Q2 2023
  • Adjusted EBITDA margin declined to 19.5% from 20.7% in Q2 2023
  • Lowered full-year 2024 outlook, now expecting revenue to be down 3-4% from 2023
  • Significantly lower renewable energy demand in China impacting sales

Insights

Timken's Q2 2024 results reveal a mixed financial picture. Sales of $1.18 billion represent a 7.1% year-over-year decline, primarily due to lower renewable energy demand in China. However, the company maintained a solid adjusted EBITDA margin of 19.5%, demonstrating resilience in challenging market conditions.

The adjusted EPS of $1.63 shows a decrease from the previous year's $2.01, reflecting the impact of lower sales volumes. Despite this, Timken's ability to generate free cash flow of $87.3 million in the quarter is commendable, supporting its shareholder-friendly actions including a 3% dividend increase and share repurchases.

The company's strategic move to sell a portion of its stake in Timken India , generating pre-tax proceeds of approximately $232 million, strengthens its financial position. With a net debt-to-adjusted EBITDA ratio of 1.9 times and no significant debt maturities until 2027, Timken maintains a healthy balance sheet.

The updated full-year 2024 outlook, with adjusted EPS now expected between $6.00 and $6.20 and revenue projected to be down 3% to 4% from 2023, suggests cautious optimism. This guidance reflects both the company's solid first-half performance and a slightly tempered view for the rest of the year.

Investors should note the upcoming CEO transition, with Tarak Mehta set to take the helm in September. This leadership change, coupled with Timken's focus on operational excellence and targeted growth initiatives, could provide new opportunities for the company's long-term growth strategy.

Timken's Q2 results offer valuable insights into the industrial sector's current dynamics. The 7.7% organic sales decline highlights challenges in key markets, particularly the significant downturn in China's renewable energy sector. This underscores the volatility in global industrial demand and the impact of regional market shifts on multinational corporations.

The performance disparity between Timken's segments is noteworthy. The Engineered Bearings segment saw an 8.6% sales decrease, while the Industrial Motion segment experienced a milder 3.9% decline. This divergence reflects varying resilience across industrial subsectors, with aerospace and rail showing growth amidst broader market headwinds.

Timken's ability to maintain robust margins (21.2% adjusted EBITDA margin for Engineered Bearings and 20.0% for Industrial Motion) despite lower volumes is impressive. It suggests effective cost management and pricing strategies, which are important in navigating cyclical industrial markets.

The company's focus on acquisitions and innovation, evidenced by its recognition as one of the World's Most Innovative Companies, positions it well for future growth. However, the tempered outlook for the rest of 2024 indicates ongoing challenges in the industrial sector, particularly in end-market demand.

For investors, Timken's performance serves as a barometer for the broader industrial sector, highlighting both the challenges of global market volatility and the importance of operational efficiency and strategic positioning in maintaining profitability during downturns.

  • Sales of $1.18 billion, in line with company expectations
  • Second-quarter earnings per share of $1.36; adjusted EPS of $1.63
  • Net income margin of 8.1 percent; adjusted EBITDA margin of 19.5 percent
  • Updates full-year 2024 outlook; now expects EPS of $5.00-$5.20, with adjusted EPS of $6.00-$6.20

NORTH CANTON, Ohio, July 31, 2024 /PRNewswire/ -- The Timken Company (NYSE: TKR; www.timken.com), a global technology leader in engineered bearings and industrial motion, today reported second-quarter 2024 sales of $1.18 billion, down 7.1 percent from last year's record level. Organically, sales were down 7.7 percent, with most of the decline attributable to significantly lower renewable energy demand in China. Sales were relatively flat compared to the first quarter on an organic basis and in line with company expectations.

Timken posted net income in the second quarter of $96.2 million or $1.36 per diluted share. This compares to net income of $125.2 million or $1.73 per diluted share for the same period a year ago. The company's net income margin in the quarter was 8.1 percent, compared to 9.8 percent in the second quarter of last year.  

Excluding special items (detailed in the attached tables), adjusted net income in the second quarter was $115.2 million or $1.63 per diluted share. This compares to adjusted net income of $146.1 million or $2.01 per diluted share for the same period in 2023. Adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) in the quarter was $230.2 million or 19.5 percent of sales, compared with $263.0 million or 20.7 percent of sales in the second quarter of last year.

Net cash from operations for the quarter was $124.6 million, and free cash flow was $87.3 million. During the quarter, Timken increased its quarterly dividend by 3 percent and repurchased 360 thousand shares of company stock. In total, the company returned $53.6 million of cash to shareholders through dividends and share repurchases during the quarter.

In May, the company completed the sale of a portion of its stake in Timken India Limited (TIL), generating pre-tax proceeds of approximately $232 million. Timken continues to hold a majority stake in TIL and plans no further sale transactions. As of the end of the second quarter, the company's net debt-to-adjusted EBITDA ratio was 1.9 times, with no significant debt maturities until 2027.

"The Timken team continues to execute well in this dynamic environment, achieving solid second-quarter results that were in line with our expectations," said Richard G. Kyle, president and chief executive officer. "We delivered strong margins in both segments, including excellent performance from our recent acquisitions. And we continued to advance our strategic initiatives during the quarter to strengthen the company for the future."

Second-Quarter 2024 Segment Results

Engineered Bearings sales of $783.4 million decreased 8.6 percent from the same period a year ago. The decrease was driven by lower end-market demand and unfavorable foreign currency translation. Renewable energy saw the most significant organic decline in the quarter, driven almost entirely by continued weakness in China. Among other market sectors, industrial distribution, aerospace and rail shipments were higher compared to the same period a year ago, while off-highway revenue was lower.

EBITDA for the quarter was $163.3 million or 20.8 percent of sales, compared with EBITDA of $185.5 million or 21.6 percent of sales for the same period a year ago. The decrease in EBITDA was driven primarily by the impact of lower volume, partially offset by favorable price/mix and improved manufacturing performance.

Excluding special items, adjusted EBITDA in the quarter was $166.2 million or 21.2 percent of sales, compared with $189.6 million or 22.1 percent of sales in the second quarter of last year.

Industrial Motion sales of $398.9 million decreased 3.9 percent compared with the same period a year ago. The decrease was driven primarily by lower end-market demand, partially offset by the benefit of acquisitions and higher pricing. Organically, most platforms were lower as compared to the prior year, with drive systems and linear motion posting the largest declines.

EBITDA for the quarter was $75.6 million or 19.0 percent of sales, compared with EBITDA of $80.9 million or 19.5 percent of sales for the same period a year ago. The decrease in EBITDA was driven primarily by the impact of lower volume, partially offset by the benefit of acquisitions and favorable selling, general and administrative (SG&A) expenses.

Excluding special items, adjusted EBITDA in the quarter was $79.7 million or 20.0 percent of sales, compared with $85.9 million or 20.7 percent of sales in the second quarter of last year.

2024 Outlook

Timken is updating its full-year 2024 outlook, with earnings per diluted share now forecasted to be in the range of $5.00 to $5.20 and adjusted earnings per diluted share in the range of $6.00 to $6.20. The company now expects revenue to be down 3 to 4 percent in total from 2023.

"Our outlook reflects our solid first-half performance along with a slightly tempered view on the rest of the year," said Kyle. "We remain focused on delivering resilient performance in 2024 through operational excellence, targeted growth initiatives, and the continued execution of our strategy. In addition, we expect to generate significant free cash flow over the balance of the year, which will further fuel our ability to create shareholder value through disciplined capital allocation."

Kyle concluded, "The company's previously announced CEO succession plan remains on schedule, and we look forward to welcoming Tarak Mehta to Timken as president and CEO in early September. With a strong foundation built on 125 years of innovation and excellence, Timken is well-positioned for the next chapter of profitable growth and success under his leadership."

Conference Call Information

Timken will host a conference call today at 11 a.m. Eastern Time to review its financial results. Presentation materials will be available online in advance of the call for interested investors and securities analysts.

Conference Call:

Wednesday, July 31, 2024


11:00 a.m. Eastern Time


Live Dial-In: 833-470-1428


Or 404-975-4839


Access Code: 259477


(Call in 10 minutes prior to be included.)



Conference Call Replay:

Replay Dial-In available through


August 14, 2024:


866-813-9403 or 929-458-6194


Replay Access Code: 540493



Live Webcast:

http://investors.timken.com



Register in advance:

https://tmkn.biz/3xLp5IQ

 

About The Timken Company

The Timken Company (NYSE: TKR; www.timken.com), a global technology leader in engineered bearings and industrial motion, designs a growing portfolio of next-generation products for diverse industries. For 125 years, Timken has used its specialized expertise to innovate and create customer-centric solutions that increase reliability and efficiency. The company posted $4.8 billion in sales in 2023 and employs more than 19,000 people globally, operating from 45 countries. Timken is one of the World's Most Innovative Companies, according to Fast Company, and has been recognized among America's Most Responsible CompaniesAmerica's Greatest Workplaces and America's Greatest Workplaces for Diversity by NewsweekBest Companies to Work For by U.S. News & World Report, the World's Most Ethical Companies® by Ethisphere and America's Most Innovative Companies by Fortune.

Certain statements in this release (including statements regarding the company's forecasts, estimates, plans 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 company's future financial performance, including information under the heading "2024 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 finalization of the company's financial statements for the second quarter of 2024; the company's ability to respond to the changes in its end markets that could affect demand for the company's products or services; unanticipated changes in business relationships with customers or their purchases from the company; changes in the financial health of the company's customers, which may have an impact on the company's revenues, earnings and impairment charges; logistical issues associated with port closures or congestion, delays or increased costs; the impact of changes to the company's accounting methods; political risks associated with government instability; recent world events that have increased the risks posed by international trade disputes, tariffs, sanctions and hostilities; strained geopolitical relations between countries in which we have significant operations; weakness in global or regional general economic conditions and capital markets (as a result of financial stress affecting the banking system or otherwise); the impact of inflation on employee expenses, shipping costs, raw material costs, energy and fuel prices, and other production costs; the company's ability to satisfy its obligations under its debt agreements and renew or refinance borrowings on favorable terms in a high interest rate environment; fluctuations in currency valuations; changes in the expected costs associated with product warranty claims; the ability to achieve satisfactory operating results in the integration of acquired companies, including realizing any accretion, synergies, and expected cashflow generation within expected timeframes or at all; fluctuations in customer demand; the company's ability to effectively adjust prices for its products in response to changing dynamics; the impact on the company's pension obligations and assets due to changes in interest rates, investment performance and other tactics designed to reduce risk; the introduction of new disruptive technologies; unplanned plant shutdowns; the effects of government-imposed restrictions, commercial requirements, and company goals associated with climate change and emissions or other sustainability initiatives; unanticipated litigation, claims, investigations remediation, or assessments; changes in the global regulatory landscape; restrictions on the use of, or claims or remediation associated with, per- and polyfluoroalkyl substances; the company's ability to maintain positive relations with unions and works councils; the company's ability to compete for skilled labor and to attract, retain and develop management, other key employees, and skilled personnel at all levels of the organization; negative impacts to the company's operations or financial position as a result of pandemics, epidemics, or other public health concerns and associated governmental measures; and the company's ability to complete and achieve the benefits of announced plans, programs, initiatives, acquisitions and capital investments. Additional factors are discussed in the company's filings with the Securities and Exchange Commission, including the company's Annual Report on Form 10-K for the year ended Dec. 31, 2023, quarterly reports on Form 10-Q and current reports on Form 8-K. Except as required by the federal securities laws, the company undertakes no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise.

 

Media Relations:
Scott Schroeder
234.262.6420
scott.schroeder@timken.com

Investor Relations:
Neil Frohnapple
234.262.2310
investors@timken.com

 



















The Timken Company






CONDENSED CONSOLIDATED STATEMENTS OF INCOME






(Dollars in millions, except share data) (Unaudited)







Three Months Ended
June 30,


Six Months Ended
June 30,


2024

2023


2024

2023

Net sales

$

1,182.3


$

1,272.3



$

2,372.6


$

2,535.1


Cost of products sold

808.7


866.9



1,601.4


1,712.9


Selling, general & administrative expenses

184.1


184.9



374.8


371.7


Amortization of intangible assets

19.0


17.3



39.0


30.8


Impairment and restructuring charges

3.3


2.5



5.6


31.4


Operating Income

167.2


200.7



351.8


388.3


Non-service pension and other postretirement (expense) income

(1.0)




(2.0)


0.1


Other income, net

1.2


2.3



0.3


5.4


Interest expense, net

(29.5)


(26.4)



(58.9)


(49.0)


Income Before Income Taxes

137.9


176.6



291.2


344.8


Provision for income taxes

35.9


47.1



78.6


89.6


Net Income

102.0


129.5



212.6


255.2


Less: Net income attributable to noncontrolling interest

5.8


4.3



12.9


7.7


Net Income Attributable to The Timken Company

$

96.2


$

125.2



$

199.7


$

247.5








Net Income per Common Share Attributable to The Timken Company Common Shareholders






    Basic Earnings per share

$

1.37


$

1.74



$

2.84


$

3.43


    Diluted Earnings per share

$

1.36


$

1.73



$

2.82


$

3.39








Average Shares Outstanding

70,364,539


71,882,843



70,301,757


72,162,267


Average Shares Outstanding - assuming dilution

70,849,254


72,512,991



70,850,792


72,907,804


 
















BUSINESS SEGMENTS





(Unaudited)






Three Months Ended
June 30,

Six Months Ended
June 30,

(Dollars in millions)

2024

2023

2024

2023

Engineered Bearings





Net sales

$

783.4


$

857.2


$

1,585.9


$

1,757.9


Earnings before interest, taxes, depreciation and amortization (EBITDA) (1)

$

163.3


$

185.5


$

342.0


$

390.5


EBITDA Margin (1)

20.8

%

21.6

%

21.6

%

22.2

%

Industrial Motion





Net sales

$

398.9


$

415.1


$

786.7


$

777.2


Earnings before interest, taxes, depreciation and amortization (EBITDA) (1)

$

75.6


$

80.9


$

152.9


$

129.1


EBITDA Margin (1)

19.0

%

19.5

%

19.4

%

16.6

%

Unallocated corporate expense

$

(17.3)


$

(13.2)


$

(35.3)


$

(30.9)


Corporate pension and other postretirement benefit related income(2)


1.0



1.9







Consolidated





Net sales

$

1,182.3


$

1,272.3


$

2,372.6


$

2,535.1


Earnings before interest, taxes, depreciation and amortization (EBITDA) (1)

$

221.6


$

254.2


$

459.6


$

490.6


EBITDA Margin (1)

18.7

%

20.0

%

19.4

%

19.4

%






(1) EBITDA is a non-GAAP measure defined as operating income plus other income (expense) and excluding depreciation and amortization. EBITDA Margin is a non-GAAP measure defined as EBITDA as a percentage of net sales. EBITDA and EBITDA 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 EBITDA and EBITDA Margin is useful to investors as these measures are representative of the core operations of the segments and Company, respectively.






(2) Corporate pension and other postretirement benefit related income primarily represents actuarial gains that resulted from the remeasurement of plan assets and obligations as a result of changes in assumptions or experience. The Company recognizes actuarial gains and losses in connection with the annual remeasurement in the fourth quarter, or if specific events trigger a remeasurement. Refer to the Retirement Benefit Plans and Other Postretirement Benefit Plans footnotes within the Company's annual reports on Form 10-K and quarterly reports on Form 10-Q for additional discussion.































 













CONDENSED CONSOLIDATED BALANCE SHEETS



(Dollars in millions)

(Unaudited)




June 30,
2024


December 31,
2023

ASSETS




Cash and cash equivalents

$

469.9



$

418.9


Restricted cash

1.1



0.4


Accounts receivable, net

789.8



671.7


Unbilled receivables

148.1



144.5


Inventories, net

1,233.3



1,229.1


Other current assets

130.9



170.3


Total Current Assets

2,773.1



2,634.9


Property, plant and equipment, net

1,290.2



1,311.9


Operating lease assets

120.1



119.7


Goodwill and other intangible assets

2,317.4



2,401.0


Other assets

75.1



74.2


Total Assets

$

6,575.9



$

6,541.7


LIABILITIES




Accounts payable

$

369.6



$

367.2


Short-term debt, including current portion of long-term debt

46.5



605.6


Income taxes

76.3



19.9


Accrued expenses

448.3



478.6


Total Current Liabilities

940.7



1,471.3


Long-term debt

2,129.9



1,790.3


Accrued pension benefits

160.1



172.3


Accrued postretirement benefits

30.4



30.2


Long-term operating lease liabilities

78.0



78.7


Other non-current liabilities

286.7



296.5


Total Liabilities

3,625.8



3,839.3


EQUITY




The Timken Company shareholders' equity

2,796.8



2,582.4


Noncontrolling interest

153.3



120.0


Total Equity

2,950.1



2,702.4


Total Liabilities and Equity

$

6,575.9



$

6,541.7






 



















CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS






(Unaudited)







Three Months Ended
June 30,


Six Months Ended
June 30,

(Dollars in millions)

2024

2023


2024

2023

Cash Provided by (Used in)






OPERATING ACTIVITIES






Net Income

$

102.0


$

129.5



$

212.6


$

255.2


Adjustments to reconcile net income to net cash provided by operating activities:






Depreciation and amortization

54.2


51.2



109.5


96.8


Impairment charges

1.9




1.9


28.3


(Gain) loss on divestitures


0.4




(3.6)


Stock-based compensation expense

7.0


6.1



11.5


17.1


Pension and other postretirement expense

1.7


0.7



3.3


1.1


Pension and other postretirement benefit contributions and payments

(3.9)


(2.4)



(16.1)


(7.2)


Changes in operating assets and liabilities:






  Accounts receivable

(25.1)


(37.1)



(131.2)


(87.4)


  Unbilled receivables

(13.3)


(6.6)



(3.8)


(17.7)


  Inventories

(9.5)


9.2



(20.6)


15.3


  Accounts payable

(6.9)


(5.5)



13.8


(14.9)


  Accrued expenses

10.7


15.7



(20.5)


(29.1)


  Income taxes

6.0


(17.3)



26.5


(29.5)


  Other, net

(0.2)


0.1



(13.0)


(1.8)


Net Cash Provided by Operating Activities

$

124.6


$

144.0



$

173.9


$

222.6


INVESTING ACTIVITIES






Capital expenditures

$

(37.3)


$

(49.6)



$

(81.4)


$

(91.3)


Acquisitions, net of cash received

(0.2)


(295.4)



(0.4)


(324.6)


Investments in short-term marketable securities, net

1.1


(1.6)



20.8


(0.8)


Other, net

1.5


(0.9)



1.6


4.7


Net Cash Used in Investing Activities

$

(34.9)


$

(347.5)



$

(59.4)


$

(412.0)


FINANCING ACTIVITIES






Cash dividends paid to shareholders

$

(23.9)


$

(23.8)



$

(48.4)


$

(47.4)


Purchase of treasury shares

(29.7)


(100.5)



(29.7)


(154.5)


Proceeds from exercise of stock options

3.4


4.5



5.4


17.2


Payments related to tax withholding for stock-based compensation

(1.1)


(1.3)



(10.0)


(15.1)


Net (payments) proceeds from credit facilities

(499.2)


64.7



(481.5)


126.6


Net proceeds (payments) on long-term debt

287.9


(1.9)



286.6


(2.6)


Proceeds on sale of shares in Timken India Limited

232.3


284.8



232.3


284.8


Other, net

(6.7)




(6.7)



Net Cash (Used in) Provided by Financing Activities

$

(37.0)


$

226.5



$

(52.0)


$

209.0


Effect of exchange rate changes on cash

(4.0)


(9.8)



(10.8)


(8.0)


Increase in Cash, Cash Equivalents and Restricted Cash

$

48.7


$

13.2



$

51.7


$

11.6


Cash, Cash Equivalents and Restricted Cash at Beginning of Period

422.3


339.1



419.3


340.7


Cash, Cash Equivalents and Restricted Cash at End of Period

$

471.0


$

352.3



$

471.0


$

352.3


 















































Reconciliations of Adjusted Net Income to GAAP Net Income and Adjusted Earnings Per Share to GAAP Earnings Per Share:

(Unaudited)















The following reconciliation is provided as additional relevant information about the Company's performance deemed useful to investors. Management believes that the non-GAAP measures of adjusted net income and adjusted diluted earnings per share 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 adjusted net income and adjusted diluted earnings per share is useful to investors as these measures are representative of the Company's core operations.
















(Dollars in millions, except share data)

Three Months Ended
June 30,


Six Months Ended
June 30,


2024


EPS

2023


EPS


2024


EPS


2023


EPS

Net Income Attributable to The Timken Company

$

96.2



$

1.36


$

125.2



$

1.73



$

199.7



$

2.82



$

247.5



$

3.39

















Adjustments: (1)















Acquisition intangible amortization

$

19.0




$

17.3





$

39.0





$

30.8




  Impairment, restructuring and reorganization charges (2)

6.0




6.0





10.8





36.3




  Corporate pension and other postretirement benefit related income (3)




(1.0)









(1.9)




  Acquisition-related charges (4)

3.0




3.8





7.7





8.5




  (Gain) loss on divestitures and sale of certain assets (5)

(0.2)




0.4





(0.9)





(4.4)




Noncontrolling interest of above adjustments








(0.1)





(0.2)




  Provision for income taxes (6)

(8.8)




(5.6)





(15.3)





(17.0)




      Total Adjustments:

19.0



0.27


20.9



0.28



41.2



0.58



52.1



0.72


Adjusted Net Income Attributable to The Timken Company

$

115.2



$

1.63


$

146.1



$

2.01



$

240.9



$

3.40



$

299.6



$

4.11

















(1) Adjustments are pre-tax, with the net tax provision listed separately.
















(2) Impairment, restructuring and reorganization charges (including items recorded in cost of products sold) relate to: (i) plant closures; (ii) the rationalization of certain plants; (iii) severance related to cost reduction initiatives; (iv) impairment of assets; and (v) related depreciation and amortization. On March 26, 2024, the Company announced that Richard G. Kyle, President and Chief Executive Officer ("CEO") of the Company would be retiring from his position as CEO and that Tarak Mehta would be appointed CEO on September 5, 2024. Impairment, restructuring and reorganization charges for 2024 include the acceleration of certain stock compensation awards for Mr. Kyle and other one-time costs associated with the transition. Impairment, restructuring and reorganization charges for 2023 included $28.3 million related to the impairment of goodwill. The Company re-assesses its operating footprint and cost structure periodically, and makes adjustments as needed that result in restructuring charges. However, management believes these actions are not representative of the Company's core operations.
















(3) Corporate pension and other postretirement benefit related income represents actuarial gains that resulted from the remeasurement of plan assets and obligations as a result of changes in assumptions or experience. The Company recognizes actuarial gains and losses in connection with the annual remeasurement in the fourth quarter, or if specific events trigger a remeasurement. Refer to the Retirement Benefit Plans and Other Postretirement Benefit Plans footnotes within the Company's annual reports on Form 10-K and quarterly reports on Form 10-Q for additional discussion.
















(4) Acquisition-related charges represent deal-related expenses associated with completed transactions and any resulting inventory step-up impact.
















(5) Represents the net (gain) loss resulting from divestitures and sale of certain assets.














































(6) Provision for income taxes includes the net tax impact on pre-tax adjustments (listed above), the impact of discrete tax items recorded during the respective periods as well as other adjustments to reflect the use of one overall effective tax rate on adjusted pre-tax income in interim periods.




















































 































Reconciliation of EBITDA to GAAP Net Income, EBITDA Margin to Net Income as a Percentage of Sales, and EBITDA Margin, After Adjustments, to Net Income as a Percentage of Sales, and EBITDA, After Adjustments, to Net Income:

(Unaudited)










The following reconciliation is provided as additional relevant information about the Company's performance deemed useful to investors.  Management believes consolidated earnings before interest, taxes, depreciation and amortization (EBITDA) is a non-GAAP measure that is useful to investors as it is representative of the Company's performance and that it is appropriate to compare GAAP net income to consolidated EBITDA. Management also believes that adjusted EBITDA, adjusted EBITDA margin and EBITDA margin are useful to investors as they are representative of the Company's core operations and are used in the management of the business, including decisions concerning the allocation of resources and assessment of performance.











(Dollars in millions)

Three Months Ended
June 30,


Six Months Ended
June 30,


2024

Percentage
to
Net Sales

2023

Percentage
to
Net Sales


2024

Percentage
to
Net Sales

2023

Percentage
to
Net Sales

Net Income

$

102.0


8.6

%

$

129.5


10.2

%


$

212.6


9.0

%

$

255.2


10.1

%











Provision for income taxes

35.9



47.1




78.6



89.6



Interest expense

34.6



28.3




66.8



52.4



Interest income

(5.1)



(1.9)




(7.9)



(3.4)



Depreciation and amortization

54.2



51.2




109.5



96.8



Consolidated EBITDA

$

221.6


18.7

%

$

254.2


20.0

%


$

459.6


19.4

%

$

490.6


19.4

%











Adjustments:










  Impairment, restructuring and reorganization charges (1)

$

5.8



$

5.6




$

10.2



$

35.7



  Corporate pension and other postretirement benefit related income (2)



(1.0)






(1.9)



  Acquisition-related charges (3)

3.0



3.8




7.7



8.5



  (Gain) loss on divestitures and sale of certain assets (4)

(0.2)



0.4




(0.9)



(4.4)



    Total Adjustments

8.6


0.8

%

8.8


0.7

%


17.0


0.7

%

37.9


1.4

%

Adjusted EBITDA

$

230.2


19.5

%

$

263.0


20.7

%


$

476.6


20.1

%

$

528.5


20.8

%











(1) Impairment, restructuring and reorganization charges (including items recorded in cost of products sold) relate to: (i) plant closures; (ii) the rationalization of certain plants; (iii) severance related to cost reduction initiatives; and (iv) impairment of assets. On March 26, 2024, the Company announced that Richard G. Kyle, President and CEO of the Company would be retiring from his position as CEO and that Tarak Mehta would be appointed CEO on September 5, 2024. Impairment, restructuring and reorganization charges for 2024 include the acceleration of certain stock compensation awards for Mr. Kyle and other one-time costs associated with the transition. Impairment, restructuring and reorganization charges for 2023 included $28.3 million related to the impairment of goodwill. The Company re-assesses its operating footprint and cost structure periodically, and makes adjustments as needed that result in restructuring charges. However, management believes these actions are not representative of the Company's core operations. 











(2) Corporate pension and other postretirement benefit related income represents actuarial gains that resulted from the remeasurement of plan assets and obligations as a result of changes in assumptions or experience. The Company recognizes actuarial gains and losses in connection with the annual remeasurement in the fourth quarter, or if specific events trigger a remeasurement. Refer to the Retirement Benefit Plans and Other Postretirement Benefit Plans footnotes within the Company's annual reports on Form 10-K and quarterly reports on Form 10-Q for additional discussion.











(3) Acquisition-related charges represent deal-related expenses associated with completed transactions and any resulting inventory step-up impact.











(4) Represents the net (gain) loss resulting from divestitures and sale of certain assets.









































 





































Reconciliation of segment EBITDA, after adjustments, to segment EBITDA, and segment EBITDA, after adjustments, as a percentage of sales to segment EBITDA, as a percentage of sales:

(Unaudited)












The following reconciliation is provided as additional relevant information about the Company's Engineered Bearings and Industrial Motion segment performance deemed useful to investors. Management believes that non-GAAP measures of adjusted EBITDA and adjusted EBITDA margin for the segments are useful to investors as they are representative of each segment's core operations and are used in the management of the business, including decisions concerning the allocation of resources and assessment of performance.













Engineered Bearings













Three Months Ended
June 30,


Six Months Ended
June 30,

(Dollars in millions)

2024

Percentage
to Net
Sales


2023

Percentage
to Net
Sales


2024

Percentage
to Net
Sales


2023

Percentage
to Net
Sales

Earnings before interest, taxes, depreciation and amortization (EBITDA)

$

163.3


20.8

%


$

185.5


21.6

%


$

342.0


21.6

%


$

390.5


22.2

%

  Impairment, restructuring and reorganization charges (1)

2.8




4.0




5.3




5.4



  Acquisition-related charges (2)

0.3




0.1




1.2




2.3



  Gain on divestitures and sale of certain assets (3)

(0.2)







(0.9)




(4.8)



Adjusted EBITDA

$

166.2


21.2

%


$

189.6


22.1

%


$

347.6


21.9

%


$

393.4


22.4

%













Industrial Motion













Three Months Ended
June 30,


Six Months Ended
June 30,

(Dollars in millions)

2024

Percentage
to Net
Sales


2023

Percentage
to Net
Sales


2024

Percentage
to Net
Sales


2023

Percentage
to Net
Sales

Earnings before interest, taxes, depreciation and amortization (EBITDA)

$

75.6


19.0

%


$

80.9


19.5

%


$

152.9


19.4

%


$

129.1


16.6

%

  Impairment, restructuring and reorganization charges (1)

1.9




1.5




3.7




30.2



  Acquisition-related charges (2)

2.2




3.1




5.2




3.1



  Loss on divestitures and sale of certain assets (3)




0.4







0.4



Adjusted EBITDA

$

79.7


20.0

%


$

85.9


20.7

%


$

161.8


20.6

%


$

162.8


20.9

%













(1) Impairment, restructuring and reorganization charges (including items recorded in cost of products sold) relate to: (i) plant closures; (ii) the rationalization of certain plants; (iii) severance related to cost reduction initiatives; and (iv) impairment of assets. Impairment, restructuring and reorganization charges for 2023 included $28.3 million related to the impairment of goodwill. The Company re-assesses its operating footprint and cost structure periodically, and makes adjustments as needed that result in restructuring charges. However, management believes these actions are not representative of the Company's core operations. 













(2) The acquisition-related charges represent the inventory step-up impact of the completed acquisitions.













(3) Represents the net (gain) loss resulting from divestitures and sale of certain assets.

 
















Reconciliation of Total Debt to Net Debt, the Ratio of Net Debt to Capital, and the Ratio of Net Debt to Adjusted EBITDA:

(Unaudited)





These reconciliations are provided as additional relevant information about the Company's financial position deemed useful to investors. Capital, used for the ratio of net debt to capital, is a non-GAAP measure defined as total debt less cash and cash equivalents plus total shareholders' equity. Management believes Net Debt, the Ratio of Net Debt to Capital, Adjusted EBITDA (see next page), and the Ratio of Net Debt to Adjusted EBITDA are important measures of the Company's financial position, due to the amount of cash and cash equivalents on hand. The Company presents net debt to adjusted EBITDA because it believes it is more representative of the Company's financial position as it is reflective of the ability to cover its net debt obligations with results from its core operations.






(Dollars in millions)








June 30,
2024

December 31,
2023

Short-term debt, including current portion of long-term debt



$

46.5


$

605.6


Long-term debt



2,129.9


1,790.3


  Total Debt



$

2,176.4


$

2,395.9


Less: Cash and cash equivalents



(469.9)


(418.9)


Net Debt



$

1,706.5


$

1,977.0







Total Equity



$

2,950.1


$

2,702.4

















Ratio of Net Debt to Capital



36.6

%

42.2

%






Adjusted EBITDA for the Twelve Months Ended



$

887.8


$

939.7







Ratio of Net Debt to Adjusted EBITDA



1.9


2.1







Reconciliation of Free Cash Flow to GAAP Net Cash Provided by Operating Activities:

(Unaudited)





Management believes that free cash flow is a non-GAAP measure that is useful to investors because it is a meaningful indicator of cash generated from operating activities available for the execution of its business strategy.






(Dollars in millions)






Three Months Ended
June 30,

Six Months Ended
June 30,


2024

2023

2024

2023

Net cash provided by operating activities

$

124.6


$

144.0


$

173.9


$

222.6


Less: capital expenditures

(37.3)


(49.6)


(81.4)


(91.3)


Free cash flow

$

87.3


$

94.4


$

92.5


$

131.3


 










Reconciliation of EBITDA, After Adjustments, to GAAP Net Income:

(Unaudited)



The following reconciliation is provided as additional relevant information about the Company's performance deemed useful to investors. Management believes consolidated earnings before interest, taxes, depreciation and amortization (EBITDA) is a non-GAAP measure that is useful to investors as it is representative of the Company's performance and that it is appropriate to compare GAAP net income to consolidated EBITDA. Management also believes that the non-GAAP measure of adjusted EBITDA is useful to investors as it is representative of the Company's core operations and is used in the management of the business, including decisions concerning the allocation of resources and assessment of performance.




(Dollars in millions)

Twelve Months Ended
June 30, 2024

Twelve Months Ended
December 31, 2023

Net Income

$

365.4


$

408.0


Provision for income taxes

111.5


122.5


Interest expense

125.1


110.7


Interest income

(13.8)


(9.3)


Depreciation and amortization

214.0


201.3


Consolidated EBITDA

$

802.2


$

833.2


Adjustments:



  Impairment, restructuring and reorganization charges (1)

$

33.8


$

59.3


  Corporate pension and other postretirement benefit related expense (2)

22.5


20.6


  Acquisition-related charges (3)

31.0


31.8


  Gain on divestitures and sale of certain assets (4)

(1.7)


(5.2)


    Total Adjustments

85.6


106.5


Adjusted EBITDA

$

887.8


$

939.7





(1) Impairment, restructuring and reorganization charges (including items recorded in cost of products sold) relate to: (i) plant closures; (ii) the rationalization of certain plants; (iii) severance related to cost reduction initiatives; and (iv) impairment of assets. On March 26, 2024, the Company announced that Richard G. Kyle, President and CEO of the Company would be retiring from his position as CEO and that Tarak Mehta would be appointed CEO on September 5, 2024. Impairment, restructuring and reorganization charges for 2024 include the acceleration of certain stock compensation awards for Mr. Kyle and other one-time costs associated with the transition. In addition, impairment, restructuring and reorganization charges for the twelve months ended December 31, 2023 included $28.3 million related to the impairment of goodwill. The Company re-assesses its operating footprint and cost structure periodically, and makes adjustments as needed that result in restructuring charges. However, management believes these actions are not representative of the Company's core operations.




(2) Corporate pension and other postretirement benefit related expense represents actuarial losses that resulted from the remeasurement of plan assets and obligations as a result of changes in assumptions or experience. The Company recognizes actuarial losses and gains in connection with the annual remeasurement in the fourth quarter, or if specific events trigger a remeasurement.




(3) Acquisition-related charges represent deal-related expenses associated with completed transactions and any resulting inventory step-up impact.




(4) Represents the net gain resulting from divestitures and sale of certain assets.




 






















Reconciliation of Net Sales to Organic Sales

(Unaudited)







The following reconciliation is provided as additional relevant information about the Company's performance deemed useful to investors. Management believes that net sales, excluding the impact of acquisitions, divestitures and foreign currency exchange rate changes, allow investors and the Company to meaningfully evaluate the percentage change in net sales on a comparable basis from period to period.























Three Months Ended
June 30, 2024


Three Months Ended
June 30, 2023


$ Change

% Change

Net sales

$

1,182.3



$

1,272.3



$

(90.0)


(7.1)

%

Less: Acquisitions and divestitures

21.9





21.9


NM

         Currency

(13.7)





(13.7)


NM

Net sales, excluding the impact of acquisitions, divestitures and currency

$

1,174.1



$

1,272.3



$

(98.2)


(7.7)

%















 













Reconciliation of Adjusted Earnings per Share to GAAP Earnings per Share for Full Year 2024 Outlook:

(Unaudited)

The following reconciliation is provided as additional relevant information about the Company's outlook deemed useful to investors. Forecasted full year adjusted diluted earnings per share is an important financial measure that management believes is useful to investors as it is representative of the Company's expectation for the performance of its core business operations.






Low End Earnings
Per Share


High End Earnings
Per Share

Forecasted full year GAAP diluted earnings per share

$

5.00



$

5.20






Forecasted Adjustments:




  Impairment, restructuring and other special items, net (1)

0.20



0.20


  Acquisition-related intangible amortization expense, net

0.80



0.80


Forecasted full year adjusted diluted earnings per share

$

6.00



$

6.20






(1) Impairment, restructuring and other special items, net do not include the impact of any potential future mark-to-market pension and other postretirement remeasurement adjustments, because the amounts will not be known until incurred.





 

Cision View original content to download multimedia:https://www.prnewswire.com/news-releases/timken-reports-second-quarter-2024-results-302210418.html

SOURCE The Timken Company

FAQ

What were Timken's (TKR) Q2 2024 earnings per share?

Timken reported earnings per share of $1.36 for Q2 2024, with adjusted EPS of $1.63.

How much did Timken's (TKR) sales decline in Q2 2024 compared to the previous year?

Timken's sales declined by 7.1% in Q2 2024 compared to the same period last year, with total sales of $1.18 billion.

What is Timken's (TKR) updated full-year 2024 EPS guidance?

Timken updated its full-year 2024 outlook, now expecting EPS of $5.00-$5.20 and adjusted EPS of $6.00-$6.20.

How much did Timken (TKR) return to shareholders in Q2 2024?

Timken returned $53.6 million to shareholders through dividends and share repurchases during Q2 2024.

What was the proceeds from Timken's (TKR) partial sale of Timken India stake in Q2 2024?

Timken generated pre-tax proceeds of approximately $232 million from the partial sale of its stake in Timken India

The Timken Company

NYSE:TKR

TKR Rankings

TKR Latest News

TKR Stock Data

5.89B
70.41M
10.61%
86.45%
2.05%
Tools & Accessories
Ball & Roller Bearings
Link
United States of America
NORTH CANTON