- Sales of $1.07 billion in
the fourth quarter, down 1.6 percent from last year
- Fourth-quarter diluted EPS of $1.01; adjusted EPS of $1.16
- Full-year 2024 diluted EPS of $4.99; adjusted EPS of $5.79
- Cash from operations of $476
million; free cash flow of $306
million for the full year
- Company provides initial estimate for 2025 EPS of
$4.30-$4.80, with adjusted EPS of $5.30-$5.80
|
(USD in
millions)
|
4Q-24
|
4Q-23
|
%
Change
|
FY-2024
|
FY-2023
|
%
Change
|
|
Net Sales
|
$1,073.6
|
$1,091.2
|
(1.6 %)
|
$4,573.0
|
$4,769.0
|
(4.1 %)
|
|
Net Income
Margin
|
6.6 %
|
5.4 %
|
120 bps
|
7.7 %
|
8.3 %
|
(60 bps)
|
|
Adjusted EBITDA
Margin
|
16.6 %
|
17.9 %
|
(130 bps)
|
18.5 %
|
19.7 %
|
(120 bps)
|
|
Diluted EPS
|
$1.01
|
$0.83
|
21.7 %
|
$4.99
|
$5.47
|
(8.8 %)
|
|
Adjusted EPS
|
$1.16
|
$1.37
|
(15.3 %)
|
$5.79
|
$7.05
|
(17.9 %)
|
NORTH
CANTON, Ohio, Feb. 5, 2025
/PRNewswire/ -- The Timken Company (NYSE: TKR; www.timken.com), a
global technology leader in engineered bearings and industrial
motion, today reported fourth-quarter 2024 sales
of $1.07 billion, down 1.6 percent from the same period a
year ago. The decrease was driven primarily by lower end-market
demand in Europe and unfavorable
foreign currency translation, partially offset by the benefit of
acquisitions. Organically, sales were down 2.6 percent from last
year.
Timken posted net income in the fourth quarter
of $71.2 million or $1.01 per diluted share. This compares to
net income of $58.7 million or $0.83 per diluted
share for the same period a year ago. The company's net income
margin in the quarter was 6.6 percent, compared to 5.4 percent in
the fourth quarter of last year.
Excluding special items (detailed in the attached tables),
adjusted net income in the fourth quarter was $81.5 million or $1.16 per diluted share. This compares to
adjusted net income of $97.3 million
or $1.37 per diluted share for the
same period in 2024. Adjusted earnings before interest, taxes,
depreciation and amortization (EBITDA) in the quarter
were $178.2 million or 16.6 percent of sales,
compared with $195.4 million or 17.9 percent of
sales in the fourth quarter of last year.
Net cash provided by operations in the quarter was $178.5 million, and free cash flow was
$124.9 million. During the quarter,
Timken returned $33.0 million of cash
to shareholders through dividends and the repurchase of 120
thousand shares of company stock.
"We delivered a good finish to the year with strong cash flow in
the fourth quarter," said Tarak
Mehta, president and chief executive officer. "Overall, our
team achieved solid results in 2024 in a challenging environment.
Our diverse product portfolio, differentiated technology, and
performance culture create a strong foundation for profitable
growth led by customer-centric innovation."
2024 Full-Year Results and Highlights
For 2024, sales were $4.6 billion,
down 4.1 percent compared with 2023. The decrease was primarily
driven by lower end-market demand, including a significant decline
in renewable energy in China and
broad weakness in Europe, and
unfavorable currency translation, partially offset by the benefit
of acquisitions (net) and the impact of higher pricing.
Organically, 2024 sales were down 5.8 percent versus 2023.
Net income was $352.7 million or
$4.99 per diluted share for the year,
compared with net income of $394.1
million or $5.47 per diluted
share a year ago. The company's net income margin for the year was
7.7 percent, compared to 8.3 percent in 2023.
Excluding special items, adjusted net income was $409.4 million or $5.79 per diluted share in 2024. This compares
with adjusted net income of $508.1
million or adjusted earnings of $7.05 per diluted share in 2023. Adjusted EBITDA
for the year was $844.8 million or 18.5 percent
of sales, compared with $939.7 million or 19.7
percent of sales in 2023.
Net cash from operations for the full year was $475.6 million, and free cash flow was
$305.6 million. During the year, the
company reduced total debt by $333.2
million and net debt by $287.5
million. Timken ended the year with net debt to adjusted
EBITDA at 2.0 times, well within its 1.5-to-2.5 times target
range.
Among other highlights in 2024, the company:
- Expanded its Industrial Motion segment with the acquisition of
CGI, Inc., a manufacturer of precision drive systems for the
high-growth medical robotics and automation sectors;
- Increased its quarterly dividend, with 2024 marking its
eleventh consecutive year of higher annual dividends. In total,
Timken returned $136.6 million to
shareholders during the year through dividends and the repurchase
of 500 thousand shares of company stock;
- Executed a CEO succession plan and welcomed Tarak Mehta to Timken as its new president and
CEO in September; and
- Was named one of the world's most innovative companies by
Fast Company, and one of the World's Most Ethical
Companies® for the 13th time by
Ethisphere Institute, reflecting the company's continued commitment
to customer-centric innovation and corporate social
responsibility.
Fourth-Quarter 2024 Segment
Results1
Engineered Bearings sales
of $707.7 million decreased 2.3 percent from the same
period a year ago. The decrease was driven primarily by lower
demand in Europe and unfavorable
foreign currency translation, partially offset by higher industrial
distribution demand in the Americas and Asia.
Adjusted EBITDA in the quarter was $122.0 million
or 17.2 percent of sales, compared with $132.5
million or 18.3 percent of sales in the fourth quarter of last
year. The decrease in adjusted EBITDA was driven primarily by the
impact of lower volume, higher manufacturing and logistics costs,
and unfavorable foreign currency, partially offset by favorable
price/mix.
Industrial Motion sales of $365.9 million
decreased 0.3 percent compared with the same period a year ago, as
higher drive systems revenue and the benefit of acquisitions was
slightly more than offset by lower demand across most other
platforms.
Adjusted EBITDA in the quarter was $70.7 million
or 19.3 percent of sales, compared
with $81.6 million or 22.2 percent of sales in the
fourth quarter of last year. The decrease in adjusted EBITDA was
driven primarily by lower volume and higher manufacturing costs
compared to last year, partially offset by favorable price/mix,
lower SG&A expenses and the benefit of acquisitions.
2025 Outlook
Given the continued economic uncertainty across the globe, the
company is planning for 2025 revenue in the range of -4% to -1% in
total compared to 2024, including unfavorable foreign currency
translation. Timken is setting an initial outlook for 2025 earnings
per diluted share in the range of $4.30 to $4.80 and
adjusted earnings per diluted share in the range of $5.30 to $5.80. The
company is implementing cost reduction actions that are expected to
generate gross savings of approximately $75
million in 2025.
"We expect global economic conditions to remain challenging to
start the year," said Mehta. "Our team is focused on operational
excellence and other initiatives to deliver resilient performance
in 2025. We expect margins to be supported by cost-reduction
actions and are planning to generate higher free cash flow with
improved working capital performance."
Mehta concluded, "We believe margins are near trough levels, and
Timken is well positioned to capitalize on an industrial recovery
when it occurs. Looking ahead, I see many opportunities to
strengthen our product portfolio, improve our performance, and
deliver higher returns for Timken shareholders."
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, February 5,
2025
|
|
11:00 a.m. Eastern
Time
|
|
Live Dial-In:
833-470-1428
|
|
Or
404-975-4839
|
|
Access Code:
414077
|
|
(Call in 10 minutes
prior to be included.)
|
|
|
|
Conference Call
Replay:
|
Replay Dial-In
available through
|
|
February 19,
2025:
|
|
866-813-9403 or
929-458-6194
|
|
Replay Passcode:
372475
|
|
|
|
Live Webcast:
|
http://investors.timken.com
|
|
|
|
Register in
advance:
|
https://tmkn.biz/41ZeOW8
|
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 more than 125 years, Timken has used its
specialized expertise to innovate and create customer-centric
solutions that increase reliability and efficiency. Timken
posted $4.6 billion in sales in 2024 and employs
approximately 19,000 people globally, operating from 45
countries.
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
"2025 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 fourth
quarter and full-year of 2024; fluctuations in customer 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, 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); changes in wages, 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; fluctuations in
currency valuations or interest rates; 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; 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; the rapidly evolving global regulatory landscape and
the corresponding heightened operational complexity and compliance
risks; restrictions on the use of, or claims or remediation
associated with, per- and polyfluoroalkyl substances or
polytetrafluoroethylene; 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; 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, capital investments, and cost reduction
actions. 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
neil.frohnapple@timken.com
1 Following a review of the metrics
management utilizes to evaluate segment performance, the company
has changed its primary measurement of segment profit and loss to
segment adjusted EBITDA and segment adjusted EBITDA margin instead
of segment EBITDA and segment EBITDA margin, which were used
previously.
|
The Timken
Company
|
|
|
|
|
|
|
CONDENSED
CONSOLIDATED STATEMENTS OF INCOME
|
|
|
|
|
|
|
(Dollars in
millions, except share data) (Unaudited)
|
|
|
|
|
|
|
Three Months
Ended
December 31,
|
|
Twelve Months
Ended
December 31,
|
|
2024
|
2023
|
|
2024
|
2023
|
|
Net sales
|
$
|
1,073.6
|
|
$
|
1,091.2
|
|
|
$
|
4,573.0
|
|
$
|
4,769.0
|
|
|
Cost of products
sold
|
748.5
|
|
759.9
|
|
|
3,132.3
|
|
3,259.9
|
|
|
Selling, general &
administrative expenses
|
187.5
|
|
189.5
|
|
|
752.0
|
|
740.8
|
|
|
Amortization of
intangible assets
|
19.3
|
|
17.4
|
|
|
78.0
|
|
65.7
|
|
|
Impairment and
restructuring charges
|
5.3
|
|
5.2
|
|
|
13.4
|
|
45.5
|
|
|
Gain on sale of real
estate
|
—
|
|
—
|
|
|
(13.8)
|
|
—
|
|
|
Operating Income
|
113.0
|
|
119.2
|
|
|
611.1
|
|
657.1
|
|
|
Non-service pension and
other postretirement income (expense)
|
0.3
|
|
(23.2)
|
|
|
(2.6)
|
|
(24.0)
|
|
|
Other income (expense),
net
|
1.9
|
|
(7.0)
|
|
|
(4.1)
|
|
(1.2)
|
|
|
Interest expense,
net
|
(24.4)
|
|
(27.5)
|
|
|
(110.2)
|
|
(101.4)
|
|
|
Income Before Income Taxes
|
90.8
|
|
61.5
|
|
|
494.2
|
|
530.5
|
|
|
Provision for income
taxes
|
15.7
|
|
(0.4)
|
|
|
118.9
|
|
122.5
|
|
|
Net Income
|
75.1
|
|
61.9
|
|
|
375.3
|
|
408.0
|
|
|
Less: Net income
attributable to noncontrolling interest
|
3.9
|
|
3.2
|
|
|
22.6
|
|
13.9
|
|
|
Net Income Attributable to The Timken
Company
|
$
|
71.2
|
|
$
|
58.7
|
|
|
$
|
352.7
|
|
$
|
394.1
|
|
|
Net Income per Common Share Attributable to The
Timken Company Common Shareholders
|
|
|
|
|
|
|
Basic Earnings per
share
|
$
|
1.02
|
|
$
|
0.84
|
|
|
$
|
5.02
|
|
$
|
5.52
|
|
|
Diluted Earnings per
share
|
$
|
1.01
|
|
$
|
0.83
|
|
|
$
|
4.99
|
|
$
|
5.47
|
|
|
Average Shares Outstanding
|
70,057,654
|
|
70,263,115
|
|
|
70,198,067
|
|
71,377,656
|
|
|
Average Shares Outstanding - assuming
dilution
|
70,626,362
|
|
70,932,017
|
|
|
70,750,482
|
|
72,081,884
|
|
|
BUSINESS
SEGMENTS
|
|
|
|
|
|
(Unaudited)
|
|
|
|
|
|
Three Months
Ended
December 31,
|
Twelve Months
Ended
December 31,
|
|
(Dollars in
millions)
|
2024
|
2023
|
2024
|
2023
|
|
Engineered Bearings
|
|
|
|
|
|
Net sales
|
$
|
707.7
|
|
$
|
724.2
|
|
$
|
3,034.3
|
|
$
|
3,257.7
|
|
|
Adjusted Earnings
before interest, taxes, depreciation and amortization
(EBITDA) (1)
|
$
|
122.0
|
|
$
|
132.5
|
|
$
|
608.2
|
|
$
|
682.6
|
|
|
Adjusted EBITDA
Margin (1)
|
17.2
|
%
|
18.3
|
%
|
20.0
|
%
|
21.0
|
%
|
|
Industrial Motion
|
|
|
|
|
|
Net sales
|
$
|
365.9
|
|
$
|
367.0
|
|
$
|
1,538.7
|
|
$
|
1,511.3
|
|
|
Adjusted Earnings
before interest, taxes, depreciation and amortization
(EBITDA) (1)
|
$
|
70.7
|
|
$
|
81.6
|
|
$
|
306.5
|
|
$
|
319.8
|
|
|
Adjusted EBITDA
Margin (1)
|
19.3
|
%
|
22.2
|
%
|
19.9
|
%
|
21.2
|
%
|
|
Unallocated corporate
expense (1)
|
$
|
(14.5)
|
|
$
|
(18.7)
|
|
$
|
(69.9)
|
|
$
|
(62.7)
|
|
|
|
|
|
|
|
Consolidated
|
|
|
|
|
|
Net sales
|
$
|
1,073.6
|
|
$
|
1,091.2
|
|
$
|
4,573.0
|
|
$
|
4,769.0
|
|
|
Adjusted Earnings
before interest, taxes, depreciation and amortization
(EBITDA) (1)
|
$
|
178.2
|
|
$
|
195.4
|
|
$
|
844.8
|
|
$
|
939.7
|
|
|
Adjusted EBITDA
Margin (1)
|
16.6
|
%
|
17.9
|
%
|
18.5
|
%
|
19.7
|
%
|
|
|
|
|
|
|
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 Company. See below for reconciliation of
Consolidated EBITDA and Consolidated EBITDA Margin.
|
|
|
|
|
|
|
(1)Consolidated adjusted EBITDA is a
non-GAAP measure defined as EBITDA less impairment, restructuring
and reorganization charges, acquisition costs, including
transaction costs and the amortization of the inventory step-up,
actuarial gains and losses associated with the remeasurement of the
Company's defined benefit pension and other postretirement benefit
plans, property losses and recoveries, gains and losses on the sale
of real estate and divestitures, and other items from time to time
that are not part of the Company's core operations. Consolidated
adjusted EBITDA Margin is a non-GAAP measure defined as
Consolidated adjusted EBITDA as a percentage of net sales.
Management believes Consolidated adjusted EBITDA and Consolidated
adjusted 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 adjusted EBITDA and adjusted EBITDA Margin
is useful to investors as these measures are representative of the
core operations of the Company. See below for reconciliation of
Consolidated Adjusted EBITDA and Consolidated Adjusted EBITDA
Margin. Segment Adjusted EBITDA is the measurement of segment
profit and loss. The Company's Chief Operating Decision Maker
("CODM") utilizes Segment Adjusted EBITDA and Segment Adjusted
EBITDA Margin to evaluate segment performance and allocates
resources. See the Company's Form 10-K for a reconciliation of
Segment Adjusted EBITDA to income before taxes.
|
|
CONDENSED
CONSOLIDATED BALANCE SHEETS
|
|
|
|
(Dollars in
millions)
|
(Unaudited)
|
|
|
|
December 31,
2024
|
|
December 31,
2023
|
|
ASSETS
|
|
|
|
|
Cash and cash
equivalents
|
$
|
373.2
|
|
|
$
|
418.9
|
|
|
Restricted
cash
|
0.4
|
|
|
0.4
|
|
|
Accounts receivable,
net
|
664.6
|
|
|
671.7
|
|
|
Unbilled
receivables
|
140.8
|
|
|
144.5
|
|
|
Inventories,
net
|
1,195.6
|
|
|
1,229.1
|
|
|
Other current
assets
|
142.3
|
|
|
170.3
|
|
|
Total Current
Assets
|
2,516.9
|
|
|
2,634.9
|
|
|
Property, plant and
equipment, net
|
1,306.9
|
|
|
1,311.9
|
|
|
Operating lease
assets
|
130.6
|
|
|
119.7
|
|
|
Goodwill and other
intangible assets
|
2,389.8
|
|
|
2,401.0
|
|
|
Other assets
|
66.8
|
|
|
74.2
|
|
|
Total Assets
|
$
|
6,411.0
|
|
|
$
|
6,541.7
|
|
|
LIABILITIES
|
|
|
|
|
Accounts
payable
|
$
|
321.7
|
|
|
$
|
367.2
|
|
|
Short-term debt,
including current portion of long-term debt
|
13.0
|
|
|
605.6
|
|
|
Income taxes
|
24.4
|
|
|
19.9
|
|
|
Accrued
expenses
|
461.4
|
|
|
478.6
|
|
|
Total Current
Liabilities
|
820.5
|
|
|
1,471.3
|
|
|
Long-term
debt
|
2,049.7
|
|
|
1,790.3
|
|
|
Accrued pension
benefits
|
157.7
|
|
|
172.3
|
|
|
Accrued postretirement
benefits
|
29.8
|
|
|
30.2
|
|
|
Long-term operating
lease liabilities
|
84.0
|
|
|
78.7
|
|
|
Other non-current
liabilities
|
285.2
|
|
|
296.5
|
|
|
Total
Liabilities
|
3,426.9
|
|
|
3,839.3
|
|
|
EQUITY
|
|
|
|
|
The Timken Company
shareholders' equity
|
2,826.5
|
|
|
2,582.4
|
|
|
Noncontrolling
interest
|
157.6
|
|
|
120.0
|
|
|
Total Equity
|
2,984.1
|
|
|
2,702.4
|
|
|
Total Liabilities and
Equity
|
$
|
6,411.0
|
|
|
$
|
6,541.7
|
|
|
|
|
|
|
CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS
|
|
|
|
|
|
|
(Unaudited)
|
|
|
|
|
|
|
Three Months
Ended
December 31,
|
|
Twelve Months
Ended
December 31,
|
|
(Dollars in
millions)
|
2024
|
2023
|
|
2024
|
2023
|
|
Cash Provided by (Used
in)
|
|
|
|
|
|
|
OPERATING ACTIVITIES
|
|
|
|
|
|
|
Net Income
|
$
|
75.1
|
|
$
|
61.9
|
|
|
$
|
375.3
|
|
$
|
408.0
|
|
|
Adjustments to
reconcile net income to net cash provided by operating
activities:
|
|
|
|
|
|
|
Depreciation and
amortization
|
56.2
|
|
52.3
|
|
|
221.8
|
|
201.3
|
|
|
Impairment
charges
|
1.5
|
|
—
|
|
|
3.5
|
|
33.2
|
|
|
Stock-based
compensation expense
|
9.2
|
|
7.7
|
|
|
25.9
|
|
30.6
|
|
|
Pension and other
postretirement expense
|
0.4
|
|
23.9
|
|
|
5.3
|
|
26.5
|
|
|
Pension and other
postretirement benefit contributions and payments
|
(3.3)
|
|
(5.7)
|
|
|
(26.2)
|
|
(29.8)
|
|
|
Changes in operating
assets and liabilities:
|
|
|
|
|
|
|
Accounts
receivable
|
74.3
|
|
58.6
|
|
|
(14.2)
|
|
71.6
|
|
|
Unbilled
receivables
|
21.6
|
|
(8.1)
|
|
|
3.3
|
|
(40.4)
|
|
|
Inventories
|
22.1
|
|
24.4
|
|
|
9.6
|
|
72.0
|
|
|
Accounts
payable
|
(20.4)
|
|
1.4
|
|
|
(37.1)
|
|
(57.4)
|
|
|
Accrued
expenses
|
(18.2)
|
|
(33.2)
|
|
|
(7.1)
|
|
(47.6)
|
|
|
Income
taxes
|
(34.5)
|
|
(56.8)
|
|
|
(63.5)
|
|
(120.0)
|
|
|
Other,
net
|
(5.5)
|
|
1.9
|
|
|
(21.0)
|
|
(2.8)
|
|
|
Net Cash Provided by
Operating Activities
|
$
|
178.5
|
|
$
|
128.3
|
|
|
$
|
475.6
|
|
$
|
545.2
|
|
|
INVESTING ACTIVITIES
|
|
|
|
|
|
|
Capital
expenditures
|
$
|
(53.6)
|
|
$
|
(52.9)
|
|
|
$
|
(170.0)
|
|
$
|
(187.8)
|
|
|
Acquisitions, net of
cash received
|
0.3
|
|
(174.1)
|
|
|
(167.4)
|
|
(638.8)
|
|
|
Proceeds from
divestitures, net of cash divested, and disposals of property,
plant and equipment
|
0.1
|
|
9.1
|
|
|
17.9
|
|
15.3
|
|
|
Investments in
short-term marketable securities, net
|
(1.3)
|
|
11.3
|
|
|
15.2
|
|
5.7
|
|
|
Other, net
|
(0.1)
|
|
(0.7)
|
|
|
(0.3)
|
|
(0.9)
|
|
|
Net Cash Used in
Investing Activities
|
$
|
(54.6)
|
|
$
|
(207.3)
|
|
|
$
|
(304.6)
|
|
$
|
(806.5)
|
|
|
FINANCING ACTIVITIES
|
|
|
|
|
|
|
Cash dividends paid to
shareholders
|
$
|
(23.9)
|
|
$
|
(23.2)
|
|
|
$
|
(96.1)
|
|
$
|
(94.0)
|
|
|
Purchase of treasury
shares
|
(9.1)
|
|
(32.5)
|
|
|
(40.5)
|
|
(250.9)
|
|
|
Proceeds from exercise
of stock options
|
0.1
|
|
0.5
|
|
|
5.6
|
|
21.8
|
|
|
Payments related to tax
withholding for stock-based compensation
|
—
|
|
(0.6)
|
|
|
(10.0)
|
|
(17.0)
|
|
|
Net (payments) proceeds
from credit facilities
|
(77.1)
|
|
186.1
|
|
|
(533.2)
|
|
223.9
|
|
|
Net (payments) proceeds
on long-term debt
|
(30.6)
|
|
(14.5)
|
|
|
254.9
|
|
184.0
|
|
|
Proceeds on sale of
shares in Timken India Limited
|
—
|
|
—
|
|
|
232.3
|
|
284.8
|
|
|
Other, net
|
—
|
|
(4.4)
|
|
|
(7.8)
|
|
(5.5)
|
|
|
Net Cash (Used in)
Provided by Financing Activities
|
$
|
(140.6)
|
|
$
|
111.4
|
|
|
$
|
(194.8)
|
|
$
|
347.1
|
|
|
Effect of exchange rate
changes on cash
|
(23.1)
|
|
11.8
|
|
|
(21.9)
|
|
(7.2)
|
|
|
(Decrease) Increase in
Cash, Cash Equivalents and Restricted Cash
|
$
|
(39.8)
|
|
$
|
44.2
|
|
|
$
|
(45.7)
|
|
$
|
78.6
|
|
|
Cash, Cash Equivalents
and Restricted Cash at Beginning of Period
|
413.4
|
|
375.1
|
|
|
419.3
|
|
340.7
|
|
|
Cash, Cash Equivalents
and Restricted Cash at End of Period
|
$
|
373.6
|
|
$
|
419.3
|
|
|
$
|
373.6
|
|
$
|
419.3
|
|
|
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
December 31,
|
|
Twelve Months
Ended
December 31,
|
|
2024
|
|
EPS
|
2023
|
|
EPS
|
|
2024
|
|
EPS
|
|
2023
|
|
EPS
|
|
Net Income Attributable
to The Timken Company
|
$
|
71.2
|
|
|
$
|
1.01
|
|
$
|
58.7
|
|
|
$
|
0.83
|
|
|
$
|
352.7
|
|
|
$
|
4.99
|
|
|
$
|
394.1
|
|
|
$
|
5.47
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjustments: (1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Acquisition intangible amortization
|
$
|
19.3
|
|
|
|
$
|
17.4
|
|
|
|
|
$
|
78.0
|
|
|
|
|
$
|
65.7
|
|
|
|
|
Impairment, restructuring and reorganization charges
(2)
|
6.3
|
|
|
|
12.2
|
|
|
|
|
19.1
|
|
|
|
|
60.1
|
|
|
|
|
Corporate
pension and other postretirement benefit related (income)
expense (3)
|
(1.3)
|
|
|
|
22.3
|
|
|
|
|
(1.3)
|
|
|
|
|
20.6
|
|
|
|
|
Acquisition-related charges (4)
|
2.2
|
|
|
|
19.0
|
|
|
|
|
13.0
|
|
|
|
|
31.8
|
|
|
|
|
Loss
(gain) on divestitures and sale of certain
assets (5)
|
—
|
|
|
|
0.7
|
|
|
|
|
(14.7)
|
|
|
|
|
(5.2)
|
|
|
|
|
Tax
indemnification and related items
|
(1.1)
|
|
|
|
—
|
|
|
|
|
(1.1)
|
|
|
|
|
—
|
|
|
|
|
CEO
succession expenses (6)
|
1.0
|
|
|
|
—
|
|
|
|
|
3.7
|
|
|
|
|
—
|
|
|
|
|
Property
losses and related expenses (7)
|
0.1
|
|
|
|
—
|
|
|
|
|
1.2
|
|
|
|
|
—
|
|
|
|
|
Noncontrolling interest of above adjustments
|
—
|
|
|
|
(0.1)
|
|
|
|
|
(0.2)
|
|
|
|
|
(2.1)
|
|
|
|
|
Provision
for income taxes (8)
|
(16.2)
|
|
|
|
(32.9)
|
|
|
|
|
(41.0)
|
|
|
|
|
(56.9)
|
|
|
|
|
Total
Adjustments:
|
10.3
|
|
|
0.15
|
|
38.6
|
|
|
0.54
|
|
|
56.7
|
|
|
0.80
|
|
|
114.0
|
|
|
1.58
|
|
|
Adjusted Net Income
Attributable to The Timken Company
|
$
|
81.5
|
|
|
$
|
1.16
|
|
$
|
97.3
|
|
|
$
|
1.37
|
|
|
$
|
409.4
|
|
|
$
|
5.79
|
|
|
$
|
508.1
|
|
|
$
|
7.05
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(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. 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) expense represents
actuarial (gains) and losses 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 loss (gain)
resulting from divestitures and sale of certain assets. Gain on
divestitures and sale of certain assets for twelve months ended
December 31, 2024 included $13.8 million gain related to the sale
of the Gaffney, South Carolina plant.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(6) 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. CEO succession expenses include
the acceleration of certain stock compensation awards for Mr. Kyle
and other one-time costs associated with the transition.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(7) Represents property loss and
related expenses incurred during the periods presented resulting
from a fire that occurred during the second quarter of 2024 at one
of the Company's plants in Slovakia.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(8) 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
December 31,
|
|
Twelve Months
Ended
December 31,
|
|
2024
|
Percentage to
Net Sales
|
2023
|
Percentage to
Net Sales
|
|
2024
|
Percentage to
Net Sales
|
2023
|
Percentage to
Net Sales
|
|
Net Income
|
$
|
75.1
|
|
7.0
|
%
|
$
|
61.9
|
|
5.7
|
%
|
|
$
|
375.3
|
|
8.2
|
%
|
$
|
408.0
|
|
8.6
|
%
|
|
|
|
|
|
|
|
|
|
|
|
Provision for income
taxes
|
15.7
|
|
|
(0.4)
|
|
|
|
118.9
|
|
|
122.5
|
|
|
|
Interest
expense
|
28.0
|
|
|
30.8
|
|
|
|
125.1
|
|
|
110.7
|
|
|
|
Interest
income
|
(3.6)
|
|
|
(3.3)
|
|
|
|
(14.9)
|
|
|
(9.3)
|
|
|
|
Depreciation and
amortization
|
56.2
|
|
|
52.3
|
|
|
|
221.8
|
|
|
201.3
|
|
|
|
Consolidated
EBITDA
|
$
|
171.4
|
|
16.0
|
%
|
$
|
141.3
|
|
12.9
|
%
|
|
$
|
826.2
|
|
18.1
|
%
|
$
|
833.2
|
|
17.5
|
%
|
|
|
|
|
|
|
|
|
|
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
Impairment, restructuring and reorganization
charges (1)
|
$
|
5.9
|
|
|
$
|
12.1
|
|
|
|
$
|
17.8
|
|
|
$
|
59.3
|
|
|
|
Corporate
pension and other postretirement benefit related (income)
expense (2)
|
(1.3)
|
|
|
22.3
|
|
|
|
(1.3)
|
|
|
20.6
|
|
|
|
Acquisition-related charges (3)
|
2.2
|
|
|
19.0
|
|
|
|
13.0
|
|
|
31.8
|
|
|
|
Loss
(gain) on divestitures and sale of certain
assets (4)
|
—
|
|
|
0.7
|
|
|
|
(14.7)
|
|
|
(5.2)
|
|
|
|
CEO
succession expenses (5)
|
1.0
|
|
|
—
|
|
|
|
3.7
|
|
|
—
|
|
|
|
Property
losses and related expenses (6)
|
0.1
|
|
|
—
|
|
|
|
1.2
|
|
|
—
|
|
|
|
Tax
indemnification and related items
|
(1.1)
|
|
|
—
|
|
|
|
(1.1)
|
|
|
—
|
|
|
|
Total Adjustments
|
6.8
|
|
0.6
|
%
|
54.1
|
|
5.0
|
%
|
|
18.6
|
|
0.4
|
%
|
106.5
|
|
2.2
|
%
|
|
Adjusted
EBITDA
|
$
|
178.2
|
|
16.6
|
%
|
$
|
195.4
|
|
17.9
|
%
|
|
$
|
844.8
|
|
18.5
|
%
|
$
|
939.7
|
|
19.7
|
%
|
|
|
|
|
|
|
|
|
|
|
|
(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. 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) expense represents
actuarial (gains) and losses 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 loss (gain)
resulting from divestitures and sale of certain assets. Gain on
divestitures and sale of certain assets for the twelve months ended
December 31, 2024 included $13.8 million gain related to the sale
of the Gaffney, South Carolina plant.
|
|
|
|
|
|
|
|
|
|
|
|
(5) 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. CEO succession expenses include the acceleration
of certain stock compensation awards for Mr. Kyle and other
one-time costs associated with the transition.
|
|
|
|
|
|
|
|
|
|
|
|
(6) Represents property loss and
related expenses incurred during the periods presented resulting
from a fire that occurred during the second quarter of 2024 at one
of the Company's plants in Slovakia.
|
|
|
|
|
|
|
|
|
|
|
|
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 prior 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)
|
|
|
|
|
|
|
|
December 31,
2024
|
December 31,
2023
|
|
Short-term debt,
including current portion of long-term debt
|
|
|
$
|
13.0
|
|
$
|
605.6
|
|
|
Long-term
debt
|
|
|
2,049.7
|
|
1,790.3
|
|
|
Total
Debt
|
|
|
$
|
2,062.7
|
|
$
|
2,395.9
|
|
|
Less: Cash and cash
equivalents
|
|
|
(373.2)
|
|
(418.9)
|
|
|
Net Debt
|
|
|
$
|
1,689.5
|
|
$
|
1,977.0
|
|
|
|
|
|
|
|
Total Equity
|
|
|
$
|
2,984.1
|
|
$
|
2,702.4
|
|
|
|
|
|
|
|
Ratio of Net Debt to
Capital
|
|
|
36.1
|
%
|
42.2
|
%
|
|
|
|
|
|
|
Adjusted EBITDA for the
Twelve Months Ended
|
|
|
$
|
844.8
|
|
$
|
939.7
|
|
|
|
|
|
|
|
Ratio of Net Debt to
Adjusted EBITDA
|
|
|
2.0
|
|
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
December 31,
|
Twelve Months
Ended
December 31,
|
|
2024
|
2023
|
2024
|
2023
|
|
Net cash provided by
operating activities
|
$
|
178.5
|
|
$
|
128.3
|
|
$
|
475.6
|
|
$
|
545.2
|
|
|
Less: capital
expenditures
|
(53.6)
|
|
(52.9)
|
|
(170.0)
|
|
(187.8)
|
|
|
Free cash
flow
|
$
|
124.9
|
|
$
|
75.4
|
|
$
|
305.6
|
|
$
|
357.4
|
|
|
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.
|
|
|
Twelve Months
Ended
December 31, 2024
|
|
Twelve Months Ended
December 31, 2023
|
|
$ Change
|
% Change
|
|
Net sales
|
$
|
4,573.0
|
|
|
$
|
4,769.0
|
|
|
$
|
(196.0)
|
|
(4.1)
|
%
|
|
Less: Acquisitions and
divestitures
|
113.7
|
|
|
—
|
|
|
113.7
|
|
NM
|
|
Currency
|
(33.6)
|
|
|
—
|
|
|
(33.6)
|
|
NM
|
|
Net sales, excluding
the impact of acquisitions, divestitures and currency
|
$
|
4,492.9
|
|
|
$
|
4,769.0
|
|
|
$
|
(276.1)
|
|
(5.8)
|
%
|
|
|
|
|
|
|
|
|
Reconciliation of
Adjusted Earnings per Share to GAAP Earnings per Share for Full
Year 2025 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
|
$
|
4.30
|
|
|
$
|
4.80
|
|
|
|
|
|
|
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
|
$
|
5.30
|
|
|
$
|
5.80
|
|
|
|
|
|
|
(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.
|
|
|
|
|
View original content to download
multimedia:https://www.prnewswire.com/news-releases/timken-reports-fourth-quarter-and-full-year-2024-results-302368192.html
SOURCE The Timken Company
