CANTON, Ohio – The Timken Co. has reported record sales of $1.4 billion in the first quarter of 2012, an increase of 13 percent over the same period a year ago. The increase reflects stronger demand across most of the company’s end-markets, pricing, mix and the impact of acquisitions.
The company generated record income in the first quarter of $155.7 million, or $1.58 per diluted share, compared with $112.7 million, or $1.13 per diluted share during the same period a year ago. The increase in first quarter earnings reflects the benefits of improved pricing, demand, mix and the impact of acquisitions, partially offset by higher selling and administrative expenses.
"Our record performance, as well as our confidence in our improved full year earnings outlook, stand as further testimony to the company’s ability to execute at a structurally higher level of performance," said James Griffith, Timken president and CEO. "Around the globe, our company is operating very well, leveraging momentum we see in our target markets, earning new business through our expanded product and services portfolio, and successfully driving those gains to the bottom line."
At the end of the quarter, total debt was $505 million, or 18.7 percent of capital. As of March 31, the company had cash of $359 million, resulting in $146 million of net debt, compared with a net debt position of $47 million as of Dec. 31, 2011. The change reflects strong cash flow from earnings, which was more than offset by working capital requirements of approximately $110 million to support increased demand, as well as discretionary pension contributions of $94 million.
Timken projects 2012 annual earnings to range from $6.10 to $6.40 per diluted share, reflecting improved operating performance and the one-time benefit of CDSOA receipts expected in the second quarter totaling approximately 70 cents per share.
The company expects to generate approximately $565 million in cash from operations, which includes discretionary pension and VEBA trust contributions of approximately $220 million, net of tax. Free cash flow is projected to be $140 million after making capital expenditures of about $335 million and paying roughly $90 million in dividends. In addition, the company anticipates receiving a total of approximately $70 million, net of tax, in CDSOA distributions. Excluding the discretionary pension and VEBA trust contributions, and CDSOA receipts, the company forecasts free cash flow of approximately $290 million in 2012.
