CANTON, OH — Timken has announced sales of $1.1 billion for the third quarter of 2004, up 17 percent compared with the prior year. Earnings in the third quarter were 19 cents per diluted share, compared with a loss of 1 cent a year ago. Excluding special items, adjusted earnings per diluted share were 27 cents, compared to 4 cents last year. The company said this was consistent with prior company estimates of 25 cents to 30 cents per diluted share, excluding special items. These special items, which related primarily to the Torrington integration, included $11 million of pretax expense in the third quarter of 2004, compared to $8 million of pretax expense a year ago.
“The continuing strength of this economic upturn was evident in the third quarter,” said James Griffith, president and CEO. “We are benefiting from operational improvements made over the past year and synergies of the Torrington acquisition. We have been challenged by the speed of the upturn in market demand and unprecedented high raw material costs, but are actively addressing these issues to improve customer service and leverage the increased volume.”
For the first nine months, sales were $3.3 billion, an increase of 20 percent from the prior year. Timken completed its $840 million acquisition of The Torrington Co. on February 18, 2003. Adjusted on a pro forma basis including Torrington for the full nine months of 2003, sales were up 14 percent. Earnings per diluted share for the first nine months were 79 cents in 2004, compared with 17 cents in 2003.
Excluding special items, earnings per diluted share in the first nine months of 2004 were 91 cents, versus 40 cents in 2003. Special items in 2004 included $25.8 million of pretax expense, primarily related to the Torrington integration. This was partially offset by $7.7 million of pretax income received under the Continued Dumping and Subsidy Offset Act.
For the first nine months of 2004, the company achieved pretax integration savings of $56 million through purchasing synergies, workforce consolidation and other integration actions. Based on the annualized savings of $75 million, the company remains on track to achieve its $80 million target in 2005.
Total debt as of September 30 was $914 million. After deducting cash and cash equivalents, net debt was $861 million, or 42.9 percent of capital. Net debt was higher than the June 30 level of $784 million due to cash contributions to pension plans and working capital requirements. The company expects the ratio of net debt to capital at year-end to be lower than last year’s level of 39.3 percent.
The company said it expects demand to remain strong in all of its business groups and to continue benefiting from operating improvements. The company’s earnings estimate for the full year, excluding special items, is $1.20 to $1.25 per diluted share, compared to the previous estimate of $1.15 to $1.25.
For more information about Timken, go to: www.timken.com.
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