Timken Reports Strong Second-Quarter 2021 Results

 

  • Posted record sales of $1.06 billion, up 32 percent from last year
  • Delivered earnings per diluted share of $1.36 on a GAAP basis, with adjusted earnings per diluted share of $1.37
  • Generated strong cash from operations of $147 million and free cash flow of $116 million
  • Maintains earnings outlook; expects 2021 GAAP earnings per diluted share of $5.00 to $5.30 and adjusted earnings per diluted share of $5.15 to $5.45

The Timken Company, a global industrial leader in engineered bearings and power transmission products, today reported secondquarter 2021 sales of $1.06 billion, up 32.3 percent from the same period a year ago. The increase was driven by strong organic growth across most end-market sectors, as well as the benefit of currency translation and the Aurora Bearing acquisition. Secondquarter sales were up nearly 4 percent from the first quarter of 2021.

Timken posted net income of $104.8 million or $1.36 per diluted share in the second quarter, versus net income of $61.9 million or $0.82 per diluted share for the same period a year ago. The year-over-year increase was primarily driven by the impact of higher volume, favorable manufacturing performance and the benefit of currency, partially offset by higher selling, general and administrative (SG&A) expenses, higher material and logistics costs and unfavorable mix. The current period also benefited from lower restructuring and pension remeasurement charges and a lower tax rate versus last year.

Excluding special items (detailed in the attached tables), adjusted net income in the second quarter was $106.1 million or $1.37 per diluted share, versus adjusted net income of $77.0 million or $1.02 per diluted share for the same period in 2020.

Net cash from operations for the second quarter was $147.1 million, and free cash flow was $116 million. The company ended the second quarter with net debt to adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) at 1.7 times. In addition, Timken raised its quarterly dividend by 3 percent to $0.30 per share and paid its 396th consecutive quarterly dividend in June.

Timken achieved record revenue in the second quarter,” said Richard G. Kyle, Timken president and chief executive officer. “While the strong demand created supply chain and logistics challenges globally, we successfully navigated the situation and grew revenue by four percent above our record first quarter. We served our customers well, continued to win new business and delivered solid operating performance. Markets strengthened further as we moved through the quarter, as evidenced by the increase in our backlog.”

SecondQuarter 2021 Segment Results

Process Industries sales of $568.7 million increased 23.4 percent from the same period a year ago. The increase was driven mainly by strong organic growth across most sectors led by distribution, renewable energy and general industrial, as well as the favorable impact of currency translation.

EBITDA for the quarter was $141.2 million or 24.8 percent of sales, compared with EBITDA of $126.3 million or 27.4 percent of sales for the same period a year ago. The increase in EBITDA was driven primarily by the favorable impact of higher volume and currency, partially offset by higher SG&A expenses and material and logistics costs.

Excluding special items (detailed in the attached tables), adjusted EBITDA in the quarter was $142.2 million or 25.0 percent of sales, compared with $128.8 million or 27.9 percent of sales in the second quarter last year.

Mobile Industries sales of $494.2 million increased 44.2 percent compared with the same period a year ago. The increase was driven mainly by higher shipments across most sectors led by off-highway, automotive and heavy truck, and the favorable impact of currency translation.

EBITDA for the quarter was $67.3 million or 13.6 percent of sales, compared with EBITDA of $38.8 million or 11.3 percent of sales for the same period a year ago. The increase in EBITDA reflects the favorable impact of higher volume and related manufacturing performance, partially offset by the impact of higher material and logistics costs and SG&A expenses, and unfavorable mix.

Excluding special items (detailed in the attached tables), adjusted EBITDA in the quarter was $68.7 million or 13.9 percent of sales, compared with $42.0 million or 12.3 percent of sales in the second quarter last year.


Gruetzner