Sales of $1.19 billion, down 5.7 percent from last year First-quarter earnings per share of $1.46; adjusted EPS of $1.77 Strong margin performance in the quarter, with net income margin of 8.7 percent and adjusted EBITDA margin of 20.7 percent Raises full-year 2024 outlook; now expects EPS of $5.10-$5.40, with adjusted EPS of $6.00-$6.30, on improved organic revenue NORTH CANTON, Ohio, April 30, 2024 /PRNewswire/ -- The Timken Company (NYSE:TKR, www.timken.com)), a global technology leader in engineered bearings and industrial motion, today reported first-quarter 2024 sales of $1.19 billion, down 5.7 percent from the same period a year ago. The decrease was driven by lower demand, including a significant decline in renewable energy in China, and unfavorable foreign currency translation, partially offset by the benefit of acquisitions (net of divestitures) and favorable pricing. Timken posted net income in the first quarter of $103.5 million or $1.46 per diluted share. This compares to net income of $122.3 million or $1.67 per diluted share for the same period a year ago. The company's net income margin in the quarter was 8.7 percent, compared to 9.7 percent in the first quarter of last year.   Excluding special items (detailed in the attached tables), adjusted net income in the first quarter was $125.7 million or $1.77 per diluted share. This compares to adjusted net income of $153.5 million or $2.09 per diluted share for the same period in 2023. Adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) in the quarter was $246.4 million or 20.7 percent of sales, compared with $265.5 million or 21 percent of sales in the first quarter of last year. During the quarter, Timken returned $24.5 million of cash to shareholders through the payment of its 407th consecutive quarterly dividend. As of the end of the first quarter, the company's net debt-to-adjusted EBITDA ratio was 2.1 times. "Timken posted solid results in the first quarter," said Richard G. Kyle, Timken president and chief executive officer. "While below last year's record level, revenue in the quarter modestly exceeded our expectations. We also delivered strong margin performance, with improved execution and favorable price-cost largely mitigating the impact of lower year-over-year organic revenue. Our results continue to demonstrate the strength and resiliency of Timken's diverse portfolio and differentiated business model through dynamic economic conditions."   In March, Timken announced its CEO succession plan, naming industry veteran Tarak Mehta as its next president and CEO, succeeding Richard G. Kyle. Mehta will join Timken in September, and Kyle, who has led the company since 2014, will move into an advisory role for a short transition period before retiring. Kyle will continue to serve on the company's board of directors. Among other first-quarter highlights, Ethisphere recognized Timken as one of the World's Most Ethical Companies for the 13th time, and Fast Company featured Timken on its list of the World's Most Innovative Companies®. First-Quarter 2024 Segment Results Engineered Bearings sales of $802.5 million decreased 10.9 percent from the same period a year ago. The decrease was driven by lower demand and unfavorable foreign currency translation, partially offset by higher pricing. Among market sectors, renewable energy was down significantly in the quarter, off-highway was also lower, while rail was notably higher. EBITDA for the quarter was $178.7 million or 22.3 percent of sales, compared with EBITDA of $205.0 million or 22.8 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 operating cost performance. Excluding special items, adjusted EBITDA in the quarter was $181.4 million or 22.6 percent of sales, compared with $203.8 million or 22.6 percent of sales in the first quarter of last year. Industrial Motion sales of $387.8 million increased 7.1 percent compared with the same period a year ago. The increase was driven by the benefit of acquisitions and higher pricing, partially offset by lower demand. Most platforms were down from last year, with the belts and chain platform posting the largest decline, while services revenue was notably up. EBITDA for the quarter was $77.3 million or 19.9 percent of sales, compared with EBITDA of $48.2 million or 13.3 percent of sales for the same period a year ago. The increase in EBITDA was driven primarily by lower impairment charges, the benefit of acquisitions, improved operating cost performance and favorable price/mix, partially offset by the impact of lower volume. Excluding special items, adjusted EBITDA in the quarter was $82.1 million or 21.2 percent of sales, compared with $76.9 million or 21.2 percent of sales in the first quarter of last year. 2024 Outlook Timken is increasing its full-year 2024 outlook, with earnings per diluted share now forecasted to be in the range of $5.10 to $5.40 and adjusted earnings per diluted share in the range of $6.00 to $6.30. The company now expects revenue to be down 2 to 4 percent in total from 2023. "We are increasing our full-year outlook for revenue, margins and earnings per share to take into account our first-quarter performance and expectations for the rest of the year," said Kyle. "Our revenue outlook reflects improvement across multiple end-market sectors, offset partially by lower expectations for wind energy and unfavorable foreign currency translation. On the bottom line, we expect improved mix and strong operational execution to drive higher margins and earnings per share as compared to our prior outlook." Kyle concluded, "While the macroeconomic environment remains uncertain in many areas, Timken has a proven track record of achieving higher and sustainable levels of performance through cycles. Our first-quarter results and full-year outlook reflect the positive changes to the Timken portfolio over the last decade. We are confident in our ability to deliver solid results in 2024, and we remain focused on advancing our profitable growth strategy to drive shareholder value for years to come." 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:              Tuesday, April 30, 2024 11:00 a.m. Eastern Time Live Dial-In: 833-470-1428 Or 404-975-4839 Access Code: 660675 (Call in 10 minutes prior to be included.) Conference Call Replay:  Replay Dial-In available through May 14, 2024: 866-813-9403 or 929-458-6194 Replay Access Code: 639103 Live Webcast:                  http://investors.timken.com 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 Companies and America's Greatest Workplaces for Diversity by Newsweek, 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 first 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 Investor Relations:Meghan   The Timken Company CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Dollars in millions, except share data) (Unaudited) Three Months EndedMarch 31, 2024 2023 Net sales $ 1,190.3 $ 1,262.8 Cost of products sold 792.7 846.0 Selling, general & administrative expenses 190.7 186.8 Amortization of intangible assets 20.0 13.5 Impairment and restructuring charges 2.3 28.9 Operating Income 184.6 187.6 Non-service pension and other postretirement (expense) income (1.0) 0.1 Other (expense) income, net (0.9) 3.1 Interest expense, net (29.4) (22.6) Income Before Income Taxes 153.3 168.2 Provision for income taxes 42.7 42.5 Net Income 110.6 125.7 Less: Net income attributable to noncontrolling interest 7.1 3.4 Net Income Attributable to The Timken Company $ 103.5 $ 122.3 Net Income per Common Share Attributable to The Timken Company Common Shareholders     Basic Earnings per share $ 1.47 $ 1.69     Diluted Earnings per share $ 1.46 $ 1.67 Average Shares Outstanding 70,266,660 72,499,928 Average Shares Outstanding - assuming dilution 70,880,015 73,360,854   BUSINESS SEGMENTS (Unaudited) Three Months EndedMarch 31, (Dollars in millions) 2024 2023 Engineered Bearings Net sales $ 802.5 $ 900.7 Earnings before interest, taxes, depreciation and amortization (EBITDA) (1) $ 178.7 $ 205.0 EBITDA Margin (1) 22.3 % 22.8 % Industrial Motion Net sales $ 387.8 $ 362.1 Earnings before interest, taxes, depreciation and amortization (EBITDA) (1) $ 77.3 $ 48.2 EBITDA Margin (1) 19.9 % 13.3 % Unallocated corporate expense $ (18.0) $ (17.7) Corporate pension and other postretirement benefit related income(2) — 0.9 Consolidated Net sales $ 1,190.3 $ 1,262.8 Earnings before interest, taxes, depreciation and amortization (EBITDA) (1) $ 238.0 $ 236.4 EBITDA Margin (1) 20.0 % 18.7 % (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 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.   CONDENSED CONSOLIDATED BALANCE SHEETS (Dollars in millions) (Unaudited) March 31,2024 December 31,2023 ASSETS Cash and cash equivalents $ 421.9 $ 418.9 Restricted cash 0.4 0.4 Accounts receivable, net 770.4 671.7 Unbilled receivables 134.8 144.5 Inventories, net 1,231.2 1,229.1 Other current assets 141.9 170.3 Total Current Assets 2,700.6 2,634.9 Property, plant and equipment, net 1,299.0 1,311.9 Operating lease assets 122.8 119.7 Goodwill and other intangible assets 2,343.0 2,401.0 Other assets 78.6 74.2 Total Assets $ 6,544.0 $ 6,541.7 LIABILITIES Accounts payable $ 373.0 $