Bearings maker Timken announced Monday that it has agreed with American Industrial Partners to acquire the Carlstar Belts Business, a North American manufacturer of belts used in industrial, commercial and consumer applications under brands including Carlisle, Ultimax, and Panther, among others. For the 12 months ending June 30, 2015, Carlstar Belts sales were approximately $140 million.
"Acquiring the Carlstar Belts business expands our offering in existing and complementary end markets and broadens our ability to bring customers a diverse package of premium mechanical power transmission products and services," said Richard Kyle, Timken president and CEO. "We're gaining a well-respected business with great talent and leadership, strong manufacturing capabilities, an expanding industrial product offering and excellent customer base."
Kyle noted Carlstar Belts brings an important new product category into the Timken portfolio, which continues to have bearings at its core. The company has diversified its portfolio beyond bearings in recent years, adding gearboxes, chain, couplings, lubrication systems and a variety of industrial services, which are marketed under well-known industrial brands including Philadelphia Gear®, Drives® and InterlubeTM.
The transaction is expected to close in the third quarter of 2015.
Timken also reported its 2015 second quarter financial earnings this past Thursday, led by total sales of $728 million – an 8 percent year-over-year decrease. Excluding currency headwinds, sales were down 3 percent, of which Timken attributes to market-related declines in Mobile Industries.
North Canton, OH-based Timken reported a Q2 profit of $36.7 million, down 35 percent from last year. The company attributes the decline to the impact of negative currency and unfavorable volume.
"The quarter came in near our expectations with demand up slightly compared with the first quarter," Timken President and CEO Richard G. Kyle said. "During the quarter, demand remained weak in many of our markets."
Timken's Mobile Industries segment had Q2 sales of $388.6 million, down approximately 13 percent from last year, with 5 percent attributable to currency. The company said the remainder of the decline was largely due to declines in aerospace, agriculture, and automotive.
The company's Process Industries segment had Q2 sales of $339.4 million, down 1 percent from last year. The company said excluding currency impact of about 5 percent, sales were up almost 4 percent, driven by organic growth in the wind energy and military marine sectors, higher industrial services revenue, and the benefit of acquisitions. The growth was offset by lower industrial distribution demand driven by weakness in metals, mining, and oil and gas.
Timken also reported its earnings for the first six months of 2015, with sales of $1.49 billion a 4.9 percent decrease from last year. The company had a net loss of $98.5 million, compared with a profit of $146.2 million during the first six months of 2014.
"As a result, we are reducing our outlook for the balance of the year, now expecting our top line to be slightly off from the first half," Kyle said. "We are working to accelerate the impact of our cost-reduction initiatives, and expect to generate second-half earnings comparable to the first half. We're committed to drive shareholder value and remain focused on executing our strategy and growing our business."
Timken said it expects full year 2015 revenue to be down 7 to 8 percent from 2014, including 5 percent from currency headwinds. It expects Mobile Industries sales to be down 8 to 9 percent, and down 3 to 4 percent excluding currency impacts. Process Industries sales are expected to be down 6 to 7 percent, and down 1 to 2 percent excluding currency impacts
