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Canton, OH - The Timken Company today reported sales of $1.3 billion in the second quarter of 2012, a one percent increase over the same period a year ago. The results reflect the favorable impact of acquisitions, pricing and mix, which were mostly offset by weaker demand across broad end-markets, primarily outside North America, currency and lower material surcharges.
Timken generated income in the second quarter of $183.6 million, or $1.86 per diluted share, compared with $121.5 million, or $1.22 per diluted share during the same period a year ago. Included in this quarter's results are two significant items (reference Table 1): income from Continued Dumping and Subsidy Offset Act (CDSOA) receipts in the amount of $69 million, net of tax; and charges related to the announced closure of a bearing production plant in St. Thomas, Ontario, Canada in the amount of $17.7 million, net of tax. The increase in earnings also reflects higher pricing, mix, lower material costs and acquisitions, partially offset by lower sales volume and material surcharges.
"Our second-quarter performance demonstrated the impact of our improved business model and operating capabilities," said James W. Griffith, Timken president and chief executive officer. "As the quarter unfolded, it became clear that the weakening global economy was reducing demand for our products and services. We adjusted our business to the economic realities and are confident Timken is positioned to perform well through the economic cycle."
Among recent developments, the company:
-- Received $109.5 million, pre-tax, in distributions under CDSOA from amounts previously withheld for anti-dumping cases;
-- Announced plans to close its St. Thomas, Ontario, bearing plant and consolidate operations into existing U.S. facilities, which the company anticipates will generate future cost savings;
-- Declared and paid a quarterly cash dividend of $0.23 per share, marking 90 years of paying consecutive quarterly dividends since the company was listed on the NYSE in 1922; and
-- Received the Polk Inventory Efficiency Award which recognized the automotive aftermarket business for improved inventory planning, shipping performance, fill rates and customer satisfaction.
Six Months' Results
Timken posted sales of $2.8 billion in the first half of 2012, up 7 percent from the same period in 2011. The increase primarily reflects the favorable impact of acquisitions, pricing and mix, which were partially offset by lower sales volume and the impact of currency.
In the first half of 2012, the company generated income of $339.3 million, or $3.44 per diluted share. That compares with $234.2 million, or $2.36 per diluted share, earned in the same period last year. Earnings during the first half of 2012 benefited from CDSOA receipts, pricing and mix, and acquisitions, which were partially offset by lower volume, plant closure charges and higher selling and administrative expenses.
Total debt as of June 30, 2012, was $494.2 million, or 17.6 percent of capital. The company had cash of $509.9 million, or $15.7 million in excess of total debt, at the end of the second quarter. This compares with a net debt position of $46.7 million at the end of 2011.
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