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 CANTON, Ohio, July 29 /PRNewswire/ -- Increased sales volume for steel and bearings in North America, along with continued administrative streamlining and greater manufacturing efficiencies, combined to improve The Timken Company's (NYSE: TKR) financial performance. For the quarter and six months ended June 30, both sales and income before required accounting changes exceeded those of a year ago.
 "These results point to the benefits of our past investments as well as cost reductions," said Joseph F. Toot, Jr., president and chief executive officer. "In our Steel Business, for example, in addition to quality levels that have exceeded our expectations, we are achieving higher yields with lower costs, all of which make us a much stronger competitor.
 "Our work to reduce administrative costs and at the same time improve efficiency and effectiveness is having an impact," said Toot. "The financial savings are important, but additional rewards will be those that come from transforming our company into a leaner, faster and more-effective organization."

 Net sales for the first six months of 1993 increased nearly 3 percent to $863.7 million from 1992's $840.1 million, due to higher steel sales. Worldwide bearing sales, hurt by a still deepening recession in Europe and weak aerospace markets, were slightly below those of last year. Overall, gross profit increased to $186.7 million from $181.3 million in 1992. Income before the cumulative effect of accounting changes increased to $12.7 million from $8.3 million a year earlier. Including the effect of the accounting changes adopted in the first quarter of 1993, the company recorded a net loss of $241.5 million for the first half of 1993.

 Net sales for the second quarter of 1993 increased 5 percent to $441.2 million from $419.2 million in 1992, as growth in North American automotive, heavy truck and industrial markets overcame significant declines in Europe. Gross profit, reflecting higher steel production volumes and cost cutting efforts in both the Steel and Bearing businesses, increased to $99.4 million from $90.5 million in 1992. Net income rose from $3.4 million to $9.6 million.
 "While this improvement is encouraging," said Toot, "we remain concerned about the U.S. economy's ability to gain momentum. Too many areas of industry are still very slow. We remain cautious."
 Ongoing efforts to make structural changes in the company's administrative activities contributed to selling, administrative and general expenses declining from $77.2 million in 1992's second quarter to $70.7 million.
 Steel Business sales increased more than 15 percent over 1992's second quarter. Led by demand from manufacturers of components for the automotive and heavy truck industries, sales increases occurred in all product lines. Shipments of higher-value products to the aerospace markets remain weak. There have been some modest increases in spot market selling prices but not enough to have a material impact on second quarter performance.
 Bearing Business sales approximated those of the year-earlier period, with stronger demand in North America and continuing weak business conditions in
Europe. The sales mix continues to be skewed toward lower-value product. Growth continues in automotive and industrial markets, while railroad and export markets have declined. Aftermarket sales remain flat. Aerospace markets continue to be hurt by reduced defense spending and slow commercial business.
 During the second quarter, the company announced that it was:
 -- Resuming work on its 21st century bearing project, which includes a new plant in Asheboro, N.C.;
 -- Establishing a bearing sales office in Hong Kong;
 -- Setting up a European steel sales unit; and
 -- Developing a manufacturing operation for precision steel components in Eaton, Ohio.
 Latrobe Steel Company, a wholly owned subsidiary, announced it would open a cold finishing facility near Franklin, Pa.
 Also during the quarter, the U.S. International Trade Commission, responding to a case brought by The Timken Company and Republic Engineered Steels, ruled that dumped steel imports from Brazil have not injured the U.S. steel industry. This ruling came after the U.S. Department of Commerce had found large dumping margins on those same imports. The company is reviewing the ruling to evaluate the merits of appealing to the U.S. Court of International Trade.
 The Timken Company (NYSE: TKR) is a leading manufacturer of highly engineered bearings and alloy steels. The company employs some 16,000 people worldwide and recorded 1992 sales of more than $1.6 billion.
 Financial Summary -- The Timken Company and Subsidiaries
 Consolidated Statements of Income
 Second Quarter Ended Six Months Ended
 June 30, June 30,
 (Thousands of dollars 1993 1992 1993 1992
 except share data.)
 Net sales $441,241 $419,181 $863,718 $840,117
 Cost of products sold 341,891 328,676 677,056 658,842
 Gross profit $ 99,350 $ 90,505 $186,662 $181,275
 Selling, administrative and
 general expenses 70,686 77,176 140,417 150,457
 Operating income $ 28,664 $ 13,329 $ 46,245 $ 30,818
 Other income (expense):
 Interest expense $ (7,624) $ (6,675) $(15,709) $(13,598)
 Other income
 (expense) - net: (2,772) (464) (6,040) (2,027)
 Income before
 income taxes
 and cumulative
 effect of
 changes $ 18,268 $ 6,190 $ 24,496 $ 15,193
 Provision for income
 taxes 8,712 2,817 11,758 6,913
 Income before
 cumulative effect of
 changes $ 9,556 $ 3,373 $ 12,738 $ 8,280
 Cumulative effect of
 accounting changes on
 prior years (net of income
 taxes of $132,971) -0- -0- ($254,263) -0-
 Net income (loss) $ 9,556 $ 3,373 ($241,525) $ 8,280
 Income per share
 Income before cumulative
 effect of accounting
 changes $0.31 $0.11 $0.42 $0.28
 Cumulative effect of
 accounting changes -0- -0- ($8.31) -0-
 Net income (loss)
 per share $0.31 $0.11 ($7.89) $0.28
 Average shares
 outstanding 30,655,879 30,128,454 30,607,058 30,037,325
 Consolidated Balance Sheets
 June 30 Dec. 31
 (Thousands of dollars) 1993 1992
 Cash and cash equivalents $ 3,987 $ 7,863
 Accounts receivable 233,355 198,549
 Inventories 307,940 310,947
 Deferred income taxes 48,510 38,658
 Total current assets $ 593,792 $ 556,017
 Property, plant and equipment 1,036,878 1,049,004
 Deferred income taxes 37,031 -0-
 Other assets 130,072 133,429
 Total assets $1,797,773 $1,738,450
 Accounts payable and other liabilities $ 163,217 $ 152,877
 Short-term debt and commercial paper 135,777 147,038
 Accrued expenses 127,742 90,549
 Total current liabilities $ 426,736 $ 390,464
 Long-term debt 173,336 173,477
 Accrued pension cost 103,681 101,300
 Accrued postretirement benefits 364,719 -0-
 Deferred income taxes -0- 88,146
 Total liabilities $1,068,472 $ 753,387
 SHAREHOLDERS' EQUITY $ 729,301 $ 985,063
 Total liabilities and equity $1,797,773 $1,738,450
 -0- 7/29/93
 CONTACT: Keith Price of The Timken Company, 216-471-3825/

CO: The Timken Company ST: Ohio IN: AUT SU: ERN

AR -- CL002 -- 7099 07/29/93 08:10 EDT
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Publication:PR Newswire
Date:Jul 29, 1993

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