THE TIMKEN COMPANY REPORTS HIGHER SALES, EARNINGS FOR 1993'S SECOND QUARTER
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.
SECOND QUARTER RESULTS
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 accounting 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 accounting 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 ASSETS 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 LIABILITIES 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/ (TKR)
CO: The Timken Company ST: Ohio IN: AUT SU: ERN
AR -- CL002 -- 7099 07/29/93 08:10 EDT
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|Date:||Jul 29, 1993|
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