Timken Sales Decline 38% in 2009

By MDM Staff

February 2, 2010

More about: PT/Motion Control/Fluid Power

Excluding results of sold needle roller bearings business, Timken had sales of $3.1 billion in 2009.

The Timken Company (NYSE: TKR), Canton, OH, reported sales of $3.1 billion for 2009, a decrease of 38% from a year ago. The sales comparison, which excludes results of the Needle Roller Bearings business sold in December, reflects weak demand and lower surcharges, partially offset by improved pricing.

We Deliver Distribution News to Your Inbox
Sign up below to receive MDM Update, your free weekly distribution news update by email.

In 2009, the company incurred a full-year loss of $134 million, including a loss of $72.6 million, from the discontinued Needle Roller Bearings business.

Excluding special items, net income in 2009 was $30.7 million.

The change in full-year earnings reflects lower sales volume, surcharges and manufacturing utilization, partially offset by pricing, cost reductions, lower material costs and LIFO income (last-in, first-out inventory accounting).

“The global economic environment made 2009 an extremely challenging year for The Timken Company, which is reflected in the reduction in our sales and earnings,” said James W. Griffith, Timken president and chief executive officer. “However, we responded quickly to the downturn, taking actions that helped generate record free cash flow. We continued shifting our portfolio towards attractive markets, strengthening our balance sheet and improving our operating capabilities. Today we are better positioned to leverage an economic recovery.”

For the fourth quarter ended Dec. 31, 2009, sales were $774.6 million, a decrease of 29% from the same period a year ago. The reduction reflects weaker demand across most of the company’s end markets and lower surcharges, while favorable pricing and currency partially offset the sales decline.

Bearings and Power Transmission
Sales in 2009 for this segment were $2.5 billion, down 26% from the prior year. Sales in the fourth quarter were $613.2 million, down 18% from the prior-year period.

Mobile Industries
Sales in this segment were $1.25 billion in 2009, down 30% from the year before. Fourth-quarter sales were $324.6 million, down from $374.3 million in the same period last year.

Process Industries
Sales in this segment were $808.7 million, down 31% from 2008. Lower demand across most industrial market sectors and currency offset favorable pricing. Sales declines were most prominent in the industrial distribution channel. Sales in the fourth quarter were $189.6 million, a decline of 29% from the prior-year period.

The fourth-quarter decline in sales reflects a broad-based drop in industrial demand, especially in the power-transmission sector and across the industrial distribution channel.

Aerospace and Defense
Sales in this segment were $417.7 million in 2009, up 1% from $412 million a year ago. The increase was driven primarily by pricing and an acquisition, partially offset by reduced demand across commercial and general aviation markets.

Sales in the fourth quarter of 2009 were $98.9 million, versus $109.7 million in the prior-year period.

Steel Group
Sales for the Steel Group, including inter-group sales, were $714.9 million in 2009, a decrease of 61% from $1.85 billion last year, with 50% fewer shipped tons. The greatest market declines were from the industrial and energy sectors. Surcharges declined $555 million from a year ago.

The Steel Group incurred a loss of $57.9 million in 2009. The decline resulted from lower demand and underutilization of manufacturing capacity.

Sales in the fourth quarter, including inter-segment sales, were $173.6 million, a decrease of 53% from the same period a year ago, with approximately 40% fewer shipped tons. Weaker end-market demand in the industrial and energy sectors was partially offset by stronger demand in the light-vehicle sector compared with a year ago due to consumer stimulus programs in the U.S. and continued market strengthening in general.

The Timken Company is a diversified manufacturer of friction management and power transmission products and services with operations in 26 countries.

Market Data for Dozens
of Product Groups

Not a subscriber? Order market analyses by pay-per-view. Also available in the MDM Databank: housing starts, industrial production, wholesale trade revenues, Producer Price Index and much more, posted monthly!

Benchmark Your
Work Force Plans

Now Available: If you missed the recent MDM Webcast on Managing Talent for the Recovery, order the transcript today for just $39.95. Go to the MDM Store.