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The Timken Company,Canton, OH, reported 2004 sales of $4.5 billion, a 19 percent increase from the prior year. Timken achieved 2004 net income of $135.7 million, up from $36.5 million or $0.44 per diluted share in 2003. Adjusted net income, which excludes the impact of special items, was $122.3 million in 2004, compared to $56.0 million in 2003.
"The strategic actions we have taken to improve our competitiveness enabled us to capitalize on the global industrial recovery and deliver improved performance," said James W. Griffith, president and CEO. "We achieved record sales and strong earnings growth over last year despite unprecedented high raw material costs. The rapid improvement in industrial market demand for our products that buoyed our performance in 2004 is continuing. Our momentum remains strong as we enter 2005, and we will be taking steps to further improve margins, customer service and productivity in the face of these strong markets."
In 2004, the company:
- Leveraged higher volume from the industrial recovery and implemented surcharges and price increases to recover high raw material costs. Including pro forma results for Torrington for the full year of 2003, sales were up 15 percent;
- Continued the successful integration of Torrington, achieving pretax savings of approximately $80 million in 2004, one year ahead of the original target of 2005. The savings resulted from purchasing synergies, workforce consolidation and other integration actions;
- Continued expansion in emerging markets. Completed construction of a joint-venture plant in Suzhou, China - the company's fourth bearing plant in that country. Acquired the remaining interest in a bearing joint venture in Wuxi, China;
- Divested certain non-strategic assets and completed two small acquisitions, enhancing industrial product and service capabilities;
- Ended the year with total debt at $779 million. After deducting cash and cash equivalents, net debt was $728 million, compared to $706 million at the end of 2003. However, net debt to capital of 36.5 percent was lower than the 39.3 percent ratio at the end of 2003 as earnings strengthened the company's equity base.
The 2004 reported income includes the following special items that are excluded from adjusted results:
- $44.4 million of pretax income received under the Continued Dumping and Subsidy Offset Act (CDSOA), which requires that tariffs collected on dumped imports be directed to the industries harmed;
- $6.3 million pretax income related to the sale of real estate and dissolution of operations in Duston, England;