Company Performance - Timken reported quarterly earnings of $1.42 per share, exceeding the Zacks Consensus Estimate of $1.34 per share, but down from $1.63 per share a year ago, representing an earnings surprise of +5.97% [1] - The company posted revenues of $1.17 billion for the quarter ended June 2025, surpassing the Zacks Consensus Estimate by 1.72%, although this is a slight decrease from year-ago revenues of $1.18 billion [2] - Over the last four quarters, Timken has surpassed consensus EPS estimates two times and topped consensus revenue estimates four times [2] Stock Outlook - Timken shares have increased approximately 13.5% since the beginning of the year, outperforming the S&P 500's gain of 8.3% [3] - The company's earnings outlook, including current consensus earnings expectations for upcoming quarters, will be crucial for assessing future stock performance [4] - The current consensus EPS estimate for the coming quarter is $1.33 on revenues of $1.12 billion, and for the current fiscal year, it is $5.36 on revenues of $4.5 billion [7] Industry Context - The Electronics - Miscellaneous Products industry, to which Timken belongs, is currently in the top 33% of over 250 Zacks industries, indicating a favorable outlook [8] - Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can impact Timken's stock performance [5][6]

Financial Performance - Timken reported second-quarter 2025 net sales of $1.17 billion, a decrease of 0.8% compared to $1.18 billion in the same period last year[2]. - Net income for the quarter was $78.5 million, or $1.12 per diluted share, down from $96.2 million, or $1.36 per diluted share, in Q2 2024[3]. - Adjusted EBITDA margin decreased to 17.7% from 19.5% year-over-year, with adjusted EBITDA of $208.2 million compared to $230.2 million in Q2 2024[4]. - Organic sales declined by 2.5% compared to the second quarter of 2024, driven by lower end-market demand[2]. - Engineered Bearings sales were $777.4 million, down 0.8% year-over-year, while Industrial Motion sales were $396.0 million, a decrease of 0.7%[7][9]. - Consolidated net sales for the first half of 2025 were $2,313.7 million, a decrease from $2,372.6 million in the same period of 2024, with an adjusted EBITDA margin of 18.0% compared to 20.1% last year[21]. - Net income for Q2 2025 was $85.7 million, a decrease of 16.3% compared to $102.0 million in Q2 2024[24]. - Consolidated EBITDA for Q2 2025 was $200.4 million, representing a margin of 17.1% of net sales, down from 18.7% in Q2 2024[29]. - Adjusted net income attributable to The Timken Company for Q2 2025 was $99.3 million, with adjusted diluted EPS of $1.42, compared to $115.2 million and $1.63 in Q2 2024[26]. - The company reported a net income of $339.8 million for the twelve months ended June 30, 2025, down from $375.3 million in the previous year[36]. Cash Flow and Dividends - The company generated $111.3 million in net cash from operations and $78.2 million in free cash flow during the quarter[5]. - Timken increased its quarterly dividend by 3% and returned $47.0 million to shareholders through dividends and share repurchases[5]. - Cash provided by operating activities for the first half of 2025 was $169.9 million, slightly down from $173.9 million in the same period of 2024[24]. - The company paid $24.4 million in cash dividends to shareholders in Q2 2025, compared to $23.9 million in Q2 2024[24]. - Free cash flow for the six months ended June 30, 2025, was $101.6 million, an increase of 9.9% compared to $92.5 million in the same period of 2024[33]. - The company reported a net cash increase of $44.3 million in Q2 2025, with cash, cash equivalents, and restricted cash at the end of the period totaling $420.8 million[24]. Guidance and Outlook - The full-year 2025 EPS guidance was updated to a range of $3.90 to $4.20, with adjusted EPS expected to be between $5.10 and $5.40[11]. - The company anticipates a cautious outlook for the second half of 2025, projecting total revenue to decline between 2.0% and 0.5% compared to 2024[11]. - Timken is optimistic about 2026 and is positioning the business for potential industrial market expansion[12]. - Forecasted full year adjusted diluted earnings per share for 2025 is projected to be between $5.10 and $5.40, reflecting the company's expectations for core business performance[40]. Assets and Liabilities - Total current assets increased to $2,719.7 million as of June 30, 2025, up from $2,516.9 million at the end of 2024[23]. - Total assets reached $6,813.9 million as of June 30, 2025, compared to $6,411.0 million at the end of 2024[23]. - Total liabilities increased to $3,541.1 million as of June 30, 2025, compared to $3,426.9 million at the end of 2024[23]. - Long-term debt stood at $2,139.6 million as of June 30, 2025, up from $2,049.7 million at the end of 2024[23]. - Total debt increased to $2,198.3 million as of June 30, 2025, compared to $2,062.7 million on December 31, 2024, reflecting a rise in short-term debt[31]. Operational Efficiency - The company plans to focus on improving operational efficiency and exploring strategic acquisitions to enhance market presence[22]. - The ratio of net debt to adjusted EBITDA is considered an important measure of the company's financial position, reflecting its ability to cover net debt obligations[30]. - The ratio of net debt to capital improved to 35.2% as of June 30, 2025, compared to 36.1% on December 31, 2024[31]. - The ratio of net debt to adjusted EBITDA increased to 2.3 as of June 30, 2025, compared to 2.0 for the previous year[31]. - The company experienced a $29.5 million decline in net sales when excluding the impact of acquisitions and currency, representing a 2.5% decrease[38].

Core Insights - The Timken Company reported second-quarter 2025 net sales of $1.17 billion, a decrease of 0.8% compared to the same period in 2024, primarily due to lower end-market demand, although partially offset by revenue from the CGI acquisition and favorable pricing [1][12] - The company's net income for the quarter was $78.5 million, or $1.12 per diluted share, down from $96.2 million, or $1.36 per diluted share, in the same quarter last year [2][12] - Adjusted EBITDA for the quarter was $208.2 million, representing 17.7% of sales, compared to $230.2 million, or 19.5% of sales, in the prior year [3][12] Financial Performance - Net income margin decreased to 6.7% from 8.1% year-over-year, while adjusted EPS fell to $1.42 from $1.63, reflecting a 12.9% decline [2][3] - The company generated $111.3 million in net cash from operations and reported free cash flow of $78.2 million [4][12] - Timken returned $47.0 million to shareholders through dividends and share repurchases during the quarter, with a 3% increase in quarterly dividends [4][12] Segment Performance - Engineered Bearings segment sales were $777.4 million, down 0.8% year-over-year, with higher renewable energy demand offset by lower demand in other sectors [5][12] - Industrial Motion segment sales decreased by 0.7% to $396.0 million, with lower demand across most platforms despite contributions from the CGI acquisition [7][12] - Adjusted EBITDA margins for Engineered Bearings and Industrial Motion were 19.7% and 18.3%, respectively, both showing declines from the previous year [6][8] Outlook - The company has revised its full-year 2025 earnings per diluted share forecast to a range of $3.90 to $4.20, with adjusted earnings per diluted share expected to be between $5.10 and $5.40 [9][12] - Timken anticipates a challenging operating environment in the second half of 2025, driven by trade situations and macroeconomic factors [10][12] - Despite current challenges, the company expresses optimism for 2026, planning to position itself for potential industrial market expansion [10][12]

Company Overview - The Timken Company is a global technology leader in engineered bearings and industrial motion, with a focus on designing next-generation products for diverse industries [3] - The company has been operational for over 125 years, leveraging specialized expertise to innovate and create customer-centric solutions that enhance reliability and efficiency [3] - In 2024, Timken reported sales of $4.6 billion and employs approximately 19,000 people across 45 countries [3] Upcoming Financial Results - Timken will release its 2025 second-quarter financial results on July 30, 2025, prior to the opening of the New York Stock Exchange [1] - A conference call will be held on the same day at 11:00 a.m. Eastern Time to discuss the financial performance with investors and securities analysts [2] - Conference call materials and financial results will be accessible online at the company's investor relations website [1][2]

Company Leadership Change - The Timken Company has appointed Timothy A. Graham as president of Industrial Motion, effective immediately, succeeding Christopher A. Coughlin who is retiring [1][2] - Graham has been with Timken since 2003 and has extensive experience in leading global operations, including his recent role as vice president of operations for Engineered Bearings [2] Strategic Vision - Graham expressed his commitment to driving innovation and delivering exceptional value for customers, aiming to strengthen Timken's position in the Industrial Motion sector [3] - The CEO, Richard G. Kyle, highlighted Graham's operational expertise and global experience as key factors for scaling and accelerating profitable growth in the Industrial Motion business [2] Company Overview - The Timken Company is a global technology leader in engineered bearings and industrial motion, with $4.6 billion in sales in 2024 and approximately 19,000 employees across 45 countries [4]

Company Overview - The Timken Company is a global technology leader in engineered bearings and industrial motion, with a focus on designing next-generation products for diverse industries [2] - The company has over 125 years of experience in innovation and creating customer-centric solutions that enhance reliability and efficiency [2] - In 2024, Timken reported sales of $4.6 billion and employs approximately 19,000 people across 45 countries [2] Upcoming Events - Timken will participate in the KeyBanc Industrials & Basic Materials Conference on May 28, 2025, in Boston, Massachusetts [1] - Philip D. Fracassa, executive vice president and chief financial officer, and Neil Frohnapple, vice president of investor relations, will represent the company at the conference [1] - Materials shared during the conference will be accessible online at the company's investor relations website [1]

Company Overview and Performance - The Timken Company was founded in 1899 and has been NYSE listed since 1922[9] - In 2024, the company reported revenue of $4.6 billion, adjusted EBITDA of $845 million, and adjusted EPS of $5.79[9] - The adjusted EBITDA margin for 2024 was 18.5%, and free cash flow was $306 million[9] - The company's dividend yield as of December 31, 2024, was 1.9%[9] - In Q1 2025, net sales were $1.14 billion, a decrease of 4.2% compared to Q1 2024[64, 65] - Adjusted EBITDA for Q1 2025 was $208 million, with a margin of 18.2%, down 250 bps from Q1 2024[64, 66] - Adjusted EPS for Q1 2025 was $1.40 per diluted share[64, 67] Business Segments and Strategy - The company operates through two segments: Engineered Bearings (66% of sales) and Industrial Motion (34% of sales)[15] - 56% of sales are from the Americas, 24% from Europe, Mid-East, Africa (EMEA), and 20% from Asia-Pacific in 2024[11] - The company targets organic growth of 4-5% CAGR and inorganic growth of 2-3% CAGR, aiming for a total growth CAGR of 6-8%[102] - The company aims for adjusted EPS CAGR of >10% and adjusted EBITDA margins of +200 bps versus the 2017-2021 period[102] Capital Allocation - The company targets capital expenditures of 3.5-4.0% of sales over the cycle[80] - The company has repurchased approximately 31 million shares for $1.55 billion since 2013, reducing basic shares outstanding by approximately 25%[101] - The company's long-term leverage target is 1.5-2.5x net debt-to-adjusted EBITDA[74, 102]

Core Points - The Timken Company has approved a 3 percent increase in its quarterly cash dividend, raising it to 35 cents per share, payable on May 23, 2025 [1] - The company has achieved 12 consecutive years of annual dividend increases, reflecting the board's confidence in its long-term earnings and cash flow growth [2] - Timken has maintained a dividend payment every quarter since its NYSE listing in 1922, marking 412 consecutive quarters of dividends, one of the longest streaks among NYSE-listed companies [2] Company Overview - The Timken Company is a global technology leader in engineered bearings and industrial motion, with a focus on next-generation products for diverse industries [3] - In 2024, Timken reported sales of $4.6 billion and employs approximately 19,000 people across 45 countries [3]

[PART I. FINANCIAL INFORMATION](index=3&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) [Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) This section presents the unaudited consolidated financial statements for The Timken Company for the quarter ended March 31, 2025, including income, comprehensive income, balance sheets, and cash flows, with detailed notes on accounting policies and specific financial items [Consolidated Statements of Income](index=3&type=section&id=Consolidated%20Statements%20of%20Income) For Q1 2025, net sales decreased to $1,140.3 million, resulting in net income attributable to the company of $78.3 million, or $1.11 per diluted share Consolidated Income Statement Highlights (Q1 2025 vs Q1 2024) | Metric | Q1 2025 (in millions) | Q1 2024 (in millions) | Change (%) | | :--- | :--- | :--- | :--- | | Net Sales | $1,140.3 | $1,190.3 | -4.2% | | Operating Income | $144.0 | $184.6 | -22.0% | | Net Income Attributable to The Timken Company | $78.3 | $103.5 | -24.3% | | Diluted Earnings Per Share | $1.11 | $1.46 | -24.0% | [Consolidated Balance Sheets](index=4&type=section&id=Consolidated%20Balance%20Sheets) As of March 31, 2025, total assets increased to $6,570.4 million, with total equity rising to $3,089.0 million, driven by net income and favorable foreign currency translation adjustments Balance Sheet Summary | Metric (in millions) | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Total Current Assets | $2,616.8 | $2,516.9 | | Total Assets | $6,570.4 | $6,411.0 | | Total Current Liabilities | $831.7 | $820.5 | | Long-term Debt | $2,105.4 | $2,049.7 | | Total Equity | $3,089.0 | $2,984.1 | [Consolidated Statements of Cash Flows](index=5&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) Net cash provided by operating activities increased to $58.6 million in Q1 2025, while net cash used in investing and financing activities also increased, resulting in a slight overall increase in cash and cash equivalents Cash Flow Summary (Three Months Ended March 31) | Activity (in millions) | 2025 | 2024 | | :--- | :--- | :--- | | Net Cash Provided by Operating Activities | $58.6 | $49.3 | | Net Cash Used in Investing Activities | $(32.5) | $(24.5) | | Net Cash Used in Financing Activities | $(30.6) | $(15.0) | | Effect of exchange rate changes on cash | $7.4 | $(6.8) | | **Increase in Cash, Cash Equivalents and Restricted Cash** | **$2.9** | **$3.0** | [Notes to the Consolidated Financial Statements](index=6&type=section&id=Notes%20to%20the%20Consolidated%20Financial%20Statements) The notes provide detailed disclosures on accounting policies, revenue recognition, segment performance, income taxes, debt, and contingencies, highlighting revenue disaggregation, segment adjusted EBITDA, a lower effective tax rate, and restructuring charges - Revenue is disaggregated by segment, geography, and sales channel, with Engineered Bearings contributing **$760.7 million** and Industrial Motion **$379.6 million** to net sales in Q1 2025[17](index=17&type=chunk) - The effective tax rate for Q1 2025 was **22.7%**, lower than 27.9% in Q1 2024, primarily due to favorable discrete items related to the expiration of statutes of limitation in foreign jurisdictions[26](index=26&type=chunk)[27](index=27&type=chunk) - Total impairment and restructuring charges were **$10.9 million** in Q1 2025, up from $2.3 million in Q1 2024, mainly due to **$9.3 million** in severance for the CEO departure[55](index=55&type=chunk)[56](index=56&type=chunk) - The company had total debt of **$2,127.1 million** as of March 31, 2025, and was in full compliance with all debt covenants[121](index=121&type=chunk)[41](index=41&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=28&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses Q1 2025 financial results, attributing the 4.2% sales decline to lower end-market demand and unfavorable currency rates, detailing segment performance, and outlining a cautious full-year 2025 outlook due to international trade volatility and tariffs [Overview and Outlook](index=28&type=section&id=Overview%20and%20Outlook) Q1 2025 net sales decreased 4.2% to $1,140.3 million, with diluted EPS falling to $1.11, driven by lower demand and unfavorable foreign currency impact, leading to a cautious 2025 outlook anticipating lower revenues and earnings due to international trade volatility and tariffs, despite projected higher operating cash flow Q1 2025 Financial Highlights vs. Q1 2024 | Metric | Q1 2025 | Q1 2024 | % Change | | :--- | :--- | :--- | :--- | | Net Sales | $1,140.3M | $1,190.3M | (4.2%) | | Diluted EPS | $1.11 | $1.46 | (24.0%) | - The 2025 outlook anticipates full-year revenues to be down compared to 2024, primarily due to lower demand from international trade volatility, unfavorable currency rates, and the adverse impact of new import tariffs[93](index=93&type=chunk)[94](index=94&type=chunk) - Despite lower earnings expectations, the company projects higher cash from operating activities in 2025, driven by improved working capital, lower capital expenditures (**3.5% of sales**), and lower cash taxes[95](index=95&type=chunk)[129](index=129&type=chunk) [Results of Operations](index=31&type=section&id=Results%20of%20Operations) Operating income for Q1 2025 fell 22.0% to $144.0 million, with the operating margin decreasing by 290 basis points to 12.6%, primarily due to lower sales volume, higher manufacturing costs, increased impairment and restructuring charges, and a significantly lower effective tax rate - Q1 2025 net sales decreased by **$50.0 million** year-over-year, driven by lower organic revenue (**$37 million**) and unfavorable currency impact (**$25 million**), partially offset by acquisitions (**$12 million**)[97](index=97&type=chunk) - Impairment and restructuring charges increased by **$8.6 million** year-over-year, primarily due to severance related to the CEO transition[97](index=97&type=chunk)[100](index=100&type=chunk) - Net interest expense decreased to **$24.2 million** from $29.4 million year-over-year, mainly due to lower average debt levels[99](index=99&type=chunk) [Business Segments Analysis](index=33&type=section&id=Business%20Segments%20Analysis) Both Engineered Bearings and Industrial Motion segments reported year-over-year declines in Q1 2025, with Engineered Bearings' net sales falling 5.2% and adjusted EBITDA down 12.2%, while Industrial Motion's net sales decreased 2.1% and adjusted EBITDA fell 18.3% Engineered Bearings Segment Performance (Q1 2025 vs Q1 2024) | Metric | Q1 2025 | Q1 2024 | Change | | :--- | :--- | :--- | :--- | | Net Sales | $760.7M | $802.5M | (5.2%) | | Adjusted EBITDA | $159.2M | $181.4M | (12.2%) | | Adjusted EBITDA Margin | 20.9% | 22.6% | (170) bps | Industrial Motion Segment Performance (Q1 2025 vs Q1 2024) | Metric | Q1 2025 | Q1 2024 | Change | | :--- | :--- | :--- | :--- | | Net Sales | $379.6M | $387.8M | (2.1%) | | Adjusted EBITDA | $67.1M | $82.1M | (18.3%) | | Adjusted EBITDA Margin | 17.7% | 21.2% | (350) bps | [Liquidity and Capital Resources](index=35&type=section&id=Liquidity%20and%20Capital%20Resources) The company maintained a strong liquidity position with $376.1 million in cash and $820.0 million available under credit lines as of March 31, 2025, with net debt increasing slightly to $1,751.0 million, while remaining in full compliance with all debt covenants - As of March 31, 2025, total liquidity included **$376.1 million** in cash and cash equivalents and **$820.0 million** available under committed credit lines[123](index=123&type=chunk) Net Debt Position | Metric | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Total Debt | $2,127.1M | $2,062.7M | | Net Debt | $1,751.0M | $1,689.5M | | Ratio of Net Debt to Capital | 36.2% | 36.1% | - The company was in compliance with its debt covenants, with a net leverage ratio of **2.17 to 1.0** (covenant: <3.5) and an interest coverage ratio of **7.70 to 1.0** (covenant: >3.0)[124](index=124&type=chunk) [Non-GAAP Measures](index=40&type=section&id=Non-GAAP%20Measures) This section reconciles non-GAAP financial measures, including adjusted net income, adjusted EPS, adjusted EBITDA, and free cash flow, showing adjusted EPS of $1.40 and free cash flow of $23.4 million for Q1 2025 Reconciliation of GAAP to Non-GAAP EPS (Q1 2025) | Metric | Amount | | :--- | :--- | | Diluted EPS (GAAP) | $1.11 | | Adjustments (net) | $0.29 | | **Adjusted EPS (Non-GAAP)** | **$1.40** | Free Cash Flow (Q1 2025 vs Q1 2024) | Metric (in millions) | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $58.6 | $49.3 | | Capital expenditures | $(35.2) | $(44.1) | | **Free cash flow** | **$23.4** | **$5.2** | - The ratio of Net Debt to trailing twelve months Adjusted EBITDA was **2.2** at March 31, 2025, up slightly from 2.0 at December 31, 2024[146](index=146&type=chunk) [Quantitative and Qualitative Disclosures about Market Risk](index=46&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) There have been no material changes in the company's reported market risk since the disclosures made in its Annual Report on Form 10-K for the year ended December 31, 2024 - There have been no material changes in reported market risk since the company's Annual Report on Form 10-K for the year ended December 31, 2024[152](index=152&type=chunk) [Controls and Procedures](index=46&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that the company's disclosure controls and procedures were effective as of March 31, 2025, with no material changes to internal control over financial reporting during the quarter - The principal executive officer and principal financial officer concluded that the Company's disclosure controls and procedures were effective as of the end of the period covered by this report[153](index=153&type=chunk) - There were no changes in the Company's internal control over financial reporting during the quarter that have materially affected, or are reasonably likely to materially affect, the internal controls[153](index=153&type=chunk) [PART II. OTHER INFORMATION](index=47&type=section&id=PART%20II.%20OTHER%20INFORMATION) [Legal Proceedings](index=47&type=section&id=Item%201.%20Legal%20Proceedings) The company is involved in various legal actions in the ordinary course of business, with management believing that their ultimate disposition as of March 31, 2025, will not have a material adverse effect on the company's financial position or results of operations - In the opinion of management, the ultimate disposition of open legal proceedings as of March 31, 2025 will not have a material adverse effect on the Company's consolidated financial position or annual results of operations[155](index=155&type=chunk) [Risk Factors](index=47&type=section&id=Item%201A.%20Risk%20Factors) There have been no material changes to the risk factors previously disclosed in the company's Annual Report on Form 10-K for the fiscal year ended December 31, 2024 - There have been no material changes to the risk factors included in the Company's Annual Report on Form 10-K for the year ended December 31, 2024[156](index=156&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=47&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) During Q1 2025, the company purchased 411,541 common shares at an average price of $79.17 per share, with 296,061 shares purchased under the publicly announced share repurchase plan, leaving 1,842,929 shares available for purchase under the plan expiring in February 2026 Issuer Purchases of Common Shares (Q1 2025) | Period | Total Shares Purchased | Average Price Paid | Shares Purchased Under Plan | | :--- | :--- | :--- | :--- | | Jan 2025 | — | — | — | | Feb 2025 | 238,210 | $81.87 | 122,730 | | Mar 2025 | 173,331 | $75.47 | 173,331 | | **Total** | **411,541** | **$79.17** | **296,061** | - As of March 31, 2025, the company may still purchase up to **1,842,929 shares** under its share purchase plan, which is effective until February 28, 2026[159](index=159&type=chunk) [Other Information](index=48&type=section&id=Item%205.%20Other%20Information) During the first quarter of 2025, no director or officer of the company adopted or terminated a Rule 10b5-1 trading arrangement or a non-Rule 10b5-1 trading arrangement - No director or officer adopted or terminated a Rule 10b5-1 trading arrangement or non-Rule 10b5-1 trading arrangement during the fiscal quarter ended March 31, 2025[160](index=160&type=chunk) [Exhibits](index=48&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the Form 10-Q, including the CEO separation agreement, various stock unit agreements, and certifications by the CEO and CFO as required by the Sarbanes-Oxley Act - Key exhibits filed include the Separation Agreement with former CEO Tarak B. Mehta, various equity agreements with interim CEO Richard G. Kyle, and Sarbanes-Oxley Section 302 and 906 certifications[162](index=162&type=chunk)

Financial Data and Key Metrics Changes - Overall sales for the first quarter were over $1,100,000,000, with organic revenue down around 3% from last year [5][6] - Adjusted EBITDA margins were 18.2%, and adjusted earnings per share was $1.4, both below prior year levels due to lower volumes and higher manufacturing costs [6][14] - Free cash flow was higher compared to the prior year, ending the quarter with a solid balance sheet [7][26] Business Line Data and Key Metrics Changes - Engineered Bearings sales were $761,000,000, down 5.2% from last year, with organic sales down 2.8% due to lower demand in Europe and The Americas [22][23] - Industrial Motion sales were $380,000,000, down around 2% from last year, with organic sales declining 3.8% [24][25] - The CGI acquisition contributed positively to both revenue and EBITDA across segments [20][25] Market Data and Key Metrics Changes - In Asia Pacific, sales were up 10%, driven by growth in renewable energy demand, particularly in China [15][16] - The Americas saw a decline of about 4%, with most sectors lower, while EMEA was down 11% due to industrial softness in Western Europe [16][17] Company Strategy and Development Direction - The company is focused on delivering profitable growth, operating with excellence, and creating shareholder value through disciplined capital allocation [10][12] - A significant portion of the automotive OE business is under review, with plans to exit certain segments to enhance margins [13][55] - The company aims to offset tariff impacts through pricing adjustments and cost-saving measures, reaffirming a target of $75,000,000 in cost savings for 2025 [9][30] Management's Comments on Operating Environment and Future Outlook - Management expects industrial market conditions to remain challenging throughout the year, with no significant change in demand observed [7][8] - The company is confident in its ability to mitigate tariff impacts and has not seen material pull-forward demand from customers [50][52] - The outlook for renewable energy remains positive, with expectations for mid-single-digit growth in that segment [44][45] Other Important Information - The company is navigating a leadership transition, with a comprehensive search for a new CEO ongoing, but strategic priorities remain unchanged [10][81] - The company is actively monitoring the tariff situation and adjusting pricing strategies accordingly [8][66] Q&A Session Summary Question: Guidance update regarding pricing and volume assumptions - Management indicated that pricing is expected to improve slightly due to tariffs, while volume is anticipated to decline, leading to a 1% organic sales decline [40] Question: Renewable energy trends, particularly in China - Management noted a pleasant surprise in renewable energy demand, expecting mid-single-digit growth for the full year [44] Question: Actions in the automotive OE business - The focus is on light vehicles and OEMs, with plans to exit a significant portion of the automotive OE business to improve margins [55][57] Question: Pricing relative to competitors and supply chain positioning - Management stated that competitors are raising prices, and the company believes its U.S. footprint provides a competitive advantage [63][64] Question: Impact of tariffs on future earnings - Management confirmed that by the end of the year, the tariff impact should be fully offset, leading to a net zero impact in 2026 [77] Question: Manufacturing footprint and facility status - The Fort Scott facility is not fully closed, and improvements are expected in margins as the company progresses towards full closure [89]