Timken(US:TKR)2025-07-30 10:52Financial 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].