Core Insights - The Timken Company reported a strong finish to 2025, with higher organic sales and cash flow in Q4 compared to the previous year [3][4][12] - The company anticipates organic revenue growth, strong cash flow, and improved margins and earnings in 2026 [3][16] Financial Performance - Q4 2025 net sales reached $1.11 billion, a 3.5% increase from Q4 2024, driven by higher pricing and favorable foreign currency translation [2][3] - Net income for Q4 2025 was $62.3 million, or $0.89 per diluted share, down from $71.2 million, or $1.01 per diluted share in Q4 2024 [4][12] - Adjusted EBITDA margin for Q4 2025 was 16.0%, a decrease of 60 basis points from 16.6% in Q4 2024 [2][5] Segment Performance - Engineered Bearings segment sales were $714.2 million, up 0.9% year-over-year, primarily due to higher pricing [7][24] - Industrial Motion segment sales increased by 8.4% to $396.8 million, driven by higher demand and pricing [9][24] Full-Year Results - Total sales for 2025 were $4.58 billion, a modest increase of 0.2% compared to 2024, with organic sales down 1.0% [11][13] - Full-year net income was $288.4 million, or $4.11 per diluted share, compared to $352.7 million, or $4.99 per diluted share in 2024 [13][14] Cash Flow and Shareholder Returns - Net cash from operations for 2025 was $554.3 million, up 16.5% from $475.7 million in 2024 [15] - Free cash flow for the year was $406.1 million, a 32.8% increase from $305.7 million in 2024 [15] - The company returned $155.7 million to shareholders through dividends and share repurchases in 2025 [15] 2026 Outlook - The company projects 2026 diluted EPS in the range of $4.50 to $5.00 and adjusted EPS between $5.50 and $6.00 [12][16] - Revenue growth for 2026 is expected to be between 2% and 4% compared to 2025 [16]

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]