Financial Data and Key Metrics Changes - Total sales for the quarter were $1.17 billion, down less than 1% from last year, with organic sales down 2.5% due to lower demand in both segments, partially offset by higher pricing [6][15] - Adjusted EBITDA margins were 17.7%, and adjusted EPS was $1.42, both below prior year levels due to lower volumes, higher tariff costs, and unfavorable currency [7][15] - Free cash flow generated was $78 million, with a quarterly dividend raised by 3% and 340,000 shares repurchased [8][27] Business Segment Data and Key Metrics Changes - Engineered Bearings sales were $777 million, down 0.8% from last year, with lower end market demand in Europe and The Americas, offset by higher revenue in Asia [22] - Industrial Motion sales were $396 million, down 0.7%, with organic decline of 5.9% due to lower demand, although linear motion platform saw growth driven by new business wins [23][25] Market Data and Key Metrics Changes - In Asia Pacific, sales were up 2%, led by growth in China, while The Americas saw a decline of 3% and EMEA was down 5% [16][17] - The overall market environment remains stable, but there are signs of softness in industrial sectors, particularly in Europe and North America [9][17] Company Strategy and Development Direction - The company is focused on managing costs and driving structural cost actions to contribute to margin expansion over time, with plans to complete three plant closures in the second half of the year [10][12] - Timken is investing in high-growth applications within the automation sector, including industrial robotics and factory automation, to capitalize on market trends [13][14] Management's Comments on Operating Environment and Future Outlook - Management expressed a cautious outlook for the second half of the year due to trade uncertainties, but remains optimistic about 2026, expecting industrial markets to expand as trade stabilizes [9][11] - The company is confident in its ability to mitigate tariff impacts and anticipates positive contributions from backlog growth and pricing actions [10][12] Other Important Information - The CEO search is ongoing, with strong interest in the role, and the board is confident in identifying a new leader soon [13][14] - The company continues to pursue M&A opportunities, particularly bolt-on acquisitions, even during the CEO transition [78] Q&A Session Summary Question: Can you unpack the trend to the organic volume guide? - Management indicated a cautious approach for the second half due to trade uncertainties, despite stable market conditions [36][38] Question: What are your thoughts on humanoid robots and their potential? - The company is working on applications for humanoid robots, but expects it to be a long-term play with modest revenue growth in the near term [39][41] Question: What were month-by-month orders through Q2? - Orders have been improving, and July sales rates are in line with the midpoint of guidance, indicating a cautious but positive outlook [47][48] Question: Can you provide an update on discussions with auto OEMs? - Discussions are ongoing, with expectations for some margin uplift in 2026, but no immediate impact anticipated [52][53] Question: How are inventory levels affecting distribution? - Inventory levels are currently good, but there is caution due to potential market weakness, particularly in discretionary spending areas [63][66] Question: What is the outlook for wind energy demand? - Demand in wind energy has improved, particularly in Asia, but growth may be muted in the second half due to pull-ahead spending [68][69] Question: Are there any market share issues or pricing competition? - Management stated that they are not losing market share and expect pricing to continue to rise, which will help recover costs [106][109]

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 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]